- FTSE 100 climbs 82 points to 8,356
- HSBC revenues and profits beat forecasts
- UK govt hikes incentives for renewable energy
- Bank of Japan hikes rates for second time in 17 years
4.05pm: Solid lead in the final straight
In the final straight of Wednesday's London session, the FTSE 100 is trotting towards the end with a good lead.
The index has gained 77 points or 0.9% with just under half an hour to go, having been as high as 1.5% earlier and notched its highest level since May.
HSBC is second on the Footsie leaderboard after its results and share buyback impressed earlier.
It is surrounded by miners, with copper-focused Antofagasta top of the list, up 4.45%, while Glencore and Anglo American both have risen more than 3%.
Index heavyweights Shell and BP also added a few points, powering higher on a rebound in oil prices amid on heightened tensions in the Middle East.
"China stimulus hopes [are] providing additional impetus," for miners and HSNC, says market analyst Chris Beauchamp at IG.
Gains for the mid-cap FTSE 250 have not been so ebullient, with the more domestically focused index up 126 points or 0.6% to 21,559
This evening, around 7pm, we get the Fed decision, with US afterhours earnings including tech names Meta Platforms, Arm Holdings and Qualcomm.
Tomorrow in the UK, before the 'too close to call' Bank of England decision, we have results from Shell, Barclays, Rolls-Royce, Next and BAE Systems, plus many more.
3.39pm: Next few months offer risks for GBP
ING's James Smith is another economist leaning towards a BoE cut tomorrow, though he stresses it's far from certain.
The decision will hinge on a handful of committee members who felt the June decision was "finely balanced", Smith says, possibly including BoE governor Andrew Bailey, who in his last press conference raised the possibility of cutting rates faster than markets expected at the time.
This "suggests he is keen to get on with the job of cutting rates", says Smith.
After just two MPC members voted for a cut last time, Smith sees three members as reluctant to cut yet, leaving "four or five in the middle, and history suggests they tend to move as a group".
Looking at the possible impact on the pound, the BoE meeting "should therefore present a headwind to the resurgent pound", Smith says.
Risk around the meeting present a "clear downside threat" to his dovish views on the BoE cycle means he and his colleagues "struggle to see GBP/USD above 1.30 later this year".
3.29pm: BoE preview
The Bank of England decision tomorrow is expected to “be very close”, says UBS, predicting a 5-4 vote to deliver the first rate of the cycle.
Current market pricing implies 60% chance of no cut at this meeting.
"The key reason why we expect the MPC to cut rates is the recent data," writes UBS economist Anna Titareva, including inflation of 2% in line with the BoE's target and projections, and July's labour market data showed more pronounced signs of a slowdown in wage growth.
However, the economist acknowledges that the lack of recent communication from the bank's Monetary Policy Committee pushing back against current market pricing, "implies a risk of a later rate cut", ie the meeting on 19 September.
Recent comments by Jonathan Haskel, Catherine Mann and Huw Pill suggest that they will vote for rates on hold, with Megan Greene also likely voting for no change, she adds, while at the other end of the spectrum, Swati Dhingra and Dave Ramsden are likely to continue voting for a cut, leaving Governor Andrew Bailey and Deputy Governors Sarah Breeden and Clare Lombardelli as the swing votes.
3pm: AMD leads Nasdaq gains
Leading Wall Street's gains are the Nasdaq tech giants, with top dog Apple Inc (NASDAQ:AAPL, ETR:APC) up 1.2%, NVIDIA Corp (NASDAQ:NVDA) surging 9%, Tesla almost 4%, Broadcom 7.3% and ASML 7.4%.
Topping the lot, Advanced Micro Devices Inc (NASDAQ:AMD) rocketed 10% higher after the chipmaker's stronger-than-expected earnings yesterday evening.
Kraft Heinz share are up 3% despite the Philadelphia Cream Cheese and Jell-O maker reporting mixed results.
Boeing Co (NYSE:BA, ETR:BCO) has barely moved after announcing that industry veteran Kelly Ortberg will take the helm as CEO next month.
