- FTSE 100 up 15 points
- Unemployment falls unexpectedly
- Rate cut hopes dialled back
4.04pm: FTSE 100 heads for positive finish
London’s blue chips held in positive territory as the end of the trading day approached, with the FTSE 100 up 15 points at 8,225.
JD Sports Fashion PLC (LSE:JD.) topped the day’s risers, climbing 2.2% and recouping some of the fall seen after it faced a broker downgrade on Monday.
J Sainsbury PLC (LSE:SBRY) added 2.1% in the meantime, following Kantar data which showed the supermarket had increased its market share at the fastest pace since 1997 in recent weeks.
Miners remained downtrodden, with Antofagasta PLC (LSE:ANTO) leading the day’s fallers, down 2.1%, followed by the likes of Glencore PLC (LSE:GLEN) and Anglo American PLC (LSE:AAL).
3.48pm: AstraZeneca becomes first London-listed company worth over £200bn
AstraZeneca PLC (LSE:AZN) has become the first UK-listed company to surpass a £200 billion stock market valuation after shares gained on Tuesday.
Shares notched up 1.2% to 12,928p throughout the day, leaving the pharmaceutical giant with a £200.02 billion valuation.
This comes after shares have climbed almost 20% this year, with the company surpassing oil heavyweight Shell PLC (LSE:SHEL, NYSE:SHEL) in April to become the most valuable London-listed company.
3.40pm: Gold prices boosted on US rate cut optimism
Gold prices gained ground after soft US producer price index data on Tuesday boosted optimism that the Federal Reserve would cut interest rates soon.
The precious metal had slipped to as low as US$2,459 per ounce ahead of the Bureau of Labor Statistics data, but regained ground after to peak at US$2,475 on Tuesday.
Producer prices rose by 0.1% over the course of July, against expectations for 0.2%, prompting further optimism that inflation had come under control in the States.
Economists subsequently dubbed the data “good enough” for Federal Reserve policymakers to begin cutting base rates from next month.
3.19pm: German investor confidence plunges at fastest pace in two years
Investor confidence towards Germany has plunged in recent weeks, suffering the sharpest drop since July 2022.
Research institute ZEW’s Indicator of Economic Sentiment showed confidence has halved since last month, dropping by 22.6 points to 19.2 and taking sentiment toward Europe’s largest economy to its lowest since January.
“The economic outlook for Germany is breaking down,” ZEW president Achim Wambach commented.
The drop came as wider economic expectations for the Eurozone, US and China also deteriorated, he said, hitting export-intensive German sectors as a result.
“It is likely that economic expectations are still affected by high uncertainty, which is driven by ambiguous monetary policy, disappointing business data from the US economy and growing concerns over an escalation of the conflict in the Middle East,” Wambach added.
2.52pm: US stocks rally on soft wholesale inflation reading
Softer-than-expected wholesale inflation figures on Tuesday morning sent the Nasdaq, Dow Jones and S&P 500 up as the market opened.
The Nasdaq gained 1.3% after the opening bell, followed by 0.8% and 0.5% for the S&P 500 and Dow Jones respectively.
This came after July’s producer price index reading came in lower than expected, spelling positive news in terms of Federal Reserve rate cuts soon.
According to the Bureau of Labor Statistics, producer prices, which are a key measure of wholesale inflation, ticked up 0.1% over the month, against expectations for 0.2%, and slowed from 2.7% to 2.2% on an annual basis.
Pantheon Macroeconomics analysts noted the figures were “good enough for the Fed to start easing [rates] in September”.
Regional readings suggest price rises will continue to slow over the coming months too, Pantheon said, prompting further optimism for rate cuts ahead.
2.36pm: Stocks move higher into afternoon
The FTSE 100 returned to positive territory on Tuesday afternoon, climbing 7 points to reach 8,217.
J Sainsbury PLC (LSE:SBRY) continued to lead risers with a 2.6% gain, as water firms United Utilities PLC and Severn Trent PLC (LSE:SVT) also climbed.
