- FTSE 100 up 47 points to 8,187
- Nasdaq to rally
- Direct Line looks beyond motor
4.04pm: Stocks well bid in late trades
Blue chips managed to hold onto earlier gains in the final 30 minutes of Wednesday’s trading session, with the FTSE 100 last seen trading 47 points higher at 8,187.
Perhaps catching a bit of pre-Euro semi-final fever, Ladbrokes owner Entain PLC (LSE:ENT) staged a latter-day rally, shooting 3% higher.
The market was also buoyed by bullish airline and utilities stocks as markets drew to a close.
3.51pm: Water company bosses to meet Labour ahead of draft determination
Bosses from Britain’s largest water companies have been called to meet Labour environment secretary Steve Reed ahead of tomorrow’s draft determination.
According to City A.M., Reed will meet the heads of Thames Water, United Utilities and other major water suppliers.
The nature of the talks was not disclosed, but it comes on the eve of tomorrow’s high-stakes regulatory event, when Ofwat will determine water firms’ five-year investment roadmap and planned customer bill increases.
“In the coming weeks and months, this government will outline its first steps to reform the water sector to attract the investment we need to upgrade our infrastructure and restore our rivers, lakes and seas to good health,” City A.M. quoted a Reed spokesperson as stating.
Controversy-plagued water companies have been lambasted for wanting to hike bills while sewage leaks continue to pollute Britain’s rivers and waterways, all the while paying out handsome dividends to shareholders.
But higher bills may also be necessary to fix the creaking infrastructure that is responsible for these leaks.
Southern Water has asked Ofwat to sign off on a 73% bill increase, the largest proposed by all of Britain’s water suppliers.
3.30pm: Entain, Sainsbury’s catch football fever ahead of England and Netherlands face off
Shares in Ladbrokes owner Entain PLC (LSE:ENT) and J Sainsbury PLC (LSE:SBRY) are higher in end-of-day exchanges. Could it be football fever?
Thousands of England supporters will undoubtedly be flocking to the local bookies to put their bets in, before stocking up on supplies at the supermarket before the Three Lions face off against the Netherlands in the Euro semi-finals.
England is hoping to clinch a spot in the final against Spain on Sunday, but the mighty Dutch will make sure Southgate’s squad works for it.
Punters heading to Ladbrokes (not that Proactive encourages betting in any form) largely favour a Dutch victory, by the looks of it.
“The bookies have revealed the damning numbers for England, who have been the subject of just 41.7% of all stakes placed in the match betting up to this point, while the Netherlands lead the way with 44.2% of the backing,” said the betting group.
Alex Apati of Ladbrokes added: "By hook or by crook, Gareth Southgate's men have made it to another major semi-final, although our punters seem to think it'll be the end of the road for Harry Kane and co tonight."
Entain shares were up 3.4% to 662p, while Sainsbury’s was up 2.3% to 260p.
2.37pm: Next upgraded by Citi
Citi has adopted a "more constructive view" on the outlook for Next plc, upgrading its call on the retailer's shares due to an improving economic backdrop and the company's surplus cash.
The American investment bank moved from a ‘sell’ to ‘neutral’ recommendation, stating: "We believe Next is well placed to benefit from a more positive UK consumer environment, with real wages now positive for three quarters and improving consumer confidence.”
Next shares are swapping 1.2% higher at 8,776p in afternoon trades.
The wider FTSE 100 index is trading 35 points higher at 8,174.
2.06pm: Bitcoin rejected following momentary recovery phase
The world’s largest cryptocurrency bitcoin enjoyed a bright trading session on Tuesday, having rallied more than 2% against the US dollar.
Bulls continued to push bitcoin higher post market, but the BTC/USD pair has since been rejected at the $59,500 resistance point.
At the time of writing, bitcoin was trading at $58,200, marking a 2.2% decline from 24-hour highs.
Bitcoin’s star has fallen since smashing all-time highs of more than $73,000 in March this year.
A combination of substantial exchange-traded fund inflows, interest rate optimism and FOMO pushed the benchmark cryptocurrency higher, but the market has since cooled.
Back to the stock market at the FTSE 100 remains 48 points higher from yesterday’s close.
1.32pm: Tesla to push Nasdaq higher
The Nasdaq 100 is tipped to open up to 80 points higher when markets open this Wednesday, supported in no small part by Tesla Inc (NASDAQ:TSLA)’s bullish ongoing performance.
Elon Musk’s electric vehicle giant is up more than 50% month on month, with another 0.3% of gains expected in today’s opening exchanges.