2.41pm: Wall Street opens higher
Stocks in the US have started higher, which has taken a little of the wind out of the FTSE's sails.
The FTSE 100 is up 0.9% now, compared to over 1.5% earlier.
Across the Atlantic, the Nasdaq is setting the pace, up 2.1% in early trades, closely followed by the S&P 500's 1.3% increase.
The Dow Jones is just above flat, while the Russell 2000 is up 0.35%.
2.30pm: UK investors confident about FTSE
More than two thirds of DIY investors believe the FTSE 100 will end the year higher than where we are now, with younger investors more optimistic that their elders.
New research from Charles Stanley (LSE:CAY) Direct, the UK platform owned by Ramond James, found that 71% believe the Footsie will rise in the next six months.
What's more 40% of self-directed investors have increased their exposure to the index in the past months, versus 9% that have reduced it, with the mid-cap FTSE 250 seeing 35% increase exposure and 10% decreasing exposure.
Among Gen Z, ie those aged under 27, this rises to 80%, with 77% of Millennials (those born after 1980).
Even the more cycnial Gen X and Baby Boomers are quite optimistic about the UK benchmark, though , with 64% in both categories expecting a rise in the index for the rest of the year.
Rob Morgan, chief investment analyst at Charles Stanley (LSE:CAY), says comments the confidence follows the all time high the FTSE reached in the spring, "and Britain’s cohort of DIY investors are optimistic that this bull run will continue through to the end of the year".
2.06pm: Nvidia's 'clearest competitor' emerges
One of the big US tech stocks seen leading the gains in New York when trading opens in a few minutes is chipmaker Advanced Micro Devices Inc (NASDAQ:AMD, ETR:AMD).
This (distant) competitor to Nvidia is expected to soar more than 9%, following the Santa Clara-based fabless microchip maker’s stronger-than-expected second-quarter earnings, where adjusted operating income knocked above market forecasts of $1.25 billion to touch $1.26 billion.
AMD ramped up shipments of its AI-focused chip range, with sales of its flagship MI300X cloud-computing accelerators exceeding $1 billion.
Analysts at Wedbush said AMD has emerged as "the clearest contender to Nvidia in supplying AI GPUs/accelerators" and reckon there is "significant appetite for an Nvidia alternative" within the tech industry.
1.39pm: Nasdaq futures spike
US stock futures have climbed higher after wage data from the US Bureau of Labor Statistics.
US wages and salaries increased by 0.9% quarter-on-quarter in the second quarter of 2024, less than the 1.1% rise in the previous period.
Nasdaq futures are now up almost 2%.
The FTSE 100 is holding onto most of its gains, up 1.15%.
1.22pm: Methane leaks from O&G drilling higher than expected
Companies drilling for oil and gas in the US are emitting much more greenhouse gases than regulators believe, new aerial survey research has shown.
There is roughly four times more methane being emitted than estimates published by the Environmental Protection Agency, according to the results of an aerial survey by the Environmental Defense Fund.
Aggregate emissions observed across large portions of 12 major production basins would amount to 7.5 million metric tons per year, around 860 metric tons of methane pollution every hour.
This is "enough wasted gas to meet the annual energy needs of over half of US homes", the fund said.
12.23pm: Inheritance tax options for govt
After inheritance tax jumped to a new record, the new government should generate more cash even if its leaves tax rules unchanged,says Sarah Coles, head of personal finance at Hargreaves Lansdown.
"It owes a great deal to frozen tax thresholds - and this was just in the first year of the freeze.
"The nil rate bands have been held until 2028, so rising asset values and house prices in the interim will mean thousands more pay tax," she says.
"Even if the new government leaves the tax rules unchanged, it’s going to rake in more of this tax, and if it chooses to tinker, taxpayers could end up forking out even more.
"The scale of the money involved won’t dampen speculation that inheritance tax could be considered a soft target for a hike in the October Budget."
