- FTSE 100 up 51 points
- Bharti buys stake in BT
- Oil prices surge
4.03pm: FTSE 100 on course for positive finish
London’s blue-chip index approached late trading in positive territory, as stocks continued to recover after last week’s turbulence.
By the afternoon, the FTSE 100 was up 51 points at 8,219, with BT Group PLC (LSE:BT.A) leading risers after announcing Bharti was set to take a major shareholding in the firm.
IG Group analyst Chris Beauchamp commented Monday had “been a remarkable sea-change compared to last week’s frenetic movements,” which were prompted by fears over the US economy on a poor jobs report earlier in the month.
Oil prices remained on an upward trajectory in the meantime, fuelled by fears over growing tensions in the Middle East.
This comes “as expectations of an Iranian strike on Israel rise once more,” Beauchamp added.
“The risk had appeared to recede last week, or at least had been pushed back, but an attack is on the cards once more.”
3.51pm: China faces record foreign investment outflows
A record amount of foreign investment has been pulled out of the Chinese economy as fears grow over the health of the world’s second-largest economy.
Official data from the country’s State Administration of Foreign Exchange on Monday showed direct investment liabilities in China’s balance of payments fell nearly US$15 billion (£11.8 billion) in the three months to June.
The figure fell by US$5 billion over the first half of the year, with the quarterly drop marking just the second-ever negative reading.
Foreign investment had hit a record US$344 billion in 2021 but has since fallen back, with a full-year outflow not having been seen since at least 1990.
3.36pm: Harland & Wolff shares to remain suspended, shareholders raise bankruptcy fears
Harland & Wolff has confirmed shares will remain suspended as the embattled shipbuilder looks to navigate through growing financial pressures.
The company said on Monday that work on its 2023 accounts had been suspended, with resources being instead being focussed on efforts to “preserve” core operations and decide a “route forward”.
It comes after a group of shareholders holding 30% of the company raised fears that Harland was being lined up for a “pre-pack administration”.
Harland subsequently said it would not comment on “options or interested parties” as a review takes place following several hits to the company.
These included government refusal bailout the company and the loss of a £120 million contract in the Falklands in recent weeks.
3.15pm: Royal Mail parent to offload US freight wing
International Distributions Services PLC (LSE:IDS) is to sell its US freight wing to DC Logistics, the company announced on Monday.
IDS’ parcel delivery firm GLS will sell the division to the California-based firm for an undisclosed fee, with the deal expected to close in early September.
This comes as the Royal Mail owner looks to reset sister company GLS’ focus on its core parcel service after IDS agreed to a £3.57 billion takeover by Czech billionaire Daniel Kretinsky.
“The transaction is consistent with GLS US' strategy to focus on its core parcel offering as the business seeks to reinforce its position as the preferred parcel delivery provider for US customers,” IDS said on Monday.
Shares climbed 0.2% to 338.20p following the news.
2.48pm: US stocks enjoy brighter start to week
US stocks enjoyed a positive start on Monday morning, avoiding a repeat of last week’s sell-off as anticipation built for inflation and retail sales data over the coming days.
The Nasdaq added 60 points to reach 16,805 on Monday’s opening bell, with the Dow Jones climbing 68 points to 39,565 and S&P 500 by 14 to 5,358.
Monday was scheduled to be a quieter day on Wall Street, with early gains coming after fears over the US economy had hit stocks globally early last week.
Attention this week has turned to Wednesday’s consumer price index reading and Thursday’s retail sales data as investors await further updates on how the US economy is faring after the Federal Reserve opted to keep interest rates unchanged late last month.
Among companies, Barrick Gold Corp was among the few big names reporting on Monday, with shares jumping 4.8% on news it had beat expectations over the second quarter on stronger output.
Bank KeyCorp (NYSE:KEY) soared 15.3% in the meantime after announcing a US$2.8 billion investment from The Bank of Nova Scotia in return for a 14.9% stake.
2.20pm: NatWest latest to cut mortgage rates
NatWest Group PLC (LSE:NWG) has joined rivals in cutting some mortgage rates to below 4% after the Bank of England reduced base interest earlier this month.
