- FTSE 100 up 19 points
- BoE head sees interest rates falling further
- Miners rally on China economic measures
4.04pm: FTSE 100 heads for another gain
London’s blue-chips looked on course for another gain on Tuesday, having climbed by 19 points to 8,279 come the afternoon.
Fuelled by China’s plans to stimulate its economy overnight, miners led the index’s risers, with Anglo American PLC (LSE:AAL) and Antofagasta PLC (LSE:ANTO) both adding over 6%.
Asia-focused insurer Prudential PLC (LSE:PRU) and Standard Chartered PLC (LSE:STAN) also remained among the day’s winners, alongside Glencore PLC (LSE:GLEN) and Rio Tinto PLC.
Smiths Group (LSE:SMIN) was stuck ahead of the day’s biggest losers in the meantime, as a miss on profit expectations in results earlier on sent shares down by 5.9%.
3.55pm: Keir Starmer warns of ‘difficult road ahead’ in Labour conference speech
Prime minister Keir Starmer has warned once again that the UK faces a “difficult road ahead” during his speech at the Labour Party conference in Liverpool.
Having previously alluded to tax hikes ahead in next month’s budget, Starmer said he wanted to reassure those “nervous” over the likes of the government’s cut to winter fuel payments as it tackles a previously slated “black hole” in public finances.
“And if you can't take that on faith [...] then I get that," he said, “as I say, if this path were popular or easy we would have walked it already”.
Starmer also alluded to government plans to hasten the pace of asylum claims and tackle “dependency on net migration,” with the speech also being used to hint the likes of plans to help vulnerable people out of homelessness.
Plans to headquarter new state-backed power company Great British Energy in Aberdeen were also firmed up, following speculation over the move earlier this month.
3.32pm: US consumer confidence dips
Consumer confidence in the States has fallen at its fastest rate in three years this month as fears over job security in the world’s largest economy build.
The Consumer Board’s consumer confidence index came in at 98.7 for September on Tuesday, against August’s upwardly revised reading of 105.6.
This marked the largest decline since August 2021, with metrics covering both future and current labour market and business outlooks falling.
Those aged 35 to 54 reported the largest decline, according to the Conference Board.
“Consumers’ assessments of current business conditions turned negative while views of the current labour market situation softened further,” Conference Board chief economist Dana M. Peterson said.
“Consumers were also more pessimistic about future labour market conditions and less positive about future business conditions and future income.”
2.51pm: Wall Street joins global gains after China economic stimulus plans
Wall Street opened Tuesday in the green, following markets around the world into positive territory after China unveiled a string of measures to buoy its economy overnight.
The Dow Jones and S&P 500 both climbed early on from record closing values seen on Monday, by 76 and 4 points respectively, as the Nasdaq also ticked up by 40 points.
This follows gains across Asian markets overnight, where China’s Shanghai Composite and CSI300 each added over 4%, as well as throughout Europe during the day.
Aimed at lowering borrowing costs and reducing restrictions on lending, the People's Bank of China unveiled short-term interest rate cuts and lower cash reserve requirements overnight in a bid to reinvigorate the world’s second-largest economy.
Such cuts were dubbed positives for global markets, including for the US where Scope Markets analysts said demand should benefit.
In the US, further data on Tuesday promised to add context around to the health of the economy, including from the housing market.
According to the S&P CoreLogic Case-Shiller US National Home Price index, prices climbed by 5% to a record in July, but growth slowed compared to June’s 5.5% rise.
2.19pm: Gold on course to hit US$2,700 as yet another record hit - UBS
Gold prices are on course to rise even further over the coming months after the yellow metal broke yet another record on Tuesday, UBS analysts suggest.
Further easing of US base rates by the Federal Reserve, worsening geopolitical tensions and ongoing demand from central banks should keep driving gold higher.
UBS said gold could climb as high as US$2,700 an ounce by mid-2025 as a result, with the factors having driven the metal to several records this week already.
Gold had climbed to a new high of US$2,642 on Tuesday morning, after breaking its own record twice on Monday, with the rise following the Fed’s 0.5% base interest cut last week.
As of Tuesday afternoon, gold sat at $2,636, having climbed by 0.2% during the day... Read more
1.53pm: UK food supply squeezed by labour shortages, Arla warns
Food supply in the UK is under pressure due to labour shortages in the agriculture sector, the UK’s largest dairy provider Arla has warned.
According to the firm, the end of free movement and a shift in people opting for remote-working roles after the pandemic has hit farmers.
