- FTSE 100 up 34 points
- Whitbread jumps on Bernstein upgrade
- Pub garden smoking ban reportedly on cards
3.58pm: FTSE 100 on course for gain, European stocks eye record
London’s blue-chip index looked set for a gain on Thursday, having climbed 34 points to 8,377 come late trading.
Premier Inn owner Whitbread PLC (LSE:WTB) held gains and its spot as the index’s biggest riser, climbing 4.3% following an upgrade by Bernstein analysts earlier on.
Weir Group PLC (LSE:WEIR) and Spirax Group PLC followed among the day’s winners, gaining 2.9% each respectively, while Londonmetric Property PLC sat as the biggest faller, down 3.3%.
Across the Channel, European stocks looked to be nearing a record high, with the STOXX Europe 600 climbing 0.7% to 524 and just off a peak of 525 seen in June.
Technology stocks pushed the index higher, while positive inflation readings in the likes of Spain and Germany also boosted sentiment as Eurozone rate cut expectations for September climbed.
3.46pm: Nvidia loses $100bn in value early on
Nvidia Corp lost some US$100 billion in value after opening below the mark following post-market results on Wednesday.
Shares in the chipmaking giant fell more than 4% as Thursday’s trading got underway, before regaining some ground.
This equated to around US$100 billion for the company, which has ducked below its previously-held US$3 trillion market capitalisation.
Results showed revenues over the second-quarter had more than doubled to US$30 billion, though forward guidance of US$32.5 billion for the third was below the top-end of market expectations.
Shares sat 3.2% lower later in the morning.
3.28pm: Oil prices spike as Libya output plummets
Oil prices rallied on Thursday afternoon as exports from Libya nosedived on the back of a standoff between rival political factions in the country.
Over half of Libya’s production, equivalent to 700,000 barrels a day, was offline during the day, according to Reuters.
This saw benchmark Brent jump 2.4% to US$80.47 a barrel, while West Texas Intermediate ticked up 2.6% to US$76.47.
Libya had produced around 1.18 million barrels a day in July, with the cuts coming as part of a standoff between eastern actions and the country’s internationally-recognised government.
Eastern factions have previously said they would shut off production until central bank governor Sadiq al-Kabir is reinstated to his post by the Presidency Council and Government of National Unity in Tripoli, in the west.
The standoff, over control of Libya’s central bank, has threatened to bring an end to four years of relative peace in the country.
2.53pm: Wall Street gains as GDP, jobs data paint better picture
Wall Street got a boost on Thursday morning after better GDP data and lower weekly jobless claims figures painted a stronger picture of the US economy.
The Nasdaq opened 0.7% higher following the bell, while the Dow Jones and S&P 500 ticked up 0.3% and 0.4% respectively.
Revised GDP data on Thursday morning showed the economy grew faster than first thought during the second quarter, by 3.0% against a previous estimate of 2.8%.
Figures also showed jobless claims had fallen by 2,000 to a seasonally adjusted 231,000 over the course of last week and sat lower than analysts' estimates.
“Overall, these data points will reaffirm that growth remains strong in the US even if the labour market is softening,” Validus Risk management analyst Ryan Brandham commented.
He added the figures would support expectations for a 25 basis point reduction to base interest when the Federal Reserve next meets in September, following anticipation for a steeper 50-point cut.
Nvidia Corp looked to recover from a sell-off after Wednesday’s post-market results in the meantime, opening 1.8% lower following a near 7% drop in after-hours trading initially.
2.39pm: Flutter gains as $330mln Georgia ruling to be appealed
Flutter Entertainment PLC (LSE:FLTR) gained on Thursday after announcing it would appeal a ruling against itself and partner Spribe following a trademark case in Georgia.
A Georgian court had ordered US$330 million be paid to Adjarabet shareholder Aviator LLC after the trademark and copyright case, which surrounded online betting game “Aviator,” developed by Spribe.
Flutter noted it was surprised by and strongly disputed the ruling, which it added would be appealed.
“The level of damages sought is egregious in nature and bears no resemblance to the actual economics of the property under debate,” the Flutter statement said.
Flutter’s London-listed shares climbed 1% to 15,795p on Thursday.