This follows similar moves at the likes of Banco Santander (LSE:BNC), Lloyds Banking Group PLC (LSE:LLOY)’s Halifax and HSBC Holdings PLC (LSE:HSBA) as competition heats up between lenders.
NatWest will offer 3.89% on a 60% loan-to-value five-year fix from Tuesday following the move, against 4.03% for the same deal previously.
Rates across its other range of mortgage deals are also set to be lowered, with a two-year fixed 60% loan-to-value remortgage being offered at 4.05%.
“The good news just keeps coming on the mortgage front,” PFG Mortgages managing director Tony Castle said... Read more
1.55pm: UK riots cause 10% hit to hospitality sales
Riots and threats of further widespread disorder across England led to a 10% decline in hospitality sales last Wednesday, according to industry figures.
Following riots in recent weeks, rumours of nationwide disorder midway through last week hit sales across the country, trade body UKHospitality reported on Monday.
This was as high as 40% in certain areas, the group said, with some businesses reporting up to a 75% drop in footfall.
The hit was particularly seen in coastal towns and came after the threat of riots saw many people work from home and prompted widespread cancellations of the likes of coach and day trips.
“These figures are startling and shows the enormous impact the riots, and threat of further disorder, have had on our high streets,” UKHospitality boss Kate Nicholls said.
1.41pm: Russian Ruble takes beating on Ukraine incursion
The Russian rouble fell to a three-month low on Monday following news Ukrainian forces had launched their largest move into Russian territory since the war’s start in 2022.
At 90.6 roubles to the dollar, the Russian currency was down 2.2% for the day and by 5% in August so far.
President Volodymyr Zelenskiy confirmed Ukraine’s venture across western parts of Russia’s Kursk region on Saturday, with the surprise attack having begun earlier in the week.
Ukrainian troops are reportedly up to 30 kilometres inside of Russia following the advance, with the subsequent hit to the rouble taking it to its lowest value since May.
1.24pm: OPEC scales back oil demand forecast on China weakness
OPEC has signalled demand for oil will not be as strong as initially thought this year on signs of weakness in China.
The oil cartel’s demand forecast for the year was cut by 135,000 barrels a day in its latest monthly report, to an average of 104.3 million.
This reflects data for the first half of the year, OPEC said, “as well as softening expectations for China’s oil demand growth in 2024”.
OPEC reiterated demand would still increase over the course of the year, with this now expected to equate to 2.1 million barrels a day, against previous expectations for 2.25 million.
The group, which accounts for over 35% of the world’s oil production, is yet to decide on whether to increase production from October, with prices having risen in recent days on fears of growing tensions in the Middle East.
Brent crude climbed 1.1% to US$80.32 a barrel on Monday, while West Texas Intermediate was up 1.2% at US$77.67.
12.32pm: US stocks set for brighter start to the week
US stocks are in line to rise on Monday morning, bringing a welcome sense of calm after a heavy sell-off a week ago.
Futures had the Dow Jones adding 51 points to reach 39,691 ahead of Monday’s opening bell, with the Nasdaq and S&P expected to add 44 and 11 points respectively.
Stocks had taken a beating after worse-than-expected jobs data earlier this month stoked fears that the US economy was heading towards recession.
AJ Bell analyst Russ Mould noted further US economic data later this week could risk disrupting the calmer sentiment which has since returned though.
“Concern about the risks of a recession in the US could be either compounded or somewhat alleviated,” he commented ahead of inflation and retail sales data releases on Wednesday and Thursday respectively.
“The retail number [...] is the primary marker of consumer spending which, in turn, accounts for the majority of overall economic activity.”
Consumer and producer price data beforehand will likely provide clarity over the potential for a Federal Reserve base rate cut next month, with markets currently split over what policymakers will do.
12.10pm: TalkTalk staves off debt default through £400mln deal with lenders - report
TalkTalk is said to have reached a £400 million agreement with lenders aimed at preventing the broadband provider from defaulting on its debts.
According to Sky News, shareholders will immediately inject £65 million into the company, which serves almost four million customers in the UK.