One in 12 responded to a survey by Arla saying they had been forced to cut output due to such shortages, including by reducing herds.
Some 16% also said they would consider stopping farming unless the situation improved, Arla’s survey found.
“Our farmers have told us for some time that they are facing real challenges with the state of the labour market,” Arla UK managing director Bas Padberg commented.
“If we want our farmers to continue to put food on the table in millions of homes around the country they need help.”
Staff shortages have also led to wage inflation across the sector, with farmers found to be paying a third more this year than before the pandemic struck and free movement between Europe and the UK ended as a result of the Brexit referendum.
1.41pm: World stocks at record after China economic package
Global equities have hit a new high on Tuesday after China unveiled a host of measures overnight aimed at reinvigorating the world’s second largest economy.
The MSCI world index climbed 0.3% to hit a new record on Tuesday on the back of the measures, which will see the likes of interest rates and bank’s cash reserve requirements cut.
This followed a jump in Chinese stocks on Tuesday, with the Shanghai Composite and CSI300 index each adding over 4% while markets in Europe also gained.
In London, miners continued to lead the FTSE 100 higher as the Chinese announcements also sent commodity prices upwards, including oil and copper.
Anglo American PLC (LSE:AAL) held its spot as the day’s biggest gainer, having climbed by 6.2%, ahead of Antofagasta PLC (LSE:ANTO) and Asia-focused insurer Prudential PLC (LSE:PRU).
12.57pm: London nearing New York as top financial centre
London is said to be closing the gap to New York as the world’s top financial centre, according to research from thinktank Z/Yen.
New York retained the top spot in Z/Yen’s latest Global Financial Centres index with a rating of 764 points, though London closed the gap by three points since March to score 750.
Stretching over the last 18 months, this gap has been narrowed by 15 points, with New York having overtaken London in the rankings six years ago.
Z/Yen added average ratings across the index, where Hong Kong claimed third place ahead of Singapore and San Francisco, slipped slightly in the latest reading as economies continued to grapple with slow growth and subsiding inflation.
12.41pm: Dow Jones, S&P 500 set to fall after hitting latest records
Wall Street appeared on course for a negative start on Tuesday after Monday saw the Dow Jones and S&P 500 notch up record closing values.
Futures had both indexes slipping slightly on Tuesday’s opening bell, alongside the Nasdaq, following recent gains on the back of last week’s base interest rate cut.
This had seen the Dow Jones and S&P 500 close at record highs of 42,124 and 5,718 respectively on Monday.
A drop would come despite Chinese plans overnight aimed at buoying the world’s second-largest economy, which will see bank’s cash reserve requirements and interest rates cut.
Scope Markets analyst Joshua Mahony noted the move to “flood” liquidity into the Chinese economy could in turn help to boost demand for US goods there.
However, questions remain over the health of the US economy itself, he pointed out, with eyes on Tuesday set to be fixed on the Conference Board’s consumer confidence survey.
“Coming after last month’s five-month high of 103.3, there is an expectation that we will see further improvements that could allay fears over a notable slowdown in domestic consumption,” Mahony added.
“With Friday also bringing fresh personal spending and personal income data, this week should tell us a lot about the financial health of the average US consumer.”
12.23pm: Mortgage rates remain on downward trajectory
Mortgage rates kept falling in recent days after Nationwide Building Society became the latest to ramp up competitive deals among lenders.
As of Tuesday, average two-year fixed rates sat at 5.43%, against Monday’s 5.45%, according to comparison site Moneyfacts.
Five-year fixed rates slipped to 5.09% from 5.12% in the meantime, as lenders kept tussling to attract buyers in spite of last week’s move by the Bank of England to hold base interest.
Nationwide on Monday became the latest to try and tempt new buyers with better offers, lifting its lending limit to six times prospective owners’ salaries in a first for a major bank.
Mortgage Advice Bureau chief executive Ben Thomspon commented that such a move meant “conditions for first-time buyers had improved markedly”... Read more
11.50am: Caution remains over China economic package
Shares in London-listed miners remained inflated by late morning following China's economic stimulus announcements overnight.
Up 7.2%, Anglo American PLC (LSE:AAL) led the likes of Antofagasta PLC (LSE:ANTO), Glencore PLC (LSE:GLEN), Rio Tinto PLC to the top of the FTSE 100's risers, followed by Asia-focused Prudential PLC (LSE:PRU) and Standard Chