- FTSE 100 falls 16 points to 8,360
- Rightmove surges as Aussie-listed REA considers offer
- Miners hit by China data, defence companies slide on spending concerns
4pm: FTSE on its own in the red
As the first trading day of September winds down, the FTSE 100 is the only one of the major European markets still on the back foot.
The London index is 16 points adrift, down 0.2%, today, while its continental peers have all climbed onto dry land.
France's CAC 40 is up 0.2% and Germany's DAX has gained 0.1%, while Spain's IBEX is just above flat and Italy's FTSE MIB is fluctuating around the flatline.
The Euro Stoxx 600 is just in the red, while the Euro Stoxx 50 is up 0.3%.
3.40pm: What tomorrow brings
As we sail towards the end of the session, thoughts turn to tomorrow, which should see more volatility and volume as US traders return from their long weekend.
In terms of UK corporate results, equipment hire specialist Ashtead Group, upmarket retailer Watches of Switzerland and packaging group DS Smith are among the bigger names.
In macroeconomic data, there will be UK retail sales from the ONS, plus two US PMI manufacturing surveys from S&P Global and ISM, plus the ISM prices paid report and US automotive sales.
3.31pm: HPE to pursue claim against Mike Lynch's widow
Hewlett Packard Enterprises says it plans to continue legal proceedings to seek up to $4 billion in damages, which means it will be looking to claim the funds from the widow of Mike Lynch, as the billionaire (and his daughter) died after the Bayesian yacht sank off the coast of Sicily last month.
The claim relates to a civil claim of fraud over the US tech giant's $11 billion takeover of Lynch's then London-listed software company Autonomy in 2011, with former finance director Sushovan Hussain a co-defendant.
Although Lynch was acquitted in a related criminal fraud trial in the US earlier this summer, the US tech giant won a UK High Court civil claim against Lynch in 2022.
In a statement, HPE says: “In 2022, an English High Court judge ruled that HPE had substantially succeeded in its civil fraud claims against Dr Lynch and Mr Hussain.
“A damages hearing was held in February 2024 and the judge’s decision regarding damages due to HPE will arrive in due course.
“It is HPE’s intention to follow the proceedings through to their conclusion.”
3.06pm: Rolls and BAE falls hit FTSE
Defence companies are adding to the drag on the FTSE 100 and 250 this afternoon amid concerns about UK defence spending.
Rolls-Royce Holdings PLC (LSE:RR.) is down 5%, QinetiQ Group PLC (LSE:QQ.) is down around 3%, BAE Systems PLC (LSE:BA.) 2.8% and Babcock International PLC (LSE:BAB) 2.2% Monday.
This followed reports in weekend newspapers about apparent belief among defence officials that Chancellor Rachel Reeves' autumn statement could see funding for various Ministry of Defence projects cut.
Despite increasing pressure to up spending to 2.5% of GDP, UK defence sources told the Times that there was "no sign" Labour would announce extra money for the armed forces "any time soon".
2.41pm: CEO calls for better pay for CEOs
In the latest in the long-running theme, a blue-chip company boss has that said people like him deserve to be well paid.
This time it's LSEG CEO David Schwimmer, who has warned the City of London risks losing its spot as a leading financial centre if firms do not up executives' salaries.
Having seen his own salary double to £13.1 million earlier this year, the chief executive weighed into a debate around executives’ pay in an interview over the weekend.
“If the UK wants to be a global centre for capital, and a centre for globally competitive companies, then compensation for executives in those companies needs to be globally competitive,” he told Financial News.
2.15pm: Banking issues resolved
Issues with digital banking at Lloyds Banking Group, Virgin Money and Nationwide seem to be resolved.
Lloyds shares are down 0.4%, while most of the sector's shares are close to flat or just below.
1.50pm: Microsoft's Azure in firing line again
Lloyds and Virgin Money have apologised after online banking services were hit by a technical issue with Microsoft's Azure cloud service (see below) while Nationwide is maintaining that its services were mostly working fine.
Over 650 customers were hit by outages at Lloyds, according to the tracking website Downdetector, which also showed over 400 Virgin Money and 100 Nationwide customers had complained too.
Microsoft issued a statement today saying: "We are investigating reports of customers having issues accessing the Azure portal in UK regions. More details will be provided as they become available."
A Lloyds spokesman said: “We know some of our customers are having issues viewing their recent transactions and our app may be running slower than usual. We’re sorry about this and we’re working to have everything back to normal soon."
A Nationwide spokesman said the lender was “aware of a third-party issue that is impacting a number of organisations”.
