- FTSE 100 up 25 points
- Bunzl, easyJet lead risers
- Housebuilders drop
3.57pm: easyJet, British Airways owner soar as FTSE 100 holds gains
easyJet and British Airways owner IAG gained altitude on Tuesday to aid gains for the FTSE 100, which looked on course for a positive finish.
The airlines had been given a boost after Ryanair Holdings PLC (LSE:RYA) reassured a fall in ticket prices would be far less dramatic than originally expected for the summer.
easyJet climbed 6.5% on the news, while IAG gained 1.7%. Ryanair’s European-listed shares also jumped, by 4.3%.
Bunzl led the way among the FTSE 100’s risers though, soaring 7.5% after unveiling hiked shareholder rewards and improved guidance in interim results earlier on.
Miners Anglo American, Rio Tinto and Antofagasta enjoyed gains too on the back of rising copper and iron ore prices.
Housebuilders remained downtrodden and among the FTSE 100’s biggest losers in the meantime, as calls for building reform resurfaced after Monday’s major fire in Dagenham.
Barratt Developments dropped 6.3%, while Berkeley, Persimmon, Vistry and Taylor Wimpey also fell.
Overall, the FTSE 100 ticked up 25 points to 8,353.
3.44pm: Oil prices tipped to fall as supply surplus expected
Goldman Sachs has forecast oil prices to fall over the coming months on expectations of a supply surplus.
Brent crude will likely dip below US$80 a barrel to an average of US$77 next year, the Wall Street bank said on Tuesday, against previous expectations for US$82.
This is as anticipation grows that Opec, which accounts for over 35% of the world’s supply, could scale back on voluntary cuts in the months ahead.
Coupled with slowing demand from China, this could lead to an oversupply , according to the bank, which echoed forecasts from Morgan Stanley (NYSE:MS) for prices to fall in 2025.
Benchmark Brent crude has averaged US$83 a barrel so far this year, with growing tensions in the Middle East buoying prices most recently.
On Tuesday, Brent crude receded from gains seen after strikes were exchanged over the weekend between Israel and Lebanon’s Hezbollah, falling 1.5% to just over US$80.
5.23pm: Britvic shareholders greenlight Carlsberg takeover
Britvic PLC (LSE:BVIC) looks set to be brought out by Carlsberg after shareholders overwhelmingly voted in favour of a proposed £3.3 billion deal on Tuesday.
The J2O owner said on Tuesday that some 99.69% of 165.8 million shareholders who voted on the deal backed the takeover.
This follows a rejected £3.1 billion takeover bid in July, which Britvic said undervalued the company.
Other conditions remain yet to be satisfied, Britvic added on Tuesday, including regulatory approval, with the deal set to be completed in the first quarter of next year.
2.52pm: Wall Street slides early on
US stocks started on the back foot on Tuesday, with the Dow Jones opening lower after closing out Monday at a record high.
Having closed at an all-time high of 41,240, the Dow Jones retreated from gains on Tuesday’s open, falling 67 points.
The Nasdaq and S&P 500 fell too, by 82 and 18 points respectively as investors awaited the week’s key event in NVIDIA results on Wednesday.
Following a string of earnings beats, expectations are for the chip-making giant to impress with results once again on Wednesday.
However, interactive investor Richard Hunter warned such “stellar expectations” leave “much scope for disappointment”.
“While AI enthusiasm remains a major factor in propelling the relevant indices, the dual concerns of heady valuations and stretching estimates take on more significance as these markets continue to rise.”
Elsewhere on Tuesday, S&P Case-Shiller index data showed house prices in the 20 major US metropolitan markets climbed 6.5% over the 12 months to June, subsiding against last month but growing faster than market expectations.
1.59pm: JD Sport slumps but FTSE 100 holds gains
JD Sports Fashion PLC (LSE:JD.) emerged as the biggest loser on the FTSE 100 come Tuesday afternoon, having fallen 5.8%.
This follows gains last week after the retailer reported a surge in quarterly sales, with sector data from the CBI subsequently showing on Tuesday a drop across the industry this month.
B&M European Value Retail SA (LSE:BME) also sat among the index’s biggest fallers, alongside housebuilders after calls for building reform resurfaced following a fire at a site in Dagenham on Monday.
Bunzl PLC (LSE:BNZL) and easyJet PLC held onto gains to lead the FTSE 100’s gainers in the meantime, while miners and oil companies also continued to perform well on a rise in the likes of copper and fuel prices.
Overall, the FTSE 100 ticked up 17 points to 8,345.
1.16pm: Housebuilders hit as cladding to form part of Dagenham fire probe
Cladding on a multi-storey building in Dagenham which went up in flames on Monday morning will be investigated, the London Fire Brigade has confirmed.
