- FTSE 100 up 40 points
- ECB cuts rates
- Scottish Mortgage rallies on tech recovery
4.09pm: FTSE 100 to close higher
London’s blue-chip index has come off intraday highs follow the mixed US market open, but it is still set to close steadily in the green.
In the final stretch, the footsie was trading 40 points higher at 8,232, with some of the biggest risers including Fresnillo PLC (LSE:FRES), JD Sports Fashion PLC (LSE:JD.), Sage Group and Diageo PLC (LSE:DGE).
3.34pm: Renotkil thrown to bottom of footsie pile
Rentokil Initial PLC (LSE:RTO) has been tossed to the bottom of the FTSE 100 pile after having its targets cut by Deutsche Bank analysts after warning over sluggish sales in North America.
Analysts said the pest controller’s pre-tax profit was now expected to sit at £691 million for the year, 11% lower than previously thought.
This followed the company’s warning that sales across the Atlantic had lagged in recent months, while £50 million worth of extra costs had also been incurred
Shares are currently down 4% to 364.8p.
3.28pm: Moderna shares tank after announcing $1.1bn cost-cutting measures
US pharmaceuticals giant Moderna Inc (NASDAQ:MRNA, ETR:0QF) shares tanked more than 17% on Thursday after announcing a $1.2 billion cost-cutting plan in its research and development department.
Moderna successfully commercialised its Covid-19 vaccine at the height of the pandemic leading to an all-time high valuation in September 2021.
But its star has fallen off considerably since then amid plummeting demand for the vaccine.
The company slashed its full-year sales forecast for respiratory vaccines by up to $1 billion in August.
Now the group is hoping to bring R&D expenses down from $4.8 billion today to between $3.6 and 3.8 billion in 2027.
Now valued at around $25.2 billion, Moderna is worth just 15% of what it was at its heady pandemic-era heights.
2.55am: US stocks wobble
US markets opened flat today despite pre-market trades pointing to a relatively well-bid opening session.
The Nasdaq 100 tech index fell 0.2% to 19,202 while the Dow Jones Industrial Average dipped 0.15% to 40,804. The broader S&P 500 index also opened 0.2% lower a 5,541.
Moderna Inc (NASDAQ:MRNA, ETR:0QF) is dragging the market down with a brutal 17% fall after announcing jumbo $1.1 billion cost-saving plan.
This follows a rapid decline in its Covid-19 vaccine business.
Warner Bros Discovery Inc (NASDAQ:WBD, ETR:J5A) led the US risers with a 4% gain.
Back in London, the FTSE 100
2.37am: US labour market softens
US employers cut 75,891 jobs in August, marking the highest total in five months and the largest for August since 2009, excluding the pandemic disruptions of 2020.
The data reflects growing signs of a softening US labour market, aligning with other recent key economic releases.
The job cuts were particularly pronounced in the tech sector, where 39,563 positions were eliminated.
“August’s surge in job cuts reflects growing economic uncertainty and shifting market dynamics,” said Andrew Challenger, senior vice president of Challenger, Gray & Christmas.
The data could galvanise the dovish faction of the Federal Reserve, which is gunning for a 50-basis-point interest rate cut later this month instead of a more-likely 25-basis-point cut.
1.38pm: ECB cuts rates
As expected, the European Central Bank has cut interest rate by 25 basis points for the second consecutive month, bringing the base rate down to 3.5% for the first time since April 2023.
Policymakers made the decision following a steady fall in inflation across the block.
At the latest reading in August, eurozone inflation fell to 2.2%, just 20 basis points above the ECB’s long-term target of a flat 2%.
1.29pm: Nasdaq, Wall Street to open higher
US stocks are expected to make further gains when markets open today, following an exceptionally strong session on Wednesday.
Technology stocks including Nvidia Corp and Apple are expected to contribute to a 0.3% gain on the Nasdaq 100, while the Dow Jones Industrial Average is tipped to open 0.27% up.
Futures on the broader S&P 500 index have it opening 0.23% higher.
All eyes will be on the raft of employment data soon to be released and what the figures could mean for the Federal Reserve’s interest rate call later this month.
On the earnings front, Adobe Inc (NASDAQ:ADBE) is expected to deliver its third-quarter results.
Back in London, the FTSE 100 continues to trade in the green and is currently up 69 points to 8,263.