Virgin Money posted on X to say it was "aware that some customers are having issues with our mobile banking app and internet banking service this morning with customers not being able to view their transactions".
12.52pm: Lloyds and Nationwide apps down
Digital banking for customers of Lloyds Bank Group PLC and Nationwide has been down for hundreds of customers on Monday, following problems with NatWest at the end of last week.
The Downdetector website said it was "possibly related to issues at Microsoft Azure", as complaints from Lloyds customers topped 600 from 9am onwards.
Customers for both Lloyds and Nationwide reported that they were unable to move money between accounts and said transactions were not able to access the app.
We know some of our customers are having issues viewing their recent transactions. We're sorry about this and we're working to have everything back to normal soon.
— Lloyds Bank (@LloydsBank) September 2, 2024
12.10pm: Markets in holding pattern
Just after midday and the FTSE 100 is still slightly in the red, along with other European stock markets. A reminder that US markets are, along with Canada, closed today for the Labo(u)r Day national holiday.
The London index's 0.1% decline is the least bad of the major benchmarks across the continent.
Fallers on the FTSE are led by Burberry Group PLC (LSE:BRBY), due to its heavy reliance on sales in Asia after some disappointing China data earlier, which also dragged on shares for the mining sector giants.
Retailers B&M, Kingfisher, JD Sport and Primark owner AB Foods are also in the red.
Top of the leaderboard is Rightmove PLC (LSE:RMV), up 22% now after Aussie peer REA Group said it is considering a possible offer.
Barratt Developments PLC (LSE:BDEV) is up 2% after UBS upgraded its stance on the shares to 'buy' from 'neutral', adjusting the price target to 630p from 6.10p.
11.55am: UK REITs look attractive, says Morgan Stanley (NYSE:MS)
Morgan Stanley (NYSE:MS) is liking the look of UK real estate stocks as confidence returns to a sector where "balance sheets are healthy and assets have been marked down".
Analysts at the investment bank upgraded their stance on the wider European property sector and said they were now "unequivocally bullish" on UK real estate investment trusts.
This follows a "lost decade" for UK property, which struggled in the face of falling values due to pandemic shifts and a weak post-Brexit economy, with higher interest rates also piling pressure on many debt-laden companies.
After last month saw the Bank of England make its first interest rate-cut since the pandemic, the Morgan Stanley (NYSE:MS) team pointed to signs that UK REITs may be entering the next cycle: equity fundraises, dealmaking and improving operational performance.
11.41am: Look back at surge pricing in anger?
The forthcoming Oasis reunion tour could be part of a government investigation into ticket prices.
Authorised vendor Ticketmaster has been using ‘surge pricing’ to raise prices off the back of the huge demand from old fans and younger followers.
Ticketmaster, which has used dynamic pricing for the past couple of years, has been on the receiving end of much ire from Oasis fans as prices jumped from an original estimate of £150 to more than £300, prompting the government to threaten action.
Culture secretary Lisa Nandy said in a statement last night said it was "depressing to see vastly inflated prices excluding ordinary fans from having a chance of enjoying their favourite band live".
She added: "We will including issues around the transparency and use of dynamic pricing, including the technology around queuing systems which incentivise it, in our forthcoming consultation on consumer protections for ticket resales."
11.24am: NatWest, Barclays and HSBC cut mortgage rates
Both NatWest Group PLC (LSE:NWG) and Barclays PLC (LSE:BARC) have announced cuts to mortgage rates this morning. HSBC Holdings PLC has also this morning announced it is reducing across the board, although the rates won't be published until tomorrow.
"It's only the first working day of the month but lenders are firing on all cylinders," says Craig Fish, director at Lodestone Mortgages & Protection, adding that "more lenders are likely to follow".
Rohit Kohli, director at The Mortgage Stop, noted that Barclays made further reductions to their rates, especially in the 85% loan-to-value bracket.
"The mood among lenders is clearly that these levels of rates are here to stay for a while longer and, as long as there are no shocks with inflation next week, then borrowers should act quickly. These ongoing cuts are quickly turning things into a sellers' market and prices could start to edge up quickly," he says.
10.57am: Manufacturing data thoughts
While the UK manufacturing PMI was in positive territory for the fourth consecutive month in August, the significant divergence between official data from this survey over the past couple of years "means it's difficult to determine the importance of the recent upturn in the survey's results", says Peter Arnold, chief economist at EY UK.
Official data from the Office for National Statistics has had the manufacturing sector comfortably outperformed the wider economy since the start of 2023, while the S&P Global PMI survey suggests the sector was in recession in 2023 and that conditions have only started to improve recently, he notes.
What does it mean for the Bank of England ahead of its next meeting on 19 September?
