- FTSE 100 down 54 points at 8140
- Retail sales plunge
- BP shares sent lower after big write-off
4.40pm: FTSE closes down 0.66%
London's blue-chip index has ended the day 54 points lower, down 0.66% to 8139.81.
The FTSE 250 Index finished down 178.5 points, or 0.86%, at 20,619.80.
4.01pm: Market to close lower
The FTSE 100 looks set to close the day in the red, having pared all of its early-day gains and then some.
With the final 30 minutes still to go, the blue-chip index was down 47 points to 8,145, weighed by a 3.5% dip in BP plc’s share price.
Retailers also fumbled following a poor BRC Retail Sales Monitor print, while housebuilding stocks including Barratt Developments PLC (LSE:BDEV) and Persimmon PLC (LSE:PSN) were knocked back down to reality following some post-election hype.
3.50pm: Fund welcomed by some
Some comment on Labour's plans from the British Private Equity & Venture Capital Association, which has calculated that there is £145 billion of ‘dry powder’ capital committed to UK led private capital funds.
"Private capital is going to be vital in getting Britain growing and driving the net zero transition, so this is a very encouraging step which echoes calls the BVCA has long been making," says the body's chief executive Michael Moore.
He adds: "These are welcome first steps in ensuring that more of this is deployed into UK businesses by backing the British Business Bank which has the expertise to invest in the venture and growth capital funds that will grow the innovative businesses of the future.
"A clearer net zero roadmap would help the 12,000 businesses backed by private capital to continue to drive that change."
Others, such as the Thatcherite Institute of Economic Affairs, wish the fund luck but worry it may be a waste of taxpayers’ money.
Professor Len Shackleton, an editorial and research fellow at the IEA, says: "I wish this new initiative well, but the NWF needs to be realistic about what government can do.
"Investment is important, but it needs to be sensible and analysis of potential returns needs to be hardnosed."
He adds: “We need to boost not just the quantity but also the quality of investment. In the past, governments have been far too influenced by fashionable boondoggles — nowadays, anything with ‘green’ in the title should ring warning bells — and have wasted vast amounts of taxpayers’ money.
"Sometimes, pension funds and other private investors who paid too much attention to the government of the day also lost out."
The Prof recalls many past governments being forced to backpedal due to unforeseen events: "When, long ago, a previous Labour administration set up the National Enterprise Board, it was justified as promoting advanced technology in profitable firms. But the wind changed, and with rising unemployment, 95% of government funds went into attempts to revive lame ducks."
3.26pm: Labour announces seven-billion-pound National Wealth Fund
Labour chancellor Rachel Reeves has earmarked £7.3 billion in state funding for a new ‘National Wealth Fund’ targeted at private-sector businesses.
Joining a nine-strong taskforce outside Number 11 in the pouring rain, Reeves stated: “I have previously committed to establishing a National Wealth Fund. I am now going further by bringing together key institutions.
“We need to go further and faster if we are to fix the foundations of our economy to rebuild Britain and make every part of our country better off.
“That is why in less than a week we are establishing a new National Wealth Fund and bringing together the key institutions that will help unlock investment in new and growing industries.”
The taskforce includes a number of high-profile business leaders, including former Bank of England governor Mark Carney, Barclays boss C.S. Venkatakrishnan and Aviva boss Amanda Blanc.
Establishing the fund will require a restructuring of the existing UK Infrastructure Bank and British Business Bank
"Britain is open for business – and the work of change has begun," said Reeves.
Net-zero and infrastructure projects have been flagged as industries of focus.
Energy security and net-zero secretary Ed Miliband said: Our mission to make Britain a clean energy superpower is about investing in Britain.
“Our National Wealth Fund will help create thousands of jobs in the clean energy industries of the future to boost our energy independence and tackle climate change.”
Further details will be set out ahead of the government’s international investment Summit later this year.
2.53pm: Nasdaq off to strong start, Nvidia, Intel, other chipmakers rally
US markets got off to a solid start today, with the Nasdaq 100 tech index surging around 70 points in opening trades.
It brings the index to a fresh all-time high of 20,506.