2.22pm: US economy grew faster than first thought in second quarter
US gross domestic product grew by 3.0% during the second quarter and faster than first thought, Bureau of Economic Analysis data showed on Thursday.
In its second estimate for the quarter, the Bureau of Economic Analysis raised the figure from 2.8% on an annual basis.
This was as consumer spending and import figures were revised upwards, boosting the figure despite being partially offset by reductions elsewhere.
These included “non-residential fixed investment, exports, private inventory investment, federal government spending, state and local government spending, and residential fixed investment,” the Bureau of Economic Analysis said.
2.13pm: Germany’s DAX hits record high on rate cut hopes
Germany’s DAX index hit a record high on Wednesday, fuelled by optimism around future interest rate cuts.
DAX climbed as high as 18,928 earlier in the day, surpassing a previous peak recorded in mid-May, before receding slightly for a 0.7% gain.
This came as inflation readings from across the Eurozone boosted rate cut expectations, with Spain recording earlier on that price rises subsided to 2.2% this month.
Figures from Germany later showed inflation eased to 2% in August across Europe’s largest economy, coming in below market expectations for a 2.3% rise.
Inflation data from across the Eurozone as a whole is due on Friday, with ING macro research head Carsten Brzeski noting the figures could leave the European Central Bank willing to cut interest in its next meeting in September.
“Fading inflationary pressure combined with fading growth momentum offers an almost perfect macro backdrop for another rate cut,” Brzeski said.
1.52pm: Sainsbury’s unveils £130mln plan to convert Homebase stores
J Sainsbury PLC (LSE:SBRY) has announced a £130 million plan to convert Homebase stores into supermarkets.
Under a deal struck with the DIY retailer, Sainsbury’s will buy 10 shops and convert these into its own sites for Christmas next year.
Some 1,000 jobs are expected to be created under the move, with Sainsbury’s set to offer interviews for at-risk Homebase staff.
Chief executive Simon Roberts commented: “Sainsbury’s food business continues to go from strength to strength.
“We want to build on this momentum which is why we are growing our supermarket footprint.”
The FTSE 100-listed supermarket also reiterated cash flow guidance for £500 million in the current financial year, alongside £1.6 billion for the three years to 2027.
“The addition of new locations means nearly 400,000 more people will be within a 10-minute drive of a Sainsbury’s supermarket,” Sainsbury’s added.
“The new stores will showcase Sainsbury’s latest food offer with a refreshed, innovative look and feel.”
Shares climbed 0.6% to 290.57p.
1.39pm: Prime minister does not rule out pub garden smoking ban
Prime minister Keir Starmer has not ruled out a possible ban on smoking in pub gardens and other outdoor areas.
When asked in Paris about reports of such a move, reported in The Sun, he said: “My starting point on this is to remind everybody that over 80,000 people lose their lives every year because of smoking”.
“That is a preventable death, it’s a huge burden on the NHS and, of course, it is a burden on the taxpayer.
“So, yes, we are going to take decisions in this space, more details will be revealed, but this is a preventable series of deaths and we’ve got to take action to reduce the burden on the NHS and the taxpayer.”
Leaked Whitehall documents showed ministers are considering widening the smoking ban under a strengthened tobacco and vapes bill.
This would see smoking prohibited at the likes of outdoor restaurants, sport venues, nightclubs and in small parks, with vape users and shisha bars also set to be targeted.
12.52pm: Wall Street set to climb
Wall Street was expected to enjoy a positive start to the day on Thursday as Nvidia recovered slightly following a sharp drop in pre-market trading after results last night.
Futures had the Dow Jones climbing 0.6% on Thursday’s opening bell, while the Nasdaq and S&P 500 were seen 0.1% and 0.2% higher respectively.
Heavyweight Nvidia had dropped close to 7% after post-market earnings on Wednesday, as its latest beat failed to overshadow guidance below the top-end of market expectations.
This had threatened to drag the Nasdaq and S&P down, as wider technology stocks also took a beating, but a slight recovery since left Nvidia 3.5% off before the market’s open, while peers looked to regain.
Scope Markets analyst Joshua Mahony commented: “If past performance is anything to go by, Nvidia will likely manage to overcome those estimates.
“For investors, this dip will likely represent a potential opportunity, while the wider markets will also be able to breathe a sigh of relief that the second quarter earnings season is behind us.”
Attention on Thursday turns to Lululemon Athletica’s after-hours report, while the latest estimate for second-quarter gross domestic product is also due, alongside jobs data.
12.25pm: Labour aims to cut housebuilding red tape
The UK government plans to create a 'New Homes Accelerator' to address delays in housing developments, deputy prime Mminister Angela Rayner hasannounced.
A 15-member team will work with councils to unblock approximately 300,000 homes stalled in the planning process.
Rayner said: "For far too long the delivery of tens of thousands of new homes has been held back by a failure to make sure the development system is working as it should.
"This government has a moral obligation to do everything within our power to build the homes that people desperately need and we won’t hesitate to intervene where we need to.
"Our New Homes Accelerator will quickly identify blockages, fix problems and support local authorities and developers to get shovels in the ground."
Shares in Persimmon PLC (LSE:PSN) rose by 0.5% to 1,651p; Bellway plc by 1.3% to 3,060p; and Taylor Wimpey by 0.8% to 161.1p.
11.47am: Pub garden smoking ban could force closures, industry warns
As ministers reportedly mull a ban on smoking in pub gardens and other outdoor areas, industry members have warned such a move could force businesses to shut.
UK Hospitality chief executive Kate Nicholls told BBC Radio 4 on Thursday that such a move would not come “without economic harm”.
She said: “It’s not without economic cost to businesses that are providing outside areas for smokers and non-smokers, and also vapers, because I note in some of the reports there’s suggestions that vaping in outside areas could also be restricted.
“This needs to be thought through very carefully before we damage businesses and economic growth and jobs.”
The Sun reported on Thursday that leaked Whitehall documents showed the government was considering widening the smoking ban under a strengthened tobacco and vapes bill... Read more
This would see smoking prohibited at the likes of outdoor restaurants, sport venues, nightclubs and in small parks, with vape users and shisha bars also set to be targeted.
11.33am: Pound recoups August losses
The pound has hit its highest level in just over a month and fully recouped losses seen in early August.
Come Thursday morning, sterling was up 0.23% for the day and trading at €1.1889.
This meant the pound had recovered on a drop to below €1.16 seen after the Bank of England opted to cut its base rate to 5% earlier in the month.
It comes as Eurozone rate cut speculation has grown after Spanish inflation data on Thursday showed price rises slowed to 2.2% this month, with figures due from Germany later in the day.
11.24am: UK to officially enter trans-Pacific trade bloc in December
The UK is set to officially join a trans-Pacific trading bloc on December 18 following ratification by Peru.
Entry into the Comprehensive and Progressive Agreement for Trans-Pacific Partnership will initially give UK exporters tariff-free access to Japan, New Zealand, Singapore, Chile, Vietnam and Peru.
This will eventually stretch to 11 countries, with the first six having ratified the UK’s entry already.
This comes as part of the former government’s post-Brexit trade goals, with the move set to eventually boost the UK economy by £2 billion annually in the long term.
11.11am: Eurozone economic sentiment picks up on Olympics
European Commission data on Thursday showed sentiment towards the bloc’s economy improved this month, climbing against market expectations.
Its economic sentiment indicator climbed from 95.8 to 96.9 points between August and July, reflecting improvement based on responses from businesses and households.
Analysts had predicted a flat month-on-month reading as the indicator remained off historic averages, weighed down by the struggling German economy.
ING economists noted the improvement “was mainly boosted by the French data, which immediately suggests that optimism around the Olympics boosted sentiment”.
Consumer confidence measures fell over the period, however, from -13.5 to -13.4.
10.52am: Diageo boosted on China brandy import backtrack
Diageo PLC (LSE:DGE) gained early boost on Thursday after China scrapped plans to introduce anti-dumping measures on imported brandy.
Shares in the FTSE 100-listed beverage company climbed early on before falling as they began trading without the right to their latest dividend award.
China launched a probe last January over European brandy imports on fears companies were selling drinks in the country below market rates.
This had weighed on liquor makers, with China making one of the largest markets for the likes of France’s Remy.