This will form part of a probe into the cause of the fire, which saw over 80 people evacuated from the commercial and residential building on Freshwater Road early on Monday morning. All people inside were “accounted for,” the Brigade has since said.
Criticism of the government has subsequently emerged, with London Fire Brigade noting the building had known fire risks and was undergoing remediation work over “non-compliant cladding”.
Fire Brigades Union general secretary Matt Wrack said the fire was the latest case in a “national scandal” over building safety.
He slammed ministers for putting the “interests of big business above human life” and argued warnings over “deregulation in the building sector” had repeatedly been ignored.
“Hundreds of thousands of people continue to live in buildings like it, with various failings in fire safety,” he said in a statement.
“As we saw at Grenfell Tower, this can have horrific and tragic consequences.”
Housebuilders took a hit on Tuesday on the back of the incident, with Barratt Developments PLC (LSE:BDEV), Berkeley Group Holdings PLC (LSE:BKG), Persimmon PLC (LSE:PSN), Vistry Group PLC (LSE:VTY) and Taylor Wimpey PLC (LSE:TW.) all among the FTSE 100’s biggest daily losers.
12.53pm: Budget will be “painful,” PM warns
Prime minister Keir Starmer has warned of a “painful” budget later this year as the government grapples with a £22 billion “black hole” in public finances.
Speaking at Downing Street on Tuesday, Starmer said the government had “no other choice” as the Labour government approaches its first budget on October 30.
“There is a budget coming in October, and it’s going to be painful,” he said, according to PA reporters.
“Those with the broadest shoulders should bear the heavier burden.”
Starmer added plans remained to ensure national insurance, VAT and income tax would not be hiked, but said he would not “pre-empt the budget” when asked about increases elsewhere... Read more
12.21pm: Wall Street seen lower as NVIDIA earnings remain in focus
Wall Street looked set for a poor start on Tuesday morning as NVIDIA’s latest update on Wednesday remained front and centre of investors’ minds.
This follows a negative session for both the Nasdaq and S&P 500 on Monday, with futures showing each 0.1% lower ahead of Tuesday’s bell.
The Dow Jones was expected to sit just off the mark on Tuesday’s open too.
“Given their disproportionate weighting and current market darling NVIDIA in particular, this week is set to be a testing time for tech stocks,” interactive investor analyst Richard Hunter commented.
US house price and consumer confidence data is also due on Tuesday, after optimism has grown around base rate cuts soon, fuelled by comments from Fed chair Jerome Powell last week.
11.45am: Pound at two-year high against dollar
Speculation that the Federal Reserve will launch a string of base rate cuts over the remainder of this year has prompted the pound to rise to its highest against the dollar in more than two years.
At US$1.32, the pound was up 0.25% for the day on Tuesday and at levels not seen since March 2022.
This comes as markets price in a string of rate cuts by the Federal Reserve after chair Jerome Powell said it was time for a policy shift during his speech at Jackson Hole last Friday.
Expectations are for around 30 basis points of cuts by the Federal Reserve over the coming months, against less than five from the Bank of England.
11.31am: Retail sales fall for third successive month
Confederation of British Industry (CBI) data on Tuesday morning showed retail sales have fallen for a third successive month in August.
Some 27% of retailers reported lower sales in August, the CBI reported, against 43% in July and above expectations for 11%.
Sentiment amongst retailers weakened in August, with firms expecting their business situation to deteriorate moderately over the next three months #DTS pic.twitter.com/kS1rzCFxiU
— CBI Economics (@CBI_Economics) August 27, 2024
Despite moderating, this marked the second-weakest reading since April, with the CBI adding retailers expected another decline in September.
“Retail sales volumes continued to disappoint in the year to August, with contractions also being seen in the wholesale and motor trade sectors,” CBI economist Martin Sartorius commented.
“Retailers reported increased caution regarding their investment and hiring plans, which seemed to reflect concerns about persistently weak demand conditions.”
11.12am: Primark owner, housebuilders weigh on FTSE 100
The FTSE 100 gave up gains seen earlier in the day on Tuesday, as Primark owner Associated British Foods (ABF) and housebuilders looked to weigh on the index.
ABF moved 2.4% lower following a downgrade by Deutsche Bank analysts earlier in the day to sit among the day’s biggest fallers.
Deutsche pushed ABF from a ‘hold’ to a ‘sell’ rating, noting “the Primark margin recovery story has played out” and profitability at subsidiary British Sugar looked set to decrease.
Housebuilders also weighed on the index in the meantime, with Berkeley Group Holdings PLC (LSE:BKG) leading fallers, as Vistry Group PLC (LSE:VTY), Barratt Developments PLC (LSE:BDEV), Persimmon PLC (LSE:PSN) and Taylor Wimpey PLC (LSE:TW.) also dipped after gains in recent weeks.