Though Tesla approached 15-month lows in April, positive sentiment has returned to the group, driven by a strong second-quarter delivery report and hype over an upcoming robotaxi event scheduled for 8 August.
Futures contracts for the broader S&P 500 index have it opening 15 points higher this Wednesday.
1.15pm: Blue chips stay bullish
The FTSE 100 remains in high spirits in afternoon trades, with the index adding 50 points to 8,189.
Airline stocks easyJet plc and British Airways owner International Consolidated Airlines Group SA (LSE:IAG) are among the top risers (the latter having won a double upgrade from Morgan Stanley (NYSE:MS)).
1.04pm: Tesco to knock off early to cheer Three Lions (pending victory against the Netherlands)
Tesco Express stores across England will shut shop early this Sunday to cheer on the Three Lions should they reach the Euro Cup final.
“We appreciate just how much this would mean to so many of our colleagues, and we want them to be able to celebrate with their family and friends,” said Tesco’s managing director Kevin Tindall.
To get there, England needs to beat The Netherlands in tonight’s semi-final before taking on Spain this Sunday. Should the Three Lions succeed against the Dutch, Express stores will shutter at 7.30pm before the 8pm kick off.
Spain clinched a spot in the final after beating France 2-1 on Tuesday.
Stores in Wales, Scotland and Northern Ireland will maintain their usual schedules, Tesco said.
12.45pm: Microsoft, Apple off OpenAI board
Both Apple Inc (NASDAQ:AAPL, ETR:APC) and Microsoft Corporation have relinquished their non-voting positions on the board of ChatGPT developer OpenAI.
According to a Bloomberg report, Microsoft told OpenAI that it will withdraw from the board as ”we no longer believe our limited role as an observer is necessary”.
But it also comes at a time of heightened regulatory scrutiny in the European Union and US over the duo’s relationship.
Microsoft has $13 billion invested in OpenAI, leading to antitrust probes over the software giant’s dominant position in the burgeoning artificial intelligence sector.
OpenAI’s microchip supplier Nvidia Corp is facing similar scrutiny,
Apple’s App Store head Phil Schiller was also given a spot on the OpenAI board, but according to an OpenAI statement, that appointment is no longer going ahead.
Schiller was set to join the OpenAI board as an observer following Apple’s announcement of ChatGPT integration into Apple devices.
12.01pm: British Airways owner wins double upgrade from Morgan Stanley (NYSE:MS)
British Airways owner International Consolidated Airlines Group SA (LSE:IAG) has netted a double upgrade from Morgan Stanley (NYSE:MS), with the bank flipping its share price rating from underweight to overweight.
Morgan Stanley (NYSE:MS) analysts highlighted that IAG’s capacity growth “looks increasingly supportive” to pricing in the near and medium term.
While IAG’s attractive valuation is hardly the exception in the underbid airline sector, “the path to earnings upgrades looks clearest”, said the bank.
“Supportive fare data is showing up in advertised fares in North Atlantic, while
advertised data across the rest of the total network is also outperforming,” analysts added.
IAG was the best-performing stock among the FTSE 100 set on Wednesday morning, rallying 3.5% to 179p.
Alongside the double upgrade, IAG was supported by some optimistic spending data from TSB showing a 9.2% surge in airline and travel spending in the first half of 2024.
The rally adds to the bullishness of the wider blue-chip market. At the time of writing, the FTSE 100 was up 53 points to 8,193.
11.31am: Brits face caffeine withdrawals as coffee futures spike
Coffee futures prices continue to surge past multi-year highs, sounding alarm bells for Britain’s caffeine lovers.
The Intercontinental Exchange’s Coffee C Futures contract is the benchmark for Arabica coffee, tracking the physical delivery prices of exchange-grade green beans.
It has soared 57% in the past 12 months, while Robusta futures have more than doubled.
Giuseppe Lavazza, chairman of the namesake Italian coffee company, yesterday warned that bean prices will remain “very high” through to the middle of next year.
“We have never seen such a spike in price as the trend right now,” Lavazza said in comments published in The Financial Times.
Vietnam, an important global coffee bean supplier, has been battling heatwaves that have hurt harvests, while Brazil and Colombia are battling their own adverse weather conditions.
Lavazza warned that UK consumers could see retail prices on a one kilogramme bag of beans soar up to 25% in the coming year.
“We have faced very, very strong headwinds. I don’t see any reason why coffee prices will go down,” he said.