In the absence of any major fallers, miners were among the day’s biggest losers, with Antofagasta PLC (LSE:ANTO), Glencore PLC (LSE:GLEN) and Anglo American PLC (LSE:AAL) all off the mark.
The FTSE 250 and 350 indexes also ticked up into the afternoon, led by Just Group PLC (LSE:JUST) with a 16.4% gain after the retirement product specialist posted strong results earlier in the day… Read more
2.23pm: US producer price index climbs less than expected
US producer prices, a key measure of wholesale inflation, climbed slower than forecasts in July, fuelling expectations that the Federal Reserve would soon cut interest rates.
The index climbed by 0.1% over the course of the month, according to Bureau of Labor Statistics data, and was flat when excluding volatile food and energy components.
Forecasts from economists polled by Dow Jones had been for a 0.2% increase, with the annual rate falling to 2.2% from 2.7% in June.
2.13pm: London favoured among European stock markets - analysts
Bank of America analysts have said London is now investors’ favoured choice among European markets, following a dramatic turnaround since last year.
According to the bank, the number of investors planning to build stakes in London-listed companies over the coming year has jumped in the last month, as more companies have been granted “overweight” ratings.
London-listed companies now account for 30% of such ratings across Europe, Bank of America said, against less than 10% in July.
High inflation had seen London ranked lowest on the Bank of America list 18 months ago, with unfunded tax cuts under Liz Truss and the energy crisis also hitting sentiment.
1.23pm: Bellway turns back on Crest Nicholson merger
Bellway PLC (LSE:BWY) has scrapped plans to launch a £720 million takeover bid for rival housebuilder Crest Nicholson PLC (LSE:CRST).
After the deadline for a firm bid to be made was extended last week, Bellway said on Tuesday that it no longer intended to make an offer for Crest.
“Bellway remains confident that its robust balance sheet and operational strength, combined with the depth and quality of its land bank, will enable Bellway to deliver volume growth in the years ahead,” the company said in a statement.
Crest Nicholson had previously said it was “minded to accept” Bellway’s bid, with the deadline for the offer having been extended for further due diligence by each.
Bellway climbed 3.6% to 2,916p on the news, while Crest Nicholson fell 15.7% to 222p.
1.09pm: EV demand faces blow on end of tax benefits - report
Demand for electric vehicles (EVs) could face a blow when benefits for the cars end next year, industry members say.
Exemptions on both vehicle excise duty and the expensive car supplement for EV drivers will end in 2025, coming after sales have already dropped behind government targets.
Close Brothers Motor Finance revealed a survey on Tuesday that showed 54% of EV drivers had bought their cars to take advantage of such savings.
A third of respondents were not aware of changes to road tax from 2025, the group added, with 33% of those noting they would not have bought an EV had they known.
Close Brothers sales director Lisa Watson pointed out that the government’s zero emission vehicle (ZEV) mandate, which requires manufacturers to make up a growing proportion of their annual sales with EVs, was “already proving a challenge”... Read more
12.27pm: Dow Jones seen lower as US stocks set for mixed start
US stocks are set to face a mixed start on Tuesday as investors await key inflation and retail sales data later this week.
Futures had the Dow Jones falling 56 points to 39,424 ahead of Tuesday’s opening bell, while the Nasdaq and S&P 500 were expected to tick up 38 and 6 points respectively.
This comes after the Dow Jones fell on Monday, as the Nasdaq and S&P 500 largely traded flat.
Richard Hunter, analyst at interactive investor, noted the muted start to the week could be “the calm before the storm” as investors wait in anticipation for consumer price index data on Wednesday, before retail sales figures on Thursday.
“Any readings above estimates [for inflation] could well lead to further volatility and concerns that the Federal Reserve has missed the boat in not cutting interest rates early enough, leading towards potentially recessionary territory,” he said.