The HMRC figures show £15.5 billion was transferred tax-free to spouses and civil partners which Coles says "makes it the largest IHT tax break on the books" but not an obvious candidate for cuts, because it protects the surviving partner from being forced to sell their home to pay an inheritance tax bill.
"Getting rid of this allowance would lead to a major backlash as stories emerged of bereaved older people forced to give up their home at the worst possible time."
"It seems likely that HMRC will increase investigations, which could prove a useful source of extra funds from families accidentally understating the value of the estate. However, this would add yet more misery, uncertainty and delay to the process of probate, which already forces families to put their lives on hold for months," she says.
12.05pm: FTSE holding onto its gains
At midday the FTSE 100 index is up just over 110 points or 1.3% at around 11-week highs, setting the pace in Europe so far today.
As well as HSBC, which impressed with results and a £3 billion share buyback, miners and oil heavyweights are providing a lift.
The FTSE 250 is up 129 points or 0.6%, meanwhile.
US futures are currently also pointing to gains, led by tech stocks.
Nasdaq futures are up 1.6%, those for the S&P 500 are up 1% and for the Dow Jones up 0.3%.
11.34am: Inheritance tax
New statistics from HM Revenue & Customs show inheritance tax liabilities at their highest ever levels.
This was in the 2021-22 tax year, following the previous government’s decision to freeze the tax-free threshold, which led to a liabilities mping £230 million or 4% to £5.99 billion.
Increased asset values also helped, HMRC said, as did the Tory decision to keek the tax-free threshold of £325,000 up to and including 2027-28, rather than increasing it in line with inflation.
It is especially interesting as the new chancellor Rachel Reeves has said she will need to raise some taxes, with an inheritance tax raid one potential tool to help plug some of the £22 billion fiscal black hole in government finances.
11.20am: Phoenix Group commits to invest 5% in private companies
News that two FTSE 100 companies are teaming up as part of former chancellor Jeremry Hunt's Mansion House plan.
Life insurer Phoenix Group Holdings PLC (LSE:PHNX) has agreed to launch a private companies joint venture with asset manager Schroders PLC (LSE:SDR).
Phoenix, which calls itself the 'UK's largest savings and investment group' but has a smaller market cap than Schroders (also Aviva and L&G), said the two firms are forming FGC as "the first private market investment manager to be established in the UK to promote the objectives of the Mansion House Compact".
This was a proposal made by Hunt last summer, calling for the UK’s major pension funds to invest 5% of cash from pension funds into unlisted companies.
Phoenix says it is committing to this 5% commitment, deploying an initial £1 billion and up to £2.5 billion over three years, with an aim to deploy £10-20 billion of investor funds over the next decade.
A key point to note is that FGC intends to invest "to grow the UK’s companies of the future" but will not just invest in British companies.
10.48am: European markets 'unscathed'
"The positive start to trade in European markets has painted stocks within the region in a positive light given the volatility and uncertainty on the other side of the Atlantic," says market analyst Joshua Mahony at Scope Markets.
"In a week that was always going to be loaded full of risk across financial markets, European markets have appeared largely unscathed despite a sharp pullback for US tech giants yesterday.
"Instead, European traders have been able to focus on the positives, with the FTSE 100 rising into a two-month low ahead of a potential rate cut from the Bank of England tomorrow."
Looking ahead, he says the Fed meeting this evening "provides an opportunity for the Fed to inform markets over the pathway for rates, with a September hike currently being deemed as a foregone conclusion by many".
"With inflation still stuck above target, the recent declines have helped push expectations of a dramatic pivot from the Fed in September.
"However, today’s FOMC meeting provides the opportunity for Powell to better align market and Fed expectations."
10.27am: Tech news
As well as Microsoft earnings last night, there are a couple of other big tech stories for this morning.
Shares in chip equipment giant ASML Holding NV (NASDAQ:ASML) jumped 6% on reports that Dutch companies will be exempt from US restrictions on Chinese exports, with Tokyo Electron also surging 7.4% earlier as Japan was another of the other countries mentioned.