Producers said at the time that they suspected the move from China was part of a broader trade spat rather than the liquor market itself.
Diageo climbed 2.3% initially on the news.
10.05am: Whitbread leads FTSE 100 higher
Whitbread PLC (LSE:WTB) led the FTSE 100’s risers on Wednesday, following an upgrade by brokers at Bernstein.
Shares in the Premier Inn owner jumped 3.6% early on, after the analysts granted an “outperform” rating and upped its share price target to 3,300p.
JD Sports Fashion PLC (LSE:JD.) was also among early risers, while banks looked to regain ground after hefty falls on Wednesday on speculation over upcoming budget tax raids.
Barclays PLC (LSE:BARC) climbed 1.2%, while Lloyds Banking Group PLC (LSE:LLOY) and NatWest Group PLC (LSE:NWG) gained 1% and 0.6% respectively.
Overall, the FTSE 100 added 21 points to reach 8,365.
9.50am: 5p fuel duty cut pointless as petrol prices inflated anyway, RAC says
Motor group RAC has said the government should scrap a 5p fuel duty cut in October’s upcoming budget since inflated prices by retailers mean drivers are not feeling any benefit.
Having said petrol prices were 6p higher than they currently should be at pumps on Wednesday, the group suggested there was no longer any point in the cut.
“We’d normally be against any increase in duty,” RAC policy head Simon Williams commented.
“But we’ve long been saying drivers haven’t been benefitting from the current discount due to much higher-than-average retailer margins.”
Fuel duty has been frozen in the UK since 2011, with the former government bringing in a temporary 5p cut in 2022 to last until this coming March.
RAC’s comments follow Keir Starmer’s warnings of a “painful” budget to come earlier this week as the government grapples with a £22 billion “black hole” in public finances.
Chancellor Rachel Reeves “knows the 5p discount is losing the Treasury £2bn a year,” Williams added.
9.11am: Government drops legal defence over Rosebank, Jackdaw development
Legal challenges against development at two North Sea oil fields will not be defended by the government.
Brought by Greenpeace and Uplift, the cases surround development at Rosebank and Jackdaw, which are respectively west of Shetland and east of Aberdeen.
Ministers confirmed on Thursday that the challenges against licences granted under the former government would no longer be contested.
The licences have not been revoked, meaning Equinor and Shell can still face Greenpeace and Uplift’s claims.
“These permits should never have been granted without being properly assessed for their impact on the climate,” Greenpeace UK climate head Mel Evans commented.
“The two new fields combined would generate a vast amount of emissions while doing nothing to lower energy bills. The only real winners from giving them the green light would be multi-billion-pound oil giants.”
This comes after a Supreme Court ruling in June that emissions must be considered in planning applications for new fossil fuel projects, with Rosebank the last remaining major untapped oil field in the UK.
Shell PLC (LSE:SHEL, NYSE:SHEL) dipped 0.5% on Thursday.
8.52am: Gold back above $2,500
Gold held above the US$2,500 mark on Thursday, following a brief drop on Wednesday as traders appeared to reassess the economic picture in the US.
At US$2,516 per ounce on Thursday morning, gold was up 0.4% for the day.
This coincided with a 0.2% drop for the dollar against the pound to 0.7566p.
Gold had dipped as low as US$2,494 on Wednesday, with analysts noting traders were awaiting the latest set of US economic data, including personal consumption expenditures, home sales and another second quarter GDP estimate on Thursday.
Mounting speculation that US interest rates will be cut from September has buoyed gold in recent weeks, with markets now mulling over the depth of such reductions.
8.25am: Little movement across Europe
Though Nvidia’s earnings caused quite a stir across the Atlantic overnight, seeing the chipmaker fall near 7% and plotting the S&5 500 and Nasdaq to fall on Thursday, markets in Europe were little changed.
The FTSE 100 added 11 points in early trading, while Germany’s DAX and France’s CAC were just above the mark.
Premier Inn owner Whitbread PLC (LSE:WTB) led the early risers in London with a 1.7% gain, followed by Centrica PLC (LSE:CNA) and JD Sports Fashion PLC (LSE:JD.).