Microchip stocks led the surge, with Intel Corp (NASDAQ:INTC, ETR:INL), Broadcom, Marvell Technology, Nvidia Corp and ARM Holdings plc all posting low-single-digit gains.
At $131.75 per share, Nvidia is just a few percentage points off its all-time high from less than a month ago.
The Dow Jones Industrial Average, on the other hand, has slipped around 0.3% while the broader S&P 500 is up around 0.2%.
Back in London, the FTSE 100 has failed to benefit from the bullish US open, having dipped nearly 50 points to 8,144.
2pm: Bitcoin in recovery mode, but trading volumes lack spirit
The world’s largest cryptocurrency bitcoin is seeing early signs of recovery after trending lower for the better part of a month.
Yesterday saw bitcoin add 1.5% against the US dollar, with another 1.3% reclaimed today.
It marks one of the strongest two-day steaks in the past 30 days, though still puts the BTC/USD pair in negative territory to the tune of 17% month on month.
Tepid on-exchange trading volumes since the April Halving event have hampered bitcoin bitcoin’s performance.
At the time of writing, bitcoin was swapping for $57,357, a decent 7% recovery from a year-to-date low penned last week.
Back to the stock market, the FTSE 100 has slipped substantially from morning highs. At 8,151, the index is currently 41 points below yesterday’s close.
1.23pm: Nasdaq to hit new record
Futures contracts have the Nasdaq 100 index opening 66 points, or 0.3% higher, when Tuesday trading gets underway.
It will make for a new all-time record for the tech-focused index following a strong performance on Monday.
The Nasdaq notched a record yesterday driven by a cooling jobs report, bolstering expectations of a Federal Reserve rate cut in September.
The Dow Jones Industrial Index and the broader S&P 500 are expected to open 29 points and 10 points respectively.
On the macroeconomic calendar, the market will be looking for hints on forward interest rate policy during Federal Reserve chair Jerome Powell’s testimony.
12.59pm: FTSE 100 dips
The FTSE 100 has retracted from morning highs to currently trade 17 points lower from yesterday’s close.
Despite a good showing from utilities and mining stocks, oil supermajor BP plc’s 3.8% dip is dragging the blue-chip index.
BP’s bearish run follows a not-so-slick second-quarter trading update. Housebuilders and retailers are also in the red.
12.52pm: Extend business rates relief, Loungers boss pleads
Nick Collins, chief executive of hospitality group Loungers PLC (AIM:LGRS), has called on the newly elected Labour government to extend business rates relief.
Under current rules for the 2024/25 tax year, shops, restaurants, bars, pubs, hotels and other hospitality and leisure businesses can get up to 75% off their bills, capped at £110,000.
These reliefs are due to expire at the end of the tax year.
In comments to The Evening Standard, Collins said the hospitality sector “generally pays an unfair proportion of the business rates bill”.
According to Collins, the sector pays 10% of all national business rates “when our revenue represents only 3%”.
Loungers delivered a stellar set of financial results today, with record revenue and profit, marking what Collins called “another year of outstanding strategic, operational and financial progress for Loungers”.
11.55am: PageGroup plunges, though UK showing signs of stabilisation
Shares in mid-cap City recruiter have moved steadily lower as a result of a grim financial outlook.
Its 12% second-quarter earnings nosedive was largely telegraphed in and came as little shock to the market, but the recruiter’s expectations of profits halving by year end caused a stir.
Profits in PageGroup’s UK segment fell over 17% in the quarter, a worse result than the 6.6% dip in the Americas and 10.2% dip in the EMEA region.
But all is not ghastly in the UK, according to AJ Bell’s investment director Russ Mould.
Mould said: “China looks to be a source of additional weakness, but at least the UK is showing a slower rate of decline and it can be argued these figures probably reflect budget decisions taken several months back, given the lengthy lead times involved in headcount changes by employers.
“The picture, therefore, may not be quite so bleak as it seems.”
Comparing previous quarterly figures attests to these green shoots of stabilsation- profits declined between 19% and 20% in the previous three reporting periods, making the second quarter, by some metrics, the best in a year.
Albeit, this was “against a soft base for comparison”, said Mould.
Unfortunately for PageGroup, China “was the one area where the rate of decline in activity accelerated”, offsetting these UK green shoots.