A further injection of £170 million will then be made, with the total refinancing said to be worth £400 million, Sky-quoted sources said.
Lenders and bondholders will extend debt maturities from this November and February to the autumn of 2027 under the agreement, allowing time for TalkTalk to carry out plans for its wholesale and customer networks.
Tristia Clarke is expected to be replaced as chief financial officer by chief financial officer James Smith under the plan, which Sky reported would be confirmed by TalkTalk on Monday.
11.50am: Inflation uptick could disturb market calm - analyst
Inflation likely picked up in July, paving the way for officials to report the first uptick of the year this week, according to analysts.
Following two consecutive months of inflation readings in line with the Bank of England’s 2% target, expectations are for consumer prices to have risen by 2.3% in July... Read more
With the Office for National Statistics set to firm up the figures this Wednesday, AJ Bell analyst Russ Mould said the return of stable trading conditions could be short-lived.
“The current calm may not last long,” he said on Monday, pointing to inflation data in the UK, as well as figures on both prices and retail sales from the US this week.
An increase for July would deal a blow to hopes the Bank of England could cut base interest for a second time later this year, after the first reduction in four years earlier this month.
It would also come after global stock market turbulence last week, caused by fears over the US economy on poor jobs data released earlier in the month.
11.11am: Gas prices at eight-month high, oil set for further rise
Gas prices hit their highest level in eight months after soaring on Monday morning over fears around Russian pipeline supply.
UK natural gas futures climbed by 5.3% to 101.7p per British thermal unit throughout the morning, reaching their highest since early last December.
Tom Roberts, chief executive of data firm Xterna Group noted the rise prompted concern over prices for the upcoming winter.
“The focus seems to be on geopolitics in general at the moment, yet these gas-intensive countries are consuming record levels of gas,” he said.
Though European countries have moved to ditch Russian gas since the start of the Ukraine war in favour of Asian stocks, confirmation that the latter had launched a counteroffensive near the crucial Sudzha intake point has stoked supply fears.
Oil prices also jumped on Monday morning, with Brent and West Texas Intermediate up 1.1% and 1.2% respectively.
“The immediate market concern will be attacks on Iran’s oil supply and infrastructure,” Commonwealth Bank of Australia (ASX:CBA) analyst Vivek Dhar commented.
“We see Brent oil futures trading between US$75 and US$85 a barrel in the short term.”
10.53am: FTSE 100 holds gains but JD Sports slips
JD Sports Fashion PLC (LSE:JD.) fell over 4% after facing a downgrade by Deutsche Bank analysts on Monday morning.
Deutsche Bank lowered the fashion retailer’s rating from ‘hold’ to ‘sell’ and downgraded its share price target from 115p to 110p as it continued to dispute its guidance and free-cash-flow yields.
The broker said its forecasts for the sports clothing group’s earnings are nearly 6.5% lower than the bottom end of guidance… Read more
“Whilst we see potential for positive surprise in gross margin, as promotional intensity eases, subdued overall category spend tampers our enthusiasm,” Deutsche Bank said.
Shares slipped 4.2% on the downgrade, placing JD as the FTSE 100’s biggest faller ahead of Sports Direct owner and peer Frasers Group PLC (LSE:FRAS).
BT Group PLC (LSE:BT.A) remained the biggest climber on the index, up 6.7%, after announcing India’s Bharti was to become one of its major shareholders.
Overall, the FTSE 100 ticked up 30 points to 8,198.
10.39am: Heathrow slams government charge for costing passengers
Heathrow has claimed a £10 charge on those from certain countries has cost it 90,000 passengers since being introduced.
The electronic travel authorisation (ETA) system has hit competitiveness since being introduced last year, the UK’s largest airport argued on Monday.
This sees connecting passengers without UK residents or a visa charged £10 to pass through British airports and was introduced by the former government in November.
“This is devastating for our hub competitiveness. We urge government to review the inclusion of airside transit passengers,” Heathrow said in a statement.
Those from Qatar, Bahrain, Kuwait, Oman, the United Arab Emirates, Saudi Arabia and Jordan are all required to pay the charge currently, with this set to expand to other nationalities in autumn.