8.12am: BAT, Imperial Brands slip on reports of wider smoking ban
Britain’s new government is reportedly mulling a wider ban on smoking to include outdoor areas such as pub gardens.
According to The Sun, “secret Whitehall papers” show ministers are considering banning smoking at the likes of outdoor restaurants, sport venues, nightclubs and in small parks.
This would come after Labour laid out plans to resurrect a smoking ban proposed by Rishi Sunak’s former government, which would see the legal smoking age gradually increase.
“We are determined to protect children and non-smokers from the harms of second-hand smoking,” a Department of Health and Social Care spokesperson said.
“We're considering a range of measures to finally make Britain smoke-free.”
British American Tobacco PLC (LSE:BATS) and Imperial Brands PLC (LSE:IMB) fell early on following the news.
8.00am: Speculation builds over budget tax raid
Keir Starmer’s warnings that October’s budget would be “painful” and should see those with the “broadest shoulders” bear the burden has prompted speculation over tax raids.
Fears this could see banks targeted led to the likes of NatWest Group PLC (LSE:NWG), Lloyds Banking Group PLC (LSE:LLOY) and Barclays PLC (LSE:BARC) slipping on Wednesday.
Left-leaning think tank the Institute for Public Policy Research has subsequently called on the government to target the wealthiest with such expected tax hikes.
“We under-tax income from wealth compared to income from work and this special treatment benefits people living in the richest parts of the country like London and the South East,” economist Marcus Johns said.
“This is not just unfair, it’s a handicap on our efforts to rebalance wealth and opportunity between the regions.”
Prime minister Starmer had alluded to tax hikes in the upcoming budget during a speech last Tuesday, noting the government was grappling with a £22 billion “black hole” in public finances.
7.50am: Warren Buffet’s Berkshire Hathaway tops $1trn market value
Warren Buffet’s Berkshire Hathaway became the first non-technology company to hit a US$1 trillion market capitalisation in the US on Wednesday.
Following a 28% rally over the year so far, an initial 1% gain on Wednesday took the conglomerate's share price above US$699,000 to temporarily top the US$1 trillion mark.
“It’s a tribute to Mr. Buffet and his management team, as ‘old economy’ businesses [...] are what built Berkshire,” TD Cowen analyst Andrew Kligerman said.
“Yet, these businesses trade at relatively much lower valuations, versus tech companies which are not a major part of Berkshire’s business mix.”
7.34am: UK car production down for fifth successive month
Data on Thursday showed car production fell in the UK for the fifth month in a row throughout July.
Some 65,478 cars rolled off production lines in July, marking a 14.4% drop on a year earlier, the Society of Motor Manufacturers and Traders (SMMT) reported.
Electrified vehicles made up a smaller share of cars produced too, accounting for 37.5% against 39.5% in July 2023.
SMMT chief executive Mike Hawes said the drop came after “significant growth” last year, adding “volatility is likely as the industry restructures to transition to zero-emission vehicle production”.
“As the billions already committed to new models start to deliver a return, volume growth will resume, providing we seize every opportunity to enhance our global competitiveness.”
Production was up 14.8% for the year so far, with export volumes sitting 14.3% lower.
Total output was said to have remained unchanged at £20 billion over the first seven months of the year.
7.15am: Stocks seen higher
The FTSE 100 was set to tick up on Thursday after a muted day of trading on Wednesday which saw blue chips fall by 1 point.
Futures had the index adding 13 points at Thursday’s open to reach 8,376.
Overnight, all eyes were on Nvidia, with the chipmaker delivering its latest in a string of earnings beats, as expected, but facing a 6.9% drop in post-market trading.
This was as sales more than doubled over the second quarter to US$30 billion and guidance of US32.5 billion was laid out for the third.
Swissquote Bank analyst Ipek Ozkardeskaya noted the share price drop could well have been due to the guidance sitting below the top-end of market forecasts, for almost US$38 billion in third-quarter revenue.
“The shiny results were clouded by the delay of the next-generation Blackwell chip and the rising worries that competition will soon arrive to tap into Nvidia’s monstrous market share,” she said.
Futures had the S&P 500 and Nasdaq falling ahead of the US open later in the day, with Nvidia's drop set to drag down rival tech stocks.