The White House is set to expand its existing exclusion rules on foreign products but will exclude more than 30 close allies, reports said, including the Netherlands, Japan and South Korea, according to Reuters reports.
Elsewhere, Amazon.com Inc (NASDAQ:AMZN) has been told by US regulators it is now required to handle the recalls of unsafe products sold on its site.
The US Consumer Product Safety Commission decided that Amazon's current alert system was inadequate in ensuring customers stopped using dangerous items.
10.10am: Euro spikes after CPI comes in hotter
Eurozone flash inflation has come in higher than expected.
The preliminary figure for July showed the headline consumer price index rose 2.6% on a year ago, while expectations were for euro-zone CPI to remain at 2.5% as in June.
Core CPI also was higher than forecast at 2.9%, same as the month before, versus 2.8% expected.
The euro has climbed 0.2% against the pound to 0.8439 and 0.1% versus the US dollar to 1.0825.
10am: Renewable energy incentives hiked
The new government has hiked the budget for the UK’s latest subsidy auction, providing more incentives to try and increase Britain’s clean energy output, after a disappointing result last time.
A record £1.5 billion worth of public funding will be bid for in this 'allocation round', with some £1.1 billion earmarked for offshore wind, up £300 million on last year when no bids were received from such developers.
Energy secretary Ed Miliband labelled the 2023 auction a "catastrophe", after offshore wind developers argued government-guaranteed prices for their energy, known as strike prices, were too low.
The former government subsequently ramped up strike prices for offshore wind, which will sit at £73 per megawatt hour this year, with Miliband adding the maintained higher level "will restore the UK as a global leader for green technologies".
9.58am: Commodities to the rescue
"Commodities came to the rescue," for the FTSE this morning, "helping the UK stock market to buck the sell-off that gripped Wall Street yesterday," says analyst Russ Mould at AJ Bell.
The large rise in the London index is driven by miners and oil companies, including Shell, BP, Glencore, Anglo American and Antofagasta.
HSBC's update, which also includes announcing a new CFO promoted from within, gets a positive reaction, while among the top risers is Diageo bouncing back from yesterday’s disappointing results.
"The common thread with these stocks and the UK market in general is that there is a lot of value on offer," says Mould.
"Valuations aren’t expensive, particularly relative to the US market and the tech titans in the Nasdaq.
"When we get a big sell-off in tech names, investors often rotate to more value-orientated stocks and the UK market is full of them."
9.40am: Ferrexpo surges, Taylor Wimpey mixed
Ferrexpo PLC (LSE:FXPO) shares have shot up 11% after the Ukrainian iron ore producer reported a 75% increase in output and 85% in sales for the first half, with profit after tax more than doubling.
Ferrexpo's operating base is in central Ukraine, where it operates three mines.
“From a corporate perspective, we are adapting to the complexities of a prolonged war,” said executive chair Lucio Genovese.
Shares in Taylor Wimpey PLC climbed over 2% after it reported underlying profits ahead of expectations but made an increased cladding fire safety provision of £88 million.
It said this provision was mostly due to cost inflation on new tenders received and increased project admin costs.
Management has guided to full-year volumes towards the upper end of the previous guidance range of 9,500-10,000 home completions, expects to meet current consensus for operating profit of £416 million and have net cash of around £550 million at year end.
Analysts at UBS calculate this implies around £234 million adjusted operating profit in the second half at a slightly improved margin.
9.04am: Oil prices pick up
Oil prices have been picked up from their two-month lows this morning, with Brent crude futures up 1.7% to $79.40 a barrel.
One likely spark for this is increased geopolitical tension in the Middle East, after the political leader of Hamas was been killed in an Israeli strike in Iran.
Off the back of this, oil giants Shell PLC (LSE:SHEL, NYSE:SHEL) and BP PLC (LSE:BP.) are contributing the the Footsie's progress, now up 107 points or 1.3%.
Gold also climbed to a week's high, hitting $2423 this morning, supported by the increased geopolitical tensions, which included Russia's largest drone attack on Ukraine, plus with today’s Fed meeting in focus.