“Similarly, the retail sales print on Thursday carries true weight given the importance of the consumer to US growth.”
The Home Depot Inc is among companies set to report on Tuesday, with producer price index data also due.
12.15pm: Sainsbury’s tops risers on market share gains
J Sainsbury PLC (LSE:SBRY) topped risers on the FTSE 100 on Tuesday after Kantar data revealed the supermarket enjoyed its biggest market share gain since 1997.
Shares in the retailer ticked up 2% following the report, which showed Sainsbury’s market share increased from 14.8% to 15.3% in the month to August 4… Read more
National Grid PLC (LSE:NG.) and SSE PLC (LSE:SSE) also sat among risers on a quiet day for company news, climbing 1.1% and 1%.
This came after news Ofgem had approved their £2.4 billion electricity grid link between Scotland and Yorkshire… Read more
Overall, the FTSE 100 slipped 9 points to 8,200.
11.56am: Oil prices stall on surplus supply warning
Oil prices stalled on Tuesday after the International Energy Agency warned production could be on course to outdo supply by the end of this year.
Following warnings of a slowdown in global demand on weakness from China, the international agency said there could be surplus supply later this year and into next.
This is regardless of whether OPEC opts to reverse supply cuts in the coming months, after the cartel signalled earlier in August that production could be ramped up.
“Our current balances suggest that even if those cuts remain in place, global inventories could build [...] in 2024 and again in 2025 [to] more than cover expected demand growth,” the IEA said.
OPEC, which accounts for over 35% of global supply, trimmed demand forecasts on Monday, citing weaker uptake from China.
This comes after growing tensions between Iran and Israel had sent prices higher, with warnings over demand stalling growth after five consecutive sessions of gains.
West Texas Intermediate ducked below the US$80.00 a barrel mark to sit at US$79.90 on Tuesday, while Brent crude sat at US$82.01, after hitting US$82.62 on Monday.
11.32am: Genuit falls as 'subdued' trading hits results
Genuit Group PLC (LSE:GEN) sat among the FTSE 250's biggest losers on Tuesday after unveiling lower interim profits on “subdued” conditions in the construction sector.
Underlying pre-tax profit fell 6.7% to £37.6 million over the six months to June, the FTSE 250-listed air conditioning and heating systems maker reported on Tuesday.
This was as revenue dipped by 10.7% to £272.4 million on negative trends across the market.
Though progress was made on margins, which climbed from 15.4% to 16.0%, AJ Bell analyst Russ Mould said the company was “ultimately [...] reliant on an improvement in the wider backdrop”... Read more
Shares fell 3.7% to 448p following the results.
10.44am: Interest rate cut hopes stalled on wage growth data - analyst
Hopes for interest rate cuts over the coming months have been placed on hold after official data showed wages climbed by 5.4% over the three months to June, analysts say.
Though this was lower than the 5.7% growth recorded over the previous three months, Charles Stanley analyst Rob Morgan warned the latest figure was still too high.
“Wage inflation is a key number to help the Bank of England assess how quickly it should cut interest rates as it’s a significant component of services sector prices,” he said.
“While goods inflation has been largely contained for the time being, services inflation continues to run hot, driven by higher wages.”
A second consecutive cut to base interest, after policymakers reduced the bank rate from 5.25% to 5.00% earlier this month, was unlikely as a result, Morgan noted.
Highlighting ONS data that also showed a surprise drop in unemployment to 4.2%, he said the market “taking a long time to balance” would strengthen the hawkish case for awaiting further evidence before another cut... Read more
“The stickiness of wages data continues to be a source of discomfort and casts considerable doubt on near-term cuts,” Morgan added.
“We are very much in a holding pattern for rates for a few months as more data comes through.”
10.04am: Sterling gets boost on surprise drop in unemployment
The pound got a boost on Tuesday morning after ONS data showed UK unemployment unexpectedly dipped in the three months to June.