9.50am: Burger King returns to profit as expansion pays off
Burger King has revealed it returned to profit in the UK last year aided by a string of new restaurant openings.
Operating profit came in at £13.4 million for 2023, the fast food chain reported on Monday, against a £20.7 million loss a year earlier.
This came as 18 new restaurants were opened across the UK, with a further 10 being remodelled.
Revenue ticked up 30% to £381.8 million over the year, while sales climbed 3% on a like-for-like basis.
Chief executive Alasdair Murdoch noted the improvements reflected the “strength” of the Burger King brand, alongside ongoing demand for its “affordable food offering”.
Burger King added trading over the first half of 2024 had been “resilient” as sales ticked up 5%.
“[This was] split equally between the existing estate and contribution from new site openings,” Murdoch said, and “was also supported by a significant improvement in profitability from a strong operational cost focus”.
9.32am: BoE official warns work not done on inflation as rate expected to rise
Britain's efforts to put a cap on inflation are far from over, a Bank of England official has warned, as official data this week is expected to show prices rising faster once again.
External Monetary Policy Committee member Catherine Mann said Monday that the UK must not be “seduced” into thinking inflation had been contained.
This comes after inflation remained in line with the Bank of England’s 2% target over the past two months.
Mann highlighted surveys implying companies were set to hike wages and prices over the coming year, adding “I’m looking at a problem for next year”.
She told the Financial Times: “Some people at the bottom got quite a bit of an increase [in pay], rightfully so, but the ones above them didn’t. Which means next year they will.”
The Office for National Statistics is set to update on inflation over the course of July later this week.
Economists are expecting consumer prices to have risen by 2.3% during the year to July, which would mean inflation had started to build pace once again.
9.15am: Sainsbury’s calls for business rate reform
J Sainsbury PLC (LSE:SBRY) has called on Britain's new Labour government to “deliver on its promise” to reform business rates.
Calls came alongside the Union of Shop, Distributive and Allied Workers (USDAW), with the duo warning failure to act could result in 17,300 retail store closures over the next decade.
The follows research conducted by Development Economics highlighting the impact of rising business rates on the retail sector.
Citing the research, Sainsbury’s said the removal of the freeze on the business rates multiplier could cost businesses £1.6 billion in the first year, with more than a quarter of this burden falling on the retail sector… Read more
9.09am: Marshalls dips after unveiling lower sales
FTSE 250-listed Marshalls PLC (LSE:MSLH) dipped after making up one of the few companies to report on Monday morning.
Subdued trading across the housing repair and maintenance markets hit trading over the first six months of the year, Marshalls said, leading to lower profit and sales.
Revenues dropped more than 13% to £306 million, with adjusted profits down by 20% at £26.6 million led by a near halving in the landscape arm… Read more
Shares fell 1.5% to 335p on the news.
8.59am: BT soars on Bharti buy-in
BT Group PLC (LSE:BT.A) notched up a 6.6% gain on Monday morning after news broke that India’s Bharti Group would take a 24.5% stake in the company.
The FTSE 100-listed telecoms firm led risers on the index as a result.
Overall, the index climbed 45 points to 8,213, with Entain PLC (LSE:ENT) and Marks and Spencer Group PLC (LSE:MKS) also among risers.
Stocks were green across Europe too as calm appeared to be restored after a week of turbulent trading over fears on the US economy.
The Paris Cac 40 index was up 0.2% early on, while Frankfurt’s Dax gained 0.4%.
“The weekly market movement chart will show virtually no change when viewed through the lens of history, but will mask the turmoil which set investors on edge,” interactive investor analyst Richard Hunter commented.
8.41am: FTSE 100 boss pay hits record
Bosses at Britain’s largest listed companies received the highest average pay packets on record last year, data revealed on Monday.
According to the High Pay Centre, median pay for FTSE 100 chief executives climbed by 2.2% to £4.19 million in 2023.
This was the highest level on record, the group said, with bosses receiving over 100 times the average full-time worker’s salary in the UK.
AstraZeneca PLC (LSE:AZN)’s Pascal Soriot received the highest payout, of £16.85 million.