Analysts at Saxo noted that crude oil reversed some of its near-10% losses in the past month, with the killing of the Hamas leader paired with the API reporting a 4.5 million drop in US crude stocks overnight.
"Despite the mentioned gains during the past 24 hours, the commodity sector is heading for a +4% loss on the month, its worst performance in 14 months driven by China growth concerns forcing long liquidation from speculative accounts across key commodities from energy to industrial metals," they said.
8.53am: London in the lead
The FTSE 100's 1.2% jump, where miners are doing a lot of the heavy lifting, is almost being mirrored by the FTSE 250, which is up 195 points or 0.9% to 21,628.
Both London indices are the top risers in Europe this morning, with the next being the DAX, up 0.7% in Germany, while Italy's FTSE MIB has risen 0.4%, France's CAC 40 is just above flat and Spain's IBEX 35 is down 0.2%.
For the Euro Stoxx 600, the gain is just under 1%, with the big risers including Kenco owner JD Peet, up 17%, software company TeamViewer, and Just Eat Takeaway.
Results from Just Eat Takeaway.com NV included a fresh share buyback programme, after 3% growth in gross transaction value for the first half of 2024.
Elsewhere among UK-listed companies, Wickes Group PLC is up 3.3% despite struggling to retain customers in its bespoke kitchen, bathroom and home office installation offering.
Wicked said there was “continued soft consumer appetite for larger ticket purchases” in the period, coupled with a strong comparative performance in the first half of 2023.
Endeavour Mining PLC (LSE:EDV, TSX:EDV, OTCQX:EDVMF) said it will pay out a minimum of US$435 million in dividends over the next two years and more if special payments and share buybacks are included.
8.36am: GSK ups guidance, but shares lead fallers
More on GSK PLC (LSE:GSK, NYSE:GSK), where shares are down 2.5% now, despite the drug maker raising its annual earnings and sales forecasts after a strong second-quarter performance driven by cancer and HIV treatments.
For 2024, core EPS growth is now guided to grow 10-12%, up from 8-10% before, and its sales growth guidance is lifted to 7-9%, up from 5-7%.
The performance has failed to impress the market, which is still worried about the potential financial whack the drug giant might take from ongoing Zantac litigation.
Analyst Sean Conroy at Shore Capital said second-quarter sales and earnings both also beat consensus expectations for another consecutive quarter.
There were misses among the numbers though, with vaccines missing forecasts by 9% as shingles treatment Shingrix was a 20% miss as sales fell 36% in the US on lower demand and inventory reductions, being partially offset by uptake outside the US which accounted for circa 64% of sales.
HIV, oncology and general medicines all came in ahead of expectations.
Conroy noted that GSK now anticipates slightly higher FX headwinds for the year, "which we believe will likely absorb any upgrades".
8.26am: FTSE hits 2-month high
The Footsie has kept going, now reaching a new two-month high after a jump of 1.2% to almost 8,374.
Topping 8,368 means this is the highest for the London benchmark since mid-May (and a short spike in early June).
Top riser is Antofagasta PLC (LSE:ANTO), which does not have any news out.
It could be up on the back of results from Rio Tinto, up 1% after reporting a 1.8% rise in first half profit. Perhaps more importantly for ANTO, or Fags to some, the Anglo-Aussie miner is subject of rumours that it is eying a takeover in the copper space.
8.12am: FTSE flies higher
The FTSE 100 has flown higher in opening trades on Thursday, adding 78 points or 0.94% higher to 8,352.
This is, however, just back to where it was after a bullish start to the week, which has slowly faded away.
Ashtead, Antofagasta, HSBC and Glencore are the top risers.
HSBC, up 2.9%, is the only one of those with results out today, where second-quarter revenues and profits both beat City forecasts.
GSK is bottom of the fallers, down 1.3%, after besting sale and earnings estimates, but with a miss from its Shingrix shingles drug.
7.59am: Rate hike from Bank of Japan
The Bank of Japan has hiked rates this morning, another step to normalise an ultra-loose monetary policy that has been in place for most of two decades.