11.20am: Water companies get boost from Thames comments
Water companies are proving a bright spot today after Thames Water’s boss said the prospect that London’s supplier will be nationalised is a “long way off”.
Chris Weston, chief executive, said: “Special administration is something that is not in the interests of any of our stakeholders or the UK taxpayers.
“I can’t put any probability on whether it will or won’t happen, but it is a long way off if it were to happen and there is a lot more that we can do and will do and are focused on doing over the coming months to make sure that that does not happen.”
Water regulator Ofwat announces its initial pricing and investment determination for the sector on Thursday and how much leeway it gives Thames is seen as crucial to its survival.
Other companies, too, will be on tenterhooks over what level of price rises they can push through, but they are in much better financial shape.
Severn Trent was up 2.7% to 2,569p, United Utilities by 1.8% to 1,049p and Pennon by 2.9% to 613.5p.
FTSE 100 up 7 at 8,200p.
10.55am: Wizz Air shrugs off Airbus delivery delays
Wizz Air has warned it expects more delays to deliveries from Airbus, but this won’t affect its expansion plans.
Talking to Reuters, boss Jozsef Varadi said the Hungary-based carrier currently has 45 aircraft grounded inspections due to checks on its Pratt and Whitney engines, but even with this disruption and Airbus delays would still grow its capacity.
The airline is still expecting “continuous deliveries of about three aircraft a month, with 20” growth in capacity next year and 20% to 25% the following year".
Shares in Wizz Air rose by 0.2% to 2,120p while Footsie was up 8 at 8,202.
10.13am: PageGroup’s profits to halve by end of year
City recruiter PageGroup PLC (LSE:PAGE)’s second-quarter earnings print underscored the dour market conditions of Britain’s tight labour market.
Gross profit in the second quarter declined 12% year on year and management warned of “no immediate signs of improvement”.
“As clients' recruitment budgets have tightened, they have become more risk averse which has slowed the recruitment process.
“Although salary levels remain strong, offers made to candidates were not as elevated as they were in 2022 and early 2023.”
PageGroup gave a full-year operating profit forecast of £60 million, which is nearly half of the previous full-year result.
Temporary recruitment performed comparatively better in the second quarter (falling 9.8% against permanent’s 12.8%), “s clients seek more flexible options and permanent candidates remain reluctant to move jobs”.
PageGroup shares were tossed nearly 6% lower following publication of these results.
9.53am: Brits turn to ‘insperiences’ in face of gloomy weather
Retail sales may have been down across the board in June, but Barclays PLC (LSE:BARC)’s monthly Consumer Spend report shows that Brits spent large on so-called ‘insperiences’ instead.
Insperiences (aka at-home experiences) such as streaming and other digital content, takeaways, and fast food deliveries surged 5.3% year on year in June.
On top of avoiding the gloomy weather, spending was encouraged by a strong entertainment roster, including hit TV shows Bridgerton and House of the Dragon, the Euros and Inside Out 2 at the cinemas.
In fact, cinemas enjoyed their busiest day of the year on June 15 thanks to the release of Disney and Pixar's Inside Out 2, noted Barclays.
Karen Johnson, head of retail at Barclays, said: “Once again, our data demonstrates the undeniable impact that unseasonable weather can have on consumer spending.
“The sluggish demand at the start of June even caused some fashion brands to adjust their sales schedules, although I was pleased to see that the situation has since improved with the arrival of sunnier days.
“However, the dreariness didn’t dampen spending across the board, with takeaways, digital content and entertainment all benefitting from people sheltering at home, and hopefully we’ll see sustained interest in The Euros – regardless of England’s fate – and sunnier weather driving people to their local in July.”
9.32am: Vistry’s secret ingredient: Partnerships
Vistry Group PLC (LSE:VTY)’s lucrative partnership model with local authorities “helped it significantly outperform the broader housebuilding market over the first half of 2024”, said Hargreaves Lansdown equity analyst Aarin Chiekrie.
Through this partnership model, Vistry is able to team up with local authorities and housing associations to provide affordable housing.
“These partners foot most of the bill, reducing the group’s risk and freeing up cash to deploy elsewhere in the business,” noted Chiekrie.