Erik Engström of RELX PLC (LSE:REL) and Rolls-Royce Holdings PLC (LSE:RR.)’s Tufan Erginbilgic took second and third on the list, netting £13.64 million and £13.61 million respectively.
Bosses pay has long been a hot topic in the UK, with the London Stock Exchange chief previously calling for salaries in line with US companies in order to secure talent, but the High Pay Centre noting the increase comes as households grapple with higher costs.
8.18am: FTSE 100 sees green at open
The FTSE 100 enjoyed a bright start on Monday morning, climbing 54 points to 8,222.
This comes after a turbulent week of trading, with worse-than-expected jobs data earlier in the month sending stocks spiralling globally.
Burberry Group PLC (LSE:BRBY) saw the biggest gains, climbing 1.6%, with Diageo PLC (LSE:DGE), B&M European Value Retail SA (LSE:BME) and J Sainsbury PLC (LSE:SBRY) also among early risers.
8.05am: Oil prices jump
Oil prices continued on an upward trajectory on Monday morning, as heightened tensions in the Middle East appeared to stick on traders’ minds.
Brent crude gained 1.3% to sit at US$80.05 a barrel on Monday morning, while West Texas Intermediate climbed 0.7% to US$77.29.
Prices had climbed steadily over the course of last week, on lingering concerns over an expansion of conflict in the Middle East.
Reassuring jobs data in the US also prompted prices to rise, with unemployment claims figures released last week coming in below expectations and in turn boosting sentiment towards the world’s largest economy.
7.49am: Bad weather prompts record UK insurance claims
Poor weather prompted UK insurance claims between April and June to hit their highest since records began, the Association of British Insurers (ABI) has reported.
Some £1.4 billion was paid out to homeowners over the period, up 5% against the previous three months, marking the highest quarterly figure since records began in 2017.
This came as the UK faced a spate of poor weather between last autumn and spring, with official data showing rainfall from October to March led to the country’s second wettest period on record.
Weather-related insurance claims sat above £100 million for the fifth consecutive quarter between April and June, the ABI said, at £144 million.
Average payouts climbed by 16% over the three months to £5,284, the group added, with consumer group Which? warning some had struggled to make claims.
“Good quality home insurance is increasingly important, yet customers with these products face some of the lowest claims acceptance rates,” the group said.
“While some home insurers' prices are going up, research has found that some are prolonging customers' ordeals by failing to deal with claims in an appropriate manner.”
7.33am: Bharti acquires BT stake
BT Group PLC (LSE:BT.A) has announced India’s Bharti Global has taken a stake in the FTSE 100 telecoms firm.
Altice UK, BT’s top shareholder, will sell a 24.5% stake to Bharti under the agreement, with 9.99% being transferred initially.
“We welcome investors who recognise the long-term value of our business, and this scale of investment from Bharti Global is a great vote of confidence,” BT chief executive Allison Kirkby commented.
“BT has enjoyed a long association with Bharti Enterprises, and I'm pleased that they share our ambition and vision for the future of our business.
“They have a strong track record of success in the sector, and I look forward to ongoing and positive engagement with them in the months and years to come.”
Altice, owned by telecoms tycoon Patrick Drahi, first bought into BT in 2021 but has come under pressure due to high debt levels.
BT had previously been a shareholder of Bharti between 1997 and 2001, with the firm said to not be considering a wider takeover offer for the British group.
7.20am: Stocks seen higher
London’s blue-chip index is expected to edge higher on Monday morning, with investors still awaiting a full recovery after weak US jobs data hit global stocks earlier this month.
Asian markets largely climbed overnight, including India’s Nifty 50 by 0.25%, while Japan’s Nikkei 225 enjoyed a 0.6% gain.
In the UK, the Association of British Insurers noted bad weather had sent insurance claims up 5% to £1.4 billion between April and June, marking the highest quarterly figure since record began in 2017.
BT Group has also made headlines, as Altice UK announced it would sell a 24.5% stake in the FTSE 100-listed firm to India’s Bharti Global.
Landscaping products firm Marshalls PLC (LSE:MSLH) is among those set to report on Monday, with Barrick Gold Corp also set to update in the US.