"The more dovish members of the Monetary Policy Committee (MPC) have cited the offsetting impact of soft goods price inflation as a reason to be less concerned about the strength of services inflation.
"As with output, the relationship between the official data and S&P Global survey results has been weak, but the doves will likely welcome evidence that goods price inflation is still softening," says Arnold, adding that the EY ITEM Club expects the MPC to continue to gradually cut rates by a quarter of a percentage point a quarter.
10.40am: UK business confidence returns
Confidence among UK private sector firms returned, according to the CBI's growth indicator report, though activity is only expected to rise modestly in the three months to November.
The growth indicator gave a weighted balance of +9% for the September reading, rebounding from the decline in activity over the three months to August -8% and the -14% in the three months to July.
Business & professional services activity, along with manufacturing, are expected to offset a small decline in consumer services and retail activity.
CBI economist Alpesh Paleja said: “It’s encouraging that business’ expectations for growth remain positive, which suggests that the recent momentum in economic growth has been sustained into the second half of this year.
"But our surveys paint a very mixed picture across sectors – it’s notable that consumer-facing businesses are still struggling, and that momentum in manufacturing remains tepid at best."
He said firms will want to see new policies from the government that "can help turn a mixed outlook into a far more positive outcome for all sectors for the rest of the year" either by reducing costs via business rates reform or a business tax roadmap to attract investment.
10.06am: European markets all in red
The FTSE 100 far from the only European stock market benchmark in the red this morning, in fact that is the wider trend.
While the London index is down less than 0.1%, similar to Madrid's IBEX 35, though the DAX in Frankfurt has lost 0.2% and the CAC 40 in Paris is 0.35% lower.
The Euro Stoxx 500 is down 0.34%, with Rightmove the top risers and video games maker Ubisoft the big faller, down 5.5% as investors worry about the coming Friday launch of its Star Wars Outlaws game.
"European markets are trading lower as investors favour the narrative of taking some chips off the table after the decent rally that we saw for the European indices last week," says market analyst Naeem Aslam at Zaye Capital Markets.
"The fundamentals continue to support the sentiment that the inflation situation is very much under control, and the current actions taken by the European Central Bank very much warrant them to continue the process of cutting interest rates.
"Following the latest inflation data, many traders now hold the belief that the European Central Bank is likely to initiate another interest rate cut, although the exact timing of this event remains uncertain. However, traders find solace in the fact that the ECB is reducing interest rates, signalling the end of the period of higher interest rates."
9.43am: UK manufacturing exports a cause for concern
Manufacturing industries remained a positive contributor to broader economic growth in August, says Rob Dobson, director at S&P Global Market Intelligence, with PMI index hitting a 26-month high based on solid expansions in output and new orders and the strongest jobs growth for over two years.
The trend of lower export orders is "a key cause for concern", he says, with new business from overseas having fallen continuously since early in 2022.
"UK manufacturers are experiencing difficulties in securing new contract wins overseas due to weaker demand from Europe, a slowdown in mainland China, freight delays, competitiveness issues, high shipping costs, global conflicts and political uncertainty.
"Many of these issues are also impeding imports which, while benefiting domestic suppliers, is causing supply chain-related production constraints as witnessed by a further marked lengthening of supplier delivery times."
Although S&P said input costs and selling prices both slowed, Dobson says these supply constraints and higher shipping costs "drove up input prices for manufacturers, which rose sharply again in August by recent standards".
9.43am: European manufacturing PMIs mostly bad
Earlier, the euro-zone manufacturing PMI was revised up to hold steady in August at 45.8, which meant it was 0.2 points above the consensus and estimate of 45.6.
For the second month in a row, Italy's manufacturing PMI rose but fell everywhere else.
The French manufacturing headline was revised up to 43.9, but this still left it below July’s 44.0; Germany’s PMI was revised up to 42.4, though this was still a five-month low; Spain's index slid to 50.5 from 51.0.
"The detail isn’t pretty," says Melanie Debono, senior Europe economist at Pantheon Macroeconomics.
"New orders fell again in August, at the fastest pace this year. Firms again turned to running down work backlogs which dwindled at the fastest pace since February, and purchasing activity continued to shrink."
Meanwhile, costs are rising, she added, with manufacturing firms reporting another increase in prices of inputs, close to July’s year-and-a-half high.
"In response, firms raised selling prices for the first time since April last year. This is an upside risk to our core goods inflation forecasts. We see core goods inflation rising for the rest of the year, assuming month-to-month pricing settles at its six-year average, pulling the headline up in Q4."