Vistry’s focus on affordable housing puts it in good shape to benefit from Labour’s manifesto pledge to deliver 1.5 million new homes over the next five years while reinstating mandatory housebuilding targets.
Analysts had already flagged these pledges (should they materialise into genuine policy) as a boost to housebuilders’ potential. This sentiment was echoed by Chiekrie.
“In her first speech as Chancellor, Rachel Reeves committed to new housebuilding targets and a revamp of the planning rules - the latter of which has hamstrung the housebuilding industry for some time.
“That’s brought some much-needed optimism to the sector and looks to be a tide that lifts all housebuilding ships.”
9.06am: The morning so far
The FTSE 100 moved 18 points higher to 8,212 in the opening hour of Tuesday’s trading session despite a bearish turn from BP plc.
The oil supermajor was slapped more than 3% lower following a trading update that warned of lower gas and low-carbon energy production in the second quarter.
Vistry Group PLC (LSE:VTY) is also in the red, despite chief executive Greg Fitzgerald predicting the biggest boost to affordable housing “in a generation” following Labour’s election victory.
His comments came in the FTSE 100-listed housebuilder’s latest trading update, which showed total completions up 7% year on year to 7,750 units in the first half.
Fellow housebuilders Persimmon PLC (LSE:PSN) and Taylor Wimpey PLC (LSE:TW.) also fell.
Retailers are also down, with JD Sports Fashion PLC (LSE:JD.), Marks & Spencer Group plc, Primark owner Associated British Foods PLC (LSE:ABF) among the biggest morning fallers.
This follows a disappointing BRC Retail Sales Monitor print for June. Poor weather conditions caused a 0.5% plunge in year-on-year retail sales in the month.
B&Q owner Kingfisher plc looks to be a retail outlier though. The stock moved to the top of the FTSE 100 movers list with a 2% gain.
Commodity stocks also recovered after falling yesterday, with Rio Tinto, Fresnillo, Anglo American and Antofagasta posting gains.
In the mid-cap segment, hospitality group Loungers PLC (AIM:LGRS) hailed record revenues and profit this financial year, with the top line smashing £353.5 million, marking a 24.7% increase from the previous year.
It was a year marked by growth for the operator of the Lounge, Cosy Club, and Brightside brands, with 36 new sites opened and 1,200 new jobs created. Shares added 3.5%.
8.47am: Crisis-struck Thames Water has enough cash for 11 months
Thames Water saw a 10% growth revenues to £2.4 billion in the 12 months to 31 March, “reflecting an inflation-linked increase in our charges for water and wastewater services”, the beleaguered London water services supplier said in a trading statement today.
Underlying profit after tax was £140 million following a lossmaking prior year.
Yet its unfamous debt pile continued to climb, having exceeded £15 billion by the end of the period, up from below £14 billion in 2023.
But with liquidity at £1.8 billion, Thames Water said it has enough cash to “sufficiently fund our operations for the next 11 months”.
Thames Water’s debt pile has put it on the brink of a full-blown collapse.
In April, Thames Water told investors it was going to default on £400 million of bonds after missing an interest payment.
Thames Water’s bonds have since plummeted to just 5.8p on the pound.
“The challenges we face are well documented, but our operational and financial performance for the last year show good progress, and these positive results provide the right foundations on which to build and improve,” said chief executive Chris Weston.
The number of pollution incidents rose to 350 in the 2023 financial year (from 331 in the previous year), although the number of “serious” pollution incidents decreased by 18%.
8.25am: Markets flat
Stocks opened flat as a tack this Tuesday, with the blue-chip index unbudged at 8,194.
Commodity-linked stocks inlcuding Fresnillo PLC (LSE:FRES) and Rio Tinto plc have swung higher after falling on Monday, but the FTSE 100 index is weighed down by a 2.5% dip on oil supermajor BP plc and losses on retailers Marks & Spencer Group plc and JD Sports Fashion PLC (LSE:JD.).
8.17am: Vistry anticipates biggest boost to affordable housing ‘in a generation’
Vistry Group PLC (LSE:VTY)’s chief executive Greg Fitzgerald reckons the big-cap housebuilder is in a prime position to support the Labour government’s ambition “of delivering the biggest boost to affordable housing in a generation”.