1.20pm: Lloyd’s of London looking to overhaul misconduct framework
Insurance market Lloyd’s of London has launched a consultation aimed at overhauling its framework for dealing with financial and non-financial misconduct.
In focus is Lloyd’s handling of dishonesty, harassment, discrimination and business misconduct.
Lloyd’s, which acts as a marketplace for the City of London’s largest insurers including Beazley and Hiscox, admitted that its guidelines are unclear.
“Our current processes for dealing with issues of poor conduct can be unclear and may cut across firms’ own intervention processes. There also needs to be greater certainty as to potential outcomes,” said Lloyd’s.
Lloyd’s is taking consultation responses until 16 December.
12.33pm: European interest rate decision approaches
The European Central Bank is preparing to announce its latest interest rate call, with markets anticipating the second 25-basis-point cut for the year.
If these forecasts are matched, it would bring the bloc’s bank rate down to 3.5% for the first time since April 2023.
The anticipated cut in lending rates follows a protracted fight to bring inflation down across the continent.
In August, the eurozone’s annual inflation rate fell to 2.2% from 2.6% in the earlier month, representing the softest increase in consumer prices since July 2021.
12.14pm: Rental pressures show no let up
Renters now spend 28.8% of the income on rent, up from 26.6% a year earlier and from 25% five years ago.
The data suggests that the squeeze on renters is not going anywhere and the proportion of their income going to landlords is rising at the fastest rate in five years.
Sarah Coles, head of personal finance at Hargreaves Lansdown, said of the data: “The white heat of the cost-of-living crisis may have cooled for an awful lot of people, but renters are still getting burned.
“And as more people further up the income ladder loosen the purse strings, they’re missing some vital bills. These weaknesses in people’s finances could come back to bite them.
Coles warned that rent pressures will persist as landlords are continue to sell up housing stock amid concerns about higher costs from more regulation and bigger mortgage payments.
On the bright side, mortgage rates are slowly coming down at the Bank of England takes its first steps to reduce interest rates.
11.57am: IG Group at an all-time high
Online trading platform IG Group Holdings Plc (LSE:IGG) has hit an all-time high share price of 970p following a first-quarter trading update.
The FTSE 250-listed company achieved quarterly revenues of £278.9 million on a 15% year-on-year.
This is despite on-platform customer numbers falling by 1% year on year to 263,200.
IG Group specialises in the trading of over-the-counter (OTC) derivative products, which allow retail investors to speculate of price movements of securities without engaging in the formal stock exchange.
The company put its strong first-quarter performance down in “elevated volatility” in the market.
IG Group is currently valued at £3.51 billion.
11.11am: Tesco loses ‘fire and rehire’ case in Supreme Court
Tesco PLC (LSE:TSCO) has lost a legal case in the UK’s Supreme Court over laying off staff at certain distribution centres and then rehiring them on lower pay.
Five justices unanimously agreed Tesco should be blocked from the practice on Thursday, following a legal case from the Union of Shop Distributive and Allied Workers.
This came after Tesco moved to end its ‘retained pay’ scheme in 2021, which had previously offered workers higher wages to relocate from closing distribution centres.
Staff instead were to be offered either a lump sum or see their contracts terminated and then re-offered on the previous terms without the higher pay.
The union had taken legal action against Tesco over the move, which it said violated workers' contract terms, and won the case in the High Court in 2022.
Tesco subsequently successfully appealed the decision, leading the case to the Supreme Court.
Thursday’s judgement from the five justices read: "The employment contracts contained a term implied by fact with the effect that the employer’s right to terminate could not be exercised for the purpose of depriving the employees of their right to retained pay."
10.48am: OBR warns UK public debt on ‘unsustainable’ path
Britain’s public debt is at risk of becoming “unsustainable,” the Office for Budget Responsibility has warned.
The country’s ageing population and climate change-related costs are set to contribute to a surge in the ratio of public debt to gross domestic product, the watchdog said on Thursday.
This is projected to see the ratio rise from less than 100% currently to 274% over the next 50 years.
Public spending is set to climb from 45% to over 60% of GDP in the meantime, as revenues remain at roughly 40%.
10.04am: Why is Scottish Mortgage up?
Scottish Mortgage Investment Trust PLC (LSE:SMT) has added more than 3% to its share price following a bullish session in the US tech sector.