“Climate change has affected the production in the most important robusta countries around the world, mainly Vietnam and Indonesia, reducing quite a lot the quantity available of these kinds of varieties.”
10.57am: Bellway finally clinches Crest Nicholson takeover approval
Bellway PLC (LSE:BWY) has won support from the Crest Nicholson board for an all-share offer of the mid-cap housebuilder at an implied valuation of 273p per share.
Crest Nicholson had previously rejected two takeover proposals forwarded by larger competitor Bellway, but a revised offer at a 28% premium appears to have sealed the deal.
Both companies “believe that there is compelling strategic and financial rationale” for the combination, Crest Nicholson said in recommending the offer to shareholders.
“The revised proposal would bring together the strength of each business with complementary brands to reinforce Bellway's position as a leading UK housebuilder, while enabling Crest Nicholson shareholders to benefit from the scale of the combined business.”
Under the offer, Crest Nicholson’s shareholders will retain 18% of the enlarged group.
Crest Nicholson shares shot up just 2.7% to 248p following the announcement, implying scepticism in the market that a concrete deal will be inked.
10.07am: Travis Perkins (LSE:TPK) jumps 5% amid leadership reshuffle
FTSE 250-listed builders’s merchant Travis Perkins (LSE:TPK) plc was bid 5% higher this morning following the appointment of a new chief executive and chair.
Former Taylor Wimpey PLC (LSE:TW.) boss Pete Redfern will take over as chief executive from 16 September, replacing Nick Roberts, who has held the post for five years.
Meanwhile, Geoff Drabble is coming in as the new non-exec chair from 1 October. He is currently the chair of building materials distribution business Ferguson and packaging large-cap DS Smith.
The appointments form part of a comprehensive restructuring of the senior leadership team following Duncan Cooper taking over as chief financial officer in January.
Trading conditions have been tough for Travis Perkins (LSE:TPK), causing the group to cut its dividend in March.
9.39am: Why are the airlines up?
Airlines are in rally mode today, with British Airways owner International Consolidated Airlines Group plc and budget carrier easyJet plc at the top of the FTSE 100 movers list.
TBS’s latest ‘How Britain Spends’ report is likely to have provided the tailwinds.
According to TSB data, there was a 9.2% increase in spending with airline and travel companies in the first six months of 2024 compared to the same period in 2023.
It shows that Brits are choosing to “spend on rollercoasters and beaches over new clothes or DIY”, said TSB (yesterday’s sluggish BRC Retail Sales Monitor print supported this thesis).
“While many household budgets are under pressure, consumers are remaining optimistic – with many prioritising spend on treats such as holidays and entertainment,” said Delphine Emenyonu, head of loans and credit cards at TSB.
“Consumers are feeling more confident about their finances, and with a potential interest rate cut later in August, we may see increased spending levels in the second half of the year.”
Spending on entertainment items including concert tickets, theme parks and the cinema was up 5.1%, while pub spending increased by 7.2%.
9.09am: The morning so far
The FTSE 100 is trying its best to stage a recovery following a bearish Tuesday trading session.
So far, the blue-chip index has managed to claw back 24 of Tuesday’s 50 points worth of losses, thanks to a good showing from the airlines, utilities and some miners.
British Airways owner International Consolidated Airlines Group plc shot to the top of the FTSE 100 movers list with a 3% rally in the opening hours, with easyJet plc also in the mix.
Endeavour Mining PLC (LSE:EDV, TSX:EDV, OTCQX:EDVMF) was welcomed back to the FTSE 100 with a 1.5% gain, with fellow miner Fresnillo PLC (LSE:FRES) also moving ahead. Glencore, Antofagasta and Rio Tinto, however, were last seen in the red.
Meanwhile, utility stocks including British Gas owner Centrica PLC (LSE:CNA) and northwest water supplier United Utilities plc added 2.4% and 1.2% respectively.
Barratt Developments PLC (LSE:BDEV) dropped a pretty underwhelming trading statement, causing its share price to drop accordingly.
Despite Labour’s heady housebuilding pledges, Barratt disclosed that it would build 1,000 fewer homes in the year ahead. Unsurprisingly, the group topped the FTSE 100 fallers list with a 2.7% flop.
Barratt’s nosedive caused a knock-on effect for Taylor Wimpey PLC (LSE:TW.), which fell around 0.3%.
Elsewhere in company news, Direct Line boss Adam Winslow announced plans to move further beyond the insurer’s core motor offering to deliver an optimistic dividend target of 60% post-tax profit.
There may be some scepticism in the market though; shares fell 0.5% following the announcement.