Come mid-morning, the FTSE 100 was 9 points up at 8,336.
10.49am: easyJet soars as Ryanair reassures on fares
easyJet PLC soared over 4% to sit among the FTSE 100’s biggest risers on Tuesday morning after low-cost peer Ryanair Holdings PLC (LSE:RYA) reassured on falling fares.
Ryanair boss Michael O’Leary said in an interview that fares would likely fall closer to 5% this summer, against anticipations last month of a 10% drop.
He had previously warned of an “ugly scenario” for carriers, but told Reuters on Tuesday such a situation “looks like it has disappeared”.
“While fares were kind of softening during April, May and June, that has levelled out,” he added.
Peel Hunt analysts said easyJet and British Airways-owner IAG would likely outperform Ryanair this year, despite its reassurances.
“We anticipate that the indication [...] fares would fall is likely to see the group report much a worse yield performance than its UK-listed peers,” Peel Hunt said on Ryanair.
easyJet climbed 4.4% to 467.70p on Tuesday, while Ryanair ticked up almost 6% to €16.01.
10.34am: Hobbycraft scooped up by retail investor Modella
Hobbycraft has changed hands for an undisclosed fee after 14 years of ownership by Bridgepoint.
Specialist retail investor Modella was confirmed to have taken over the arts and crafts retailer on Tuesday, after Hobbycraft had been put up for sale in February.
Under Bridgepoint, Hobbycraft grew from 47 stores in 2010 to 124 today, with some 2,000 staff now employed by the retailer.
Modella managing director Joseph Price said the firm would continue “accelerating the team’s growth strategy through investment in [...] physical footprint”.
“[This displays] a real commitment to bricks and mortar retail,” he added, after Britain’s highstreets have come under pressure in recent years following the pandemic and cost of living crisis in quick succession.
10.05am: Surging copper prices aid miners
Copper was also among commodities to surge early on in the week, aiding gains for miners as iron ore prices also looked to return to growth.
At US$4.29 a pound, copper sat at its highest since mid-July on Tuesday morning as optimism around a US base rate cut soon remained following Fed chair Jerome Powell’s Jackson Hole speech last week.
Anglo American PLC (LSE:AAL) and Rio Tinto PLC remained among the FTSE 100’s risers on Tuesday morning, also aided by an improving outlook for iron ore on falling stockpiles in China.
9.47am: Germany economy confirmed to have shrunk
Official data on Tuesday morning confirmed that the German economy shrunk over the second quarter compared to the first.
The Federal Statistical Office Destatis said gross domestic product contracted by 0.1% quarter-on-quarter in its final report for the period.
ING economists noted the fall was due to “weak private consumption and plunging activity in the construction sector”.
The contraction followed a 0.2% uptick over the first quarter, with a 2% drop in investment over the latest three months offsetting an increase in government consumption.
“With disappointing second-quarter growth and almost all confidence sentiment indicators pointing south, the German economy is currently back where it was a year ago: stuck in stagnation as the growth laggard of the entire eurozone,” ING added.
The pound ticked up 0.14% against the euro on the back of the data to reach €1.1832.
9.22am: Miners boosted as iron ore prices climb on China improvement
Miners Anglo American PLC (LSE:AAL) and Rio Tinto PLC sat among the FTSE 100’s biggest risers on Tuesday morning following a rise in iron ore prices on improving signs from China.
Iron ore surpassed the US$100 a ton mark on Monday, following a rise last week, as data on Friday showed stockpiles at Chinese ports had fallen over the previous four weeks.
This prompted speculation that oversupply issues were dissipating, with iron ore prices having slumped over the course of the last year.
It comes as uncertainty remains in China’s steel industry, prompted by woes in the country’s property sector.
BHP Group Ltd (LSE:BHP, ASX:BHP) chief executive Mike Henry had commented that the miner expected China’s property sector to turn around over the coming year, following the Australian firm’s results overnight.
Anglo American and Rio Tinto climbed 2.6% and 1.8% respectively on Tuesday morning.
8.58am: Harbour Energy soars as Wintershall Dea asset deal to close
Harbour Energy PLC (LSE:HBR) jumped over 7% on Tuesday morning after announcing its takeover of Wintershall Dea assets would likely be complete in September.
“This follows considerable progress made on satisfying the conditions to completion,” FTSE 250-listed Harbour said in a statement, including Mexican regulatory consent.
Harbour agreed the US$11.2 billion (£8.5 billion) share and cash deal in December, with co-owners BASF and LetterOne.
This would see it become one of the world’s largest independent oil and gas producers and comes as the company looks to expand from the UK after companies have been hit with a windfall tax in recent years.
Shares climbed 7.2% to 301p.
Harbour led the FTSE 250’s risers as a result, with the index as a whole climbing 99 points to 21,288.