Nvidia Corp, which is Scottish Mortgage’s largest holding (comprising 6.8% of its total portfolio) closed 8% higher on the Nasdaq 100 index on Wednesday, marking the end to a bearish period for the superstar chipmaker.
Nvidia shares have been out of favour following its second-quarter earnings in early September.
While the Silicon Valley giant and primary Wall Street play on the artificial intelligence sector beat revenue expectations, concerns were raised about the trajectory of its AI chip sales.
This led to a record $270 billion being wiped from Nvidia’s valuation.
But Nvidia shares staged a bumper recovery yesterday, sending shares surging over 8%. In turn, Scottish Mortgage, being one of Britain’s foremost investors in the group, shared in the positive sentiment.
Scottish Mortgage is a prominent tech investor, with major holdings in Amazon.com Inc (NASDAQ:AMZN), Tesla Inc (NASDAQ:TSLA) and a raft of unlisted companies including Elon Musk’s SpaceX.
This makes the FTSE 100 investment trust susceptible to market shifts in the US tech sector.
At the time of writing, Scottish Mortgage shares were swapping for 819.19p with a market capitalisation of £10.6 billion.
9.30am: The age of high streets is over, the time of retail parks has come?
An average of 38 stores have closed on Britain’s high streets every day 2024, with 6,945 outlets shutting by mid-year, according to the latest PwC data.
That makes for 13 closures per day, or 2,284 by mid-year, on a net basis, given the rate of 25 new store openings per day.
Though the statistic sounds worrying at face value, it shows a degree of relative stability, as net closures have ticked along at between 11 and 12 outlets per day over the past three years.
Declining high-street footfall in favour of online shopping in the post-pandemic environment has driven these closures, but there is one evident bright spot for the brick and mortars.
Retail park footfall has outpaced the high street, thanks to their convenience, accessibility and abundance of free parking.
This has made them a saviour in times of widespread transport strikes and harsher driving restrictions in town centres.
The pivot to retail parks is also changing their disposition.
“Operators are continuing to move out of high streets in favour of retail parks,” noted PwC. “Carefully curated shopping centres are pivoting to different uses, such as leisure, entertainment and hospitality, in order to fill the voids left by pandemic-era closures.
Unfortunately the hospitality sector has struggled to keep up with the changing trends, with ‘pubs and bars’ the second-fastest declining outlet type, behind ‘chemists’ but in front of ‘banks and financial services’.
Commenting on the data, Lisa Hooker, PwC UK’s leader for industry for consumer markets said: “It’s clear that online retail is here to stay, outpacing physical stores annually.
“As more brands invest in data and really understand their customer, new space increasingly seeks to meet customer trends for convenience, ease of access and fun, creating spaces that feel exciting for consumers to step into.”
“All stakeholders, including policymakers, landlords and communities, have a role to play.
“While some consumer touch points, like grabbing a last minute present or a coffee can’t be replaced online, the high street will need to continue to evolve for a tech-savvy generation with new living, working and playing habits.”
8.53am: The morning so far
The FTSE 100 turned up the dial this morning, rallying over 90 points to hit a weekly high of 8,288.
Almost every constituent of the blue-chip index is currently in the green, including Scottish Mortgage Investment Trust PLC (LSE:SMT), which has added around 3.2% in the opening hour.
Scottish Mortgage, which is primarily invested in large US technology stocks, is benefitting from a bullish Wednesday session for the Nasdaq 100 tech index in the US.
Other top risers among the FTSE 100 set include JD Sports Fashion PLC (LSE:JD.), Antofagasta plc, Glencore PLC (LSE:GLEN), Diageo PLC (LSE:DGE) and Vistry Group PLC (LSE:VTY).
Vestry is well bid following a much-better-than-expected RICS house price balance survey, which turned positive for the first time since October 2022, with a reading of +1% in August.
This marks a significant improvement from the -18% recorded in July and thoroughly exceeds market expectations, which had forecast a modest improvement to -14%.
John Lewis Partnership said its losses narrowed significantly in the first half of 2024, suggesting its multi-year transformation plan could be paying off.
It comes as the high-end department prepares to bring back its ‘never knowingly undersold’ pledge just two years after ditching it after branding it “not fit for purpose”.