Against the dollar, sterling climbed 0.3% to US$1.28, returning to the level for the first time since last-weeks global sell-off.
The euro also dropped against the pound following the ONS data, by 0.3% to 85.3p.
Figures had shown a fall in unemployment from 4.4% to 4.2% over the three months to June, with markets having been expecting a slight increase.
The rise for the pound came “partly as traders shifted their bets slightly on just how long it will be before there’s another interest rate cut,” Hargreaves Lansdown’s Susannah Streeter explained.
ONS data also showed wage growth of 5.4% over the period, which, despite being down on 5.7% previously, may have policymakers worried of an uptick in pay and subsequently inflation once again, Streeter added.
9.47am: Oil rally ‘peters out’ on Tuesday
Oil prices appeared to steady on Tuesday morning after growing fears over escalating tensions between Iran and Israel had fuelled a post-weekend rally.
Brent crude and West Texas Intermediate held flat at US$81.86 and US$79.65 respectively on Tuesday, following gains of 3% and 3.7% on Monday.
Hargreaves Lansdown analyst Steve Clayton noted the rally had “petered out” overnight, adding “perhaps it was the lack of any early response from Iran after Israel’s assassination of senior Hamas figures, or just profit taking after the sharpest rally for some while”.
Prices had been fuelled by fears of an impending wave of new Iranian airstrikes against Israel, alongside reassuring US economic data last week.
9.21am: Just Group jumps as profit soars
Just Group PLC (LSE:JUST) notched up a 13% gain to lead the FTSE 350’s risers on Tuesday after reporting a spike in first-half underlying profit.
New business sales growth, higher recurring earnings and improved efficiency led a a 44% increase in underlying operating profit to £249 million, the retirement product specialist reported.
This came as retirement income sales climbed 30% to £2.5 billion over the six months to June and margins ticked up from 8.5% to 9.0%.
“We have never been more confident in our ability to deliver sustainable and compounding growth,” chief executive David Richardson commented.
Just Group added second half new business volumes would “be similar to the excellent performance in the first half,” as strong market conditions persist... Read more
Shares climbed 13.4% to 133.14p.
9.00am: Grocery inflation picks up for the first time in 17 months
Grocery prices climbed at a faster rate over the month to August 4 for the first time since March last year.
According to Kantar analysts, prices across Britain’s supermarkets climbed by 1.8% over the period, against 1.6% a month earlier.
“Having reached its lowest rate in almost three years in July, August saw inflation nudge up again slightly,” Kantar retail and consumer insight head Fraser McKevitt said.
“While this is noticeable following 17 straight months of falling rates, it actually marks a return to the average levels seen in the five years before the start of the cost-of-living crisis.”
Kantar added that prices rose across 182 product categories and fell among 89 others, with spending on special offers rising over the month.
Wine and beer sales benefitted from the Olympic opening ceremony and Euros respectively, as some £10 million was spent on the latter in supermarkets on the day of the final.
J Sainsbury PLC (LSE:SBRY) recorded its largest annual market share gain since 1997, of 0.5%, Kantar said, while Tesco PLC (LSE:TSCO) and Ocado Group PLC (LSE:OCDO) also scored higher sales.
8.47am: Slowing wage growth sparks debate over next BoE rate cut
Analysts are split over the prospect of further cuts to base interest in the UK this year after data revealed on Tuesday that wage growth was slowing.
Figures from the ONS showed wages climbed by 5.4% between April and June, compared to 5.7% in the previous three months.
Capital Economics deputy chief Ruth Gregory noted the data was “a sign that labour market conditions are continuing to cool,” adding the figures supported the group’s forecast for two more base rate cuts this year.
EY Item Club analysts argued the slowdown was not “sufficiently significant” to prompt Monetary Policy Committee members to vote on back-to-back cuts, however.
On policymakers, EY chief economist Peter Arnold commented: “The doves will interpret slower wage growth as evidence that the inflation shock is dissipating, suggesting that policy can be gradually loosened.