His comments came in the FTSE 100-quoted housebuilder’s first-half trading update which showed total completions up 7% year on year to 7,750 units in the period.
Keir Starmer’s victorious Labour Party put the housing crisis front and centre of its manifesto pledges.
The party has a target of building 1.5 million new homes over the next five years.
Newly instated chancellor Rachel Reeves also announced on Monday that Labour will reinstate mandatory housebuilding targets scrapped by former prime minister Rishi Sunak.
"We look forward to working with the new Government to address the country's housing crisis and are extremely well placed to support its ambition of delivering the biggest boost to affordable housing in a generation," said Fitzgerald.
Vistry expects to complete over 18,000 units in 2024, up from 16,118 in 2023, with full-year profits projected to surpass last year’s performance.
8.01am: Retail sales plunge, would-be shoppers put off by dodgy weather
Rubbish weather conditions caused a plunge in year-on-year retail sales this June, with the BRC Retail Sales Monitor showing a 0.5% like-for-like decline, reversing the 0.4% rise seen in May.
Sales of weather-sensitive categories such as clothing and footwear, as well as DIY and gardening were hit particularly hard.
“Forgive us for talking about the weather again but it continues to sap consumers’ desire to buy clothes,” said Rob Wood, chief UK economist at Pantheon Macroeconomics.
He added: “Accordingly, the BRC measure of retail sales was dragged down in June by non-food sales dropping 2.9% three-month year-over-year, compared to a 2.4% fall in May.
“Food sales growth also slumped to 1.1% three-month year over year as people declined to fire up the BBQs.”
7.48am: Loungers cheers record revenues
Hospitality group Loungers PLC (AIM:LGRS) enjoyed a round of record revenues and profit this financial year, with the top line smashing £353.5 million, marking a 24.7% increase from the previous year.
Operating profit rose to £20.3 million from £14.8 million, while profit before tax increased to £11.4 million from £7.3 million.
It was a year marked by growth for the operator of the Lounge, Cosy Club, and Brightside brands, with 36 new sites opened and 1,200 new jobs created.
Loungers’ net cash position took a hit from this expansion, with net debt increasing 14% to £160.7 million.
Chief executive Nick Collins said: "This has been another year of outstanding strategic, operational and financial progress for Loungers.
“Record revenue and market-leading like-for-like sales growth coupled with our improving margins are allowing us to generate higher levels of profits to reinvest in our ambitious roll-out programme."
Since year end, Loungers has opened five more Lounges sites and like-for-like sales have been 5% higher than the comparable period in 2023.
7.30am: BP expects lower upstream gas production in second quarter
BP plc reiterated previously announced second-quarter guidance in a trading update this Tuesday.
Avoiding concrete numbers, the oil supermajor said upstream production in the second quarter is expected to be broadly flat sequentially and “slightly lower” in gas and low-carbon energy.
Full-year guidance has upstream production slightly higher than 2023, with gas and low-carbon energy slightly lower.
As previously announced in BP’s first-quarter update, full-year capital expenditure is tipped to hit $16 billion (£12.5 billion).
Prices on Brent in the second quarter averaged $84.97 a barrel compared to $83.16 a barrel in the first quarter.
But gas prices took a hit, averaging $1.89 per one million British thermal units (mmBtu) in the second quarter compared to $2.25/mmBtu in the first quarter.
7.10am: Stocks to recover losses
Futures contracts have the FTSE 100 opening 10 points higher at 8,211 today following a largely uneventful Monday in which the blue-chip index closed the same amount lower.
But with the S&P 500 and Nasdaq 100 both hitting new all-time highs in the US yesterday, traders will be eyeing a feedthrough to the London markets.
Buoyant US stocks were partially down to payroll figures reviving hopes of a September rate cut from the Fed (that’s according to market analyst Chris Beauchamp at IG).
However, disappointing UK retail sales figures released by BRC this morning could weigh on the market.
The data showed retail sales falling 0.5% year on year in June, reversing from a 0.4% rise in May and missing market expectations for a 0.2% gain.
On the company news front, Vistry kicks off the latest housebuilding earnings season while hospitality mid cap Loungers PLC (AIM:LGRS) will soon have its latest earnings out too.