9.36am: UK manufacturing PMI in line with expectations
Things were more positive in the UK manufacturing sector last month, according to the S&P Global manufacturing purchasing managers' index (PMI) survey for August, which rose to a 26-month high, as expected.
The index printed at a level of 52.5, up from 52.1 in July and the same as the flash reading midway through the month. A reading above 50 points to growth.
Manufacturing output, new orders and employment all rose in the month, S&P said, with August seeing new business rise for the fourth month in a row and reports of a move away from destocking at clients, which contributed to higher intakes of new work.
Domestic orders were the main spur of new contract wins, as new export orders decreased for the thirty-first consecutive month.
As for inflation, price pressures eased further, with rates of input costs and selling prices both slowing.
9.23am: FTSE inches up
The FTSE 100 has broken into positive territory, led by Rightmove's near 20% gain and with a few related companies carried higher in its wake.
Fellow classified sector name Auto Trader is up 1.1%, while housebuilder Barratt Developments PLC (LSE:BDEV) is up ahead of its results later this week.
Oil giants Shell and BP are both in green too, giving the index a lift.
8.47am: Rightmove situation "could get messy"
Reacting to the 20% jump in Rightmove shares this morning, analyst Sean Kealy at Panmure Liberum says Rightmove has not been approached by REA, "and the leak looks to have forced this into the open before much progress had been made at all.
"This could create a messy situation", he says, given short-selling of Rightmove shares and REA's statement that the offer would be partially in shares, "meaning we'd expect a large equity placing to fund any cash component too".
Jessica Pok at Peel Hunt notes that REA Group is Australia’s largest property listing company and the pair are the "most closely compared property portals, given the similarities of the UK and Australian property markets"
The company has until the end of September to make a formal offer, she points out.
8.24am: FTSE 250 also in the red
The FTSE 250 has also started September with a red-inker, down 0.36% while its blue-chip sibling is down 0.22%.
Leading the fallers on the mid-cap index is IT provider Kainos Group PLC (LSE:KNOS).
It says for its current financial year to March 2025, directors expected profit to be in line with current market forecasts, but with only a "small increase" in group revenues due to a tougher trading environment for services, which will be below current forecasts.
8.11am: FTSE starts in the red
The FTSE 100 has started in the red, defying the bullish predictions of the futures market, with a small fall in the opening minutes of trading.
So far, the index has dipped three points to just over 8,373.
This is despite a 24% surge for Rightmove PLC (LSE:RMV), after Australian peer REA Group said it was "considering a possible cash and share offer".
Miners are dragging the index down, however, following disappointing China manufacturing data earlier. Antofagasta, Anglo American and Rio Tinto are all down at least 1.4%.
7.42am: A move for Rightmove?
Rightmove PLC (LSE:RMV) shares will be in focus this morning, with Australian-listed REA Group Limited (ASX:REA) confirming that it is considering a possible cash-and-shares offer for the UK residential property platform.
REA said in a stock market statement that it has not approached, nor had any discussions with Rightmove about this yet though.
Its board stated its belief that there are "clear similarities between REA and Rightmove" in terms of their core residential property business.
"REA sees a transformational opportunity to apply its globally leading capabilities and expertise to enhance customer and consumer value across the combined portfolio and to create a global and diversified digital property company, with number 1 positions in Australia and the UK."
7.31am: Big week and month for stock markets
Market analyst Katheleen Brooks at XTB says September is "an important month", though it has historically been bad for stock market returns.
A lot hinges on China and the US jobs market, with the former down this morning after disappointing manufacturing data, and the latter focused on the non-farm payrolls report at the end of the week.
This could also be "the most important week for stock markets so far this year", Brooks adds, with the performance of Nvidia, the best performing stock on the S&P 500 so far this year, but down more than 7% last week.
"There are also broader problems for the AI sector brewing, which are eroding market confidence," says Brooks, pointing to concerns that AMD processors are not selling as well as the market had expected, plus Hindenburg Research claiming there is evidence of accounting manipulation at Super Micro Computer.
7.20am: FTSE to start September higher
The FTSE 100 is set to open higher on Monday, the first trading day of September, playing catch-up after a strong finish on Wall Street last week.
Futures markets have London's blue-chip shares adding around 27 points at the open, adding to a 1% gain in the past week and 2.5% for the past month, though the index finished with a bit of a whimper on Friday.
However, US stocks made a late rally, with the S&P 500 and Nasdaq climbing strongly to both finish over 1% higher on the day.
US stock markets are closed today for the Labour Day holiday, though.
This week sees economic data come thick and fast, with today bringing manufacturing numbers in the form of the purchasing manager index (MPI) survey.