Nudging rates up from 0.1% to 0.25%, this was only the second interest rate increase in 17 years.
Officials also announced plans to curb their purchases of Japanese government bonds, aiming to roughly halve purchases by the start of 2026.
"If the outlook for economic activity and prices presented in the July outlook report will be realized, the Bank will accordingly continue to raise the policy interest rate and adjust the degree of monetary accommodation," the bank said in a statement.
Analysts at Deutsche Bank said this was "a clear signal that future hikes were ahead" and noted that following the decision yields on 2yr Japanese government bonds reached their highest level since 2009.
However, the yen is currently little changed since the announcement.
"Before the BoJ announcement, it had already been a challenging day for risk assets, as geopolitical concerns resurfaced in the Middle East, and a renewed decline for tech mega caps weighed on equities," said Deutsche, adding that this was "reinforced by Microsoft’s results after yesterday’s close".
7.39am: HSBC profits better than expected, £3bn buyback unveiled
HSBC Holdings PLC (LSE:HSBA) has declared a second interim dividend and will launch a £3 billion share buyback as it reported a mostly flat performance in the first half of the year.
The dividend of $0.10 per share makes 20 cents for the first six months of 2024, flat on a year ago, with the share buyback expected to be complete within three months.
The Asia-focused bank revealed a first-half profit before tax of $21.6 billion that was down slightly on a year ago, despite a $0.2 billion net favourable revenue impact from certain "strategic transactions" and revenue rising 1% to $37.3 billion,
Second-quarter revenues of $16.5 billion were higher than expected, with quarterly profit before tax of $8.9 billion much higher than the $7.8 billion that analysts had forecast.
Net interest margin decreased to 1.62% from 1.7% on a year ago, reflecting a rise in the funding cost of average interest-bearing liabilities, but was better than the 1.53% consensus forecast.
7.28am: Microsoft beats headline forecasts but cloud and spending cause concern
Microsoft Corporation traded down more than 5% afterhours despite reporting double-digit revenue and earnings growth in what was its fiscal fourth quarter, as investors continue to hold big tech to high standards.
The software developer and cloud computing company increased capital spending 77.6% to $19 billion in the past three months to end-June, mostly on cloud and artificial intelligence, taking its full-yea total to a whopping $55.7 billion.
Growth of the Azure cloud business slowed to 29% from 30.6% in the previous quarter, slightly below forecasts, which Microsoft said was partly because demand for AI outstripped capacity, with “capacity constraints” expected to last into the first half of next year.
Overall, group earnings per share came in at $2.95, which was above the $2.93 that Wall Street expected, on revenue of $64.73 billion that also beat the Street's $64.39 billion consensus.
7.15am: FTSE 100 set to blaze trail
The FTSE 100's ebb and flow is predicted to see a strong rebound on Wednesday ahead of another busy day of results and a bad night for US tech stocks, with the Bank of England meeting tomorrow.
London's blue-chip index is seen bouncing over 55 points, according to futures markets, having dropped close to 18 points the day before to finish at just over 8,274.
Overnight, Wall Street trading was mixed, with the tech-packed Nasdaq tumbling 1.3% lower and the S&P 500 falling 0.5%, but the more concentrated Dow Jones rising 0.5% and the small and mid-caps of the Russell 2000 edging up 0.35%.
Most of the big tech names ended lower, led by a 7% fall for Nvidia and 4% decline for Tesla.
This morning, Asian markets are having a good time, with Hong Kong's Hang Seng surging 2% and Japan's Nikkei up 1.6%.
In the UK, corporate results are out from names such as HSBC, GSK, Endeavour Mining, Metro Bank, Rathbones, Rio Tinto, Shaftesbury and Taylor Wimpey.
After Microsoft last night, Meta is the next of the 'Magnificent 7' tech behemoths to report after today’s close, followed by Apple and Amazon tomorrow.
The US Federal Reserve will issue a policy decision later, with the Bank of England following tomorrow.