8.47am: Starbucks operator SSP impresses with third-quarter results
Train station food stalwart SSP Group plc (LSE:SSPG) surged more than 10% today following an upbeat third-quarter trading statement.
SSP, which operates outlets of high-profile food and drink brands including Starbucks and M&S alongside its own brands including Upper Crust, increased group-wide sales by 16% year on year at constant currency rates.
This was due to an increase in demand for leisure travel, according to the group.
In the UK, like-for-like sales were up 8%.
8.23am: FTSE 100 opens higher
The FTSE 100 opened 20 points higher at 8,159 today, with top movers including British Airways owner International Consolidated Airlines Group plc, easyJet plc, Fresnillo PLC (LSE:FRES) and recently returned FTSE 100 member Endeavour Mining PLC (LSE:EDV, TSX:EDV, OTCQX:EDVMF).
8.20am: Barratt to deliver fewer homes in year ahead
Large-cap housebuilder Barratt Developments PLC (LSE:BDEV) is targeting total home completions of between 13,000 and 13,500 in the new financial year.
That is 1,000 homes short of the 14,000 homes completed in the financial year that just ended.
In a full-year trading update, Barratt put the sluggish forecast down to the “profile of land acquisition over the past 24 months”, but added that “the average outlet numbers will grow” into financial 2026.
The forecast comes despite the opportunities presented by the Labour Party’s ambitions to deliver 1.5 million new homes in the following five years.
Management stated that the macroeconomic backdrop “remains challenging”, but signalled optimism of Labour’s pro-build manifesto pledges.
“We welcome the new government's urgency and focus on housebuilding and reform of the planning system as key to both unlocking economic growth and tackling the chronic undersupply of new homes,” Barratt stated.
“We look forward to working with government and wider stakeholders to address supply-side constraints and deliver the new homes, of all tenures, the country needs.”
Barratt shares dipped 2.5% in opening exchanges.
7.58am: Direct Line looks beyond motor to deliver dividends
Four months into his role as chief executive of Direct Line Group plc, Adam Winslow is seeking opportunities outside of the insurance company’s core motor offering.
Direct Line “is about more than just motor”, Winslow said in a press statement prior to this afternoon’s capital markets day presentation, “ and we have ambitious plans to grow in home, rescue and commercial direct”.
"The strategy and targets set out today signal our ambition and intention to grow our business and deliver strong returns for our shareholders," he added.
Regarding those shareholder returns, Direct Line has committed to paying out around 60% of post-tax operating profit for the regular dividend, “with any additional capital returns to be reviewed annually alongside our full-year results”.
Direct Line is also planning changes in its core motor insurance department, most notably by adding its brands to online price comparison websites, which, according to the company, is “the channel where around 90% of customers prefer to shop”.
The insurer said it will stop investing in affinity motor partnerships and other personal line businesses, while reiterating its target of at least £100 million in cost savings by 2025.
7.26am: JD Wetherspoon boss calls on Labour to address booze tax inequality
JD Wetherspoon PLC (LSE:JDW) boss Tim Martin took a swipe at the ousted Tory government’s approach to alcohol taxes in a trading update published this Wednesday.
Martin accused the Tories of failing “to implement tax equality between pubs and supermarkets, leading to pub closures and underinvestment”, while calling for fairer treatment from Labour chancellor Rachel Reeves.
“Wetherspoon hopes that the current chancellor, with a Bank of England pedigree, will understand how many beans make five, and rectify this inequality,” said Martin
He noted that each individual ‘Spoons pub generated taxes “of one sort or another” of £7 million in the last 10 years, “as well as generating considerable employment and social benefits”.
Like-for-like sales increased by 5.8% in the 10 weeks to 7 July, bringing revenues to record levels.
"Sales per pub are approximately 21% higher than pre-pandemic levels, which has helped to compensate for the very substantial increase in costs,” said Martin.
7.10am: Markets seek recovery
Stocks will attempt to recover some of Tuesday’s losses when markets open today.
Futures contracts have the FTSE 100 opening 10 points higher, having closed over 50 points lower yesterday, mainly due to BP plc and retail stocks dragging the market down.
It is another uneventful day on the macroeconomic calendar, making for few catalysts to spur the market into action.
On the company news front, Barratt Developments PLC (LSE:BDEV) is the next housebuilder to report, with all eyes on forward guidance in the wake of Labour’s successful, po-build election campaign.
An update from JD Wetherspoon PLC (LSE:JDW) is also shortly due.