Among the FTSE 250 set, Trainline has shot out in front with an 11% gain following a better-than-expected first half of its 2025 financial year.
Trainline’s total revenue surged 17% to £229 million, beating prior forecasts of 16% growth.
8.25am Stocks rally
The FTSE 100 is making headway in opening trades, with London’s premier index surging 86 points to 8,280.
Scottish Mortgage Investment Trust PLC (LSE:SMT) has added more than 3% following a bullish session in the US tech sector (where the trust is primarily invested in).
Scottish Mortgage’s largest holding Nvidia Corp closed 8% higher while Amazon.com Inc (NASDAQ:AMZN), another major holding, added 2.8%.
Other top footsie risers include Vistry Group PLC (LSE:VTY), which bounced 2.5% higher in opening trades, and Antofagasta plc, which is up over 3%.
8.10am: John Lewis’ losses narrow sharply
John Lewis Partnership’s losses narrowed significantly in the first half of 2024, suggesting its multi-year transformation plan could be paying off.
It comes as the high-end department prepares to bring back it's ‘never knowingly undersold’ pledge just two years after ditching it after branding it “not fit for purpose”.
Losses before tax and exceptional items fell 91%, from £57 million last year to just £5 million. Operating profit margins increased by 1.2 percentage points.
The partnership has cut thousands of jobs this year in an effort to reduce expenses.
Looking ahead, John Lewis said it expects to achieve significantly higher profits for the full year, with confidence that pre-exceptional profits will exceed last year’s £42 million.
7.50am: Trainline beats revenue expectations despite UK transport strikes
Trainline PLC (LSE:TRN) had a better-than-expected first half of its 2025 financial year, with total revenue surging 17% to £229 million, beating prior forecasts of 16% growth.
Net ticket sales rose by 14% to £3 billion.
These results, however, were below the rate of growth seen in the same period last year, when revenue increased by 19% and net ticket sales increased by 23%.
Trainline showed particularly strong growth in Spain and Italy in the past six months, where combined net ticket sales increased by 23% year-on-year.
This was attributed to the company’s successful positioning in these markets, where digital ticketing adoption is widespread.
In Spain, the company saw particularly strong results, tripling net ticket sales over the past year and attracting over one million customers in the last 12 months alone.
Net ticket sales in the UK, where Trainline is contending with widespread strikes and an expansion of Transport for London’s contactless travel zone expansion, rose 15% to £2 billion.
Jody Ford, chief executive of Trainline, said: "As Europe's number one rail app, our strong performance shows how our relentless focus on innovation is helping customers choose digital ticketing.
“Competition between rail carriers is growing across Europe and as the aggregator of choice, we are providing the value and convenience customers want.”
7.20am: RICS house price balance surprises to upside
The latest Royal Institution of Chartered Surveyors (RICS) house price balance survey shows that the UK house price balance turned positive for the first time since October 2022, with a reading of +1% in August.
This marks a significant improvement from the -18% recorded in July and thoroughly exceeds market expectations, which had forecast a modest improvement to -14%.
RICS’ house price balance measures the difference between the percentage of survey respondents reporting rising house prices and those seeing declines.
It provides a broad view of current market conditions and sentiment across different regions of the UK.
While most regions of the UK reported stable or slightly positive house price trends, certain areas, such as Wales, the South East, and the South West of England, continue to experience weaker growth compared to the national average.
In contrast, house prices in Northern Ireland and Scotland are rising firmly, according to the survey's findings.
7.06am: Footsie to surge
Pre-market futures have the FTSE 100 index soaring up to 100 points 8,291 when trading commences today.
This follows a ropey Wednesday trading session when the blue-chip index closed a little over 10 points power, despite towing the line for the bulk of the day.
A latter-day dip sent the footsie into the red in response to a mixed opening in the US.
It ended up being a resoundingly positive session for US stocks though, with the Nasdaq closing more than 2% higher and the broader S&P 500 over a percentage point higher.
UK housebuilding shares could be in for a decent session following a surprisingly strong RICS UK Residential Market Survey result.
The survey, which measures the gap between the percentage of respondents seeing rises and falls in house prices, climbed to +1% in August 2024 from -18% in July, turning positive for the first time since October 2022.
It trounced expectations of a -14% result.
On the company news front, Trainline PLC (LSE:TRN) and trading platform IG Group will soon have their trading updates out.