8.42am: Bunzl, miners and oil firms buoy FTSE 100
The FTSE 100 enjoyed a positive start to the shortened trading week on Tuesday, jumping 48 points to 8,376.
Bunzl led the way after announcing a hike to shareholder rewards in interim results, climbing 10.8%.
Miners also helped to buoy the index, with Anglo American PLC (LSE:AAL) and Rio Tinto PLC among the index’s risers.
This came after BHP Group Ltd (LSE:BHP, ASX:BHP) reported a better-than-expected increase in underlying profit overnight in Australia, with the miner’s London-listed shares also climbing early on.
BP PLC (LSE:BP.) and Shell PLC (LSE:SHEL, NYSE:SHEL) aided the FTSE 100 too, climbing on Tuesday morning on the back of Monday's surge in oil prices after weekend strikes between Israel and Lebanon’s Hezbollah.
8.29am: Bunzl jumps to all-time high after interims
Bunzl PLC (LSE:BNZL) led the FTSE 100’s risers on Tuesday morning after hiking its interim dividend 10%, launching a £250 million share buyback and raising guidance for the year in results.
This followed a first half of 2024 where the FTSE 100-listed company saw revenue decline 0.4% to £5.7 billion though underlying trends improved in the second quarter and yet further in the first two months of the third… Read more
Shares climbed 10.8% to an all-time high of 3,560p.
8.22am: DS Smith closes in on £5.8bn takeover by International Paper
DS Smith PLC (LSE:SMDS) has moved one step closer to a £5.8 billion tie-up with International Paper, noting on Tuesday that a preliminary proxy statement had been issued by the latter.
DS Smith highlighted International Paper’s statement from late last week, which said the takeover was in its best interests and recommended shareholders approve.
This also included forecasts for International Paper’s adjusted profits to sit at US$1.93 billion this year, before climbing to US$2.43 billion and US$2.64 billion in 2025 and 2026 respectively.
DS Smith chief executive Miles Roberts had said last week that work on the merger was “going very well” and moving at “absolutely full steam”.
The duo initially agreed to the tie-up in April, after International Paper trounced a £5.1 billion offer from FTSE 100-listed Mondi.
7.50am: Next workers win equal pay case
Over 3,500 workers at Next PLC (LSE:NXT) have emerged victorious after a six-year legal battle for equal pay.
Store staff should be paid on equal terms with warehouse workers, an employment tribunal ruled, with lawyers for the former suggesting the win could be worth over £30 million in back-pay.
The tribunal had found that Next failed to show that the difference in pay between the two groups was not sex discrimination, according to the Leigh Day lawyers.
This is as an overwhelming majority of Next’s store workers are female, while most in its warehouses are men.
“When you have female-dominated jobs being paid less than male-dominated jobs and the work is equal, employers cannot pay women less simply by pointing to the market and saying it is the going rate for the jobs,” Leigh Day lawyer Elizabeth George commented.
Another lead claimant, Helen Scarsbrook, said: “It has been a long six years battling for the equal pay we all felt we rightly deserved but today we can say we won.”
Leigh Day added the ruling would be a “huge encouragement” for some 112,000 staff it was representing across the likes of Asda, Tesco PLC (LSE:TSCO), J Sainsbury PLC (LSE:SBRY), Morrisons and the Co-op in similar cases.
7.33am: Oil prices surge on Libya shutdown, rising Middle East tensions
Oil prices jumped on Monday after strikes between Israel and Lebanon’s Hezbollah over the weekend coincided with news Libya was to pause production.
Brent crude jumped 2.1% to US$81.25 a barrel throughout the day, while West Texas Intermediate climbed 2.3% to US$77.13.
Tensions appear to have scaled back and escalation prevented between Israel and Lebanon’s Hezbollah since, after an exchange of rocket and drone strikes.
However, reports from Libya’s eastern-based administration that oil production and exports will be stopped as a power struggle with the country's internationally recognised government in Tripoli goes on since buoyed prices.
Both brent and WTI held onto gains on Tuesday as a result.
7.17am: Stocks seen higher
The FTSE 100 looked set for a bright start on Tuesday morning as the trading week got underway following Monday’s bank holiday.
Futures had London’s blue chips adding 34 points at Tuesday’s open and extending gains seen last Friday.
Comments from Federal Reserve chair Jerome Powell at Jackson Hole that it was time for US rate cuts dominated headlines and offered a boost to stocks late on in the week.
In London, attention turns on Tuesday to FTSE 100-listed distribution specialist Bunzl PLC (LSE:BNZL) and its half-year report, while house price data is due from the US later in the day.
In other news, oil prices have surged early in the week, fuelled by concerns among traders that assaults in Lebanon between Israel and Hezbollah could spark wider conflict in the Middle East, coinciding with reports that production will be brought to a standstill in Libya.