“But the hawks will likely maintain that the rate of pay growth is still too high.”
8.30am: FTSE 100 climbs early on
The FTSE 100 enjoyed a positive start on Tuesday morning after ONS data signalled Britain’s labour market was stronger than expected in the three months to June.
London’s blue chips added 22 points early on to reach 8,232 following the data, which showed unemployment unexpectedly fell to 4.2% over the period.
“The numbers go some way in justifying the Bank of England’s recent decision to cut interest rates given a relatively stable economy,” interactive investor analyst Richard Hunter commented.
“Although, the timing and amount of the next cut is up for debate, swinging from a possible November reduction to nothing further this year at all.”
The FTSE 250 was also sent higher following the report, by 49 points to 20,726, alongside London’s junior market.
8.09am: Unemployment falls expectedly in UK
Unemployment took an unexpected plunge over the three months to June, while economic inactivity climbed to a 13-year high, official figures showed on Tuesday.
According to the Office for National Statistics, unemployment came in at 4.2% over the three months, down from 4.4% previously and against expectations for 4.5%.
The number of people out of and not looking for work hit its highest since 2011 meanwhile, with 22.2%, or 9.5 million people, said to be economically inactive.
Chancellor Rachel Reeves commented that there was “more to do” in supporting people into work, with many out due to long-term sickness, adding “this will be part of my budget later in the year”.
She added: “I will be making difficult decisions on spending, welfare and tax to fix the foundations of our economy so we can rebuild Britain.”
Wage growth also slowed over the period, from 5.7% to 5.4%, coming in at its lowest rate in almost two years.
7.50am: Ofgem approves £3.4bn power grid between Scotland and Yorkshire
A £3.4 billion electricity transmission project to carry power from offshore windfarms between Scotland and Yorkshire has been approved by Ofgem.
Approval for the 500-kilometre grid connection, which is a joint venture between National Grid PLC (LSE:NG.) and SSE PLC (LSE:SSE)’s SSEN, was confirmed on Tuesday.
This will see a largely subsea cable placed between Peterhead in Aberdeenshire and Drax Group (LSE:DRX)’s North Yorkshire power station.
“Today's announcement is a further step in putting the regulatory systems and processes in place to speed up network regulation to achieve its aim,” Ofgem chief executive Jonathan Brearley commented.
7.34am: EV sales slip in Europe
Sales of electric vehicles (EVs) in Europe dipped over the course of July after subsidies were pulled from Germany late last year.
Sales dropped by 8% across Europe, including the UK, compared to July 2023, while month-on-month the figure was down 28%, according to research house Rho Motion.
This was largely driven by the abrupt end of subsidies in Europe's largest market Germany last December, which were pulled as part of cuts to public spending.
Over the year so far, sales of EVs in Europe were flat at 1.7 million, with the figures coming as countries aim to phase out new petrol and diesel cars by 2035.
New car registration data from the UK last week showed targets on EV sales were not being met, prompting calls for further government support.
Overall, global EV sales climbed 21% over the course of July, fuelled by a 31% increase in China and 7% uptick in North America.
7.12am: Stocks seen flat
Futures had the FTSE 100 barely moving on Tuesday morning as investors hoped for another day of calm after a sell-off early last week.
Following a quiet Monday, a flat start for London’s blue chips would come after BT Group PLC (LSE:BT.A) and JD Sports Fashion PLC (LSE:JD.) were the only real movers on the index on Monday, rising and falling respectively.
This comes after a mixed but largely muted showing across Asian markets overnight, with Tokyo’s Nikkei 225 seeing the best performance, adding 3.2%.
On Tuesday, attention turns to Flutter Entertainment PLC (LSE:FLTR), with the betting firm in line to post interim results after rival Draftkings Inc (NASDAQ:DKNG) wound down full-year guidance on tougher trading in the US.
Unemployment data is also due in the UK, alongside the producer price index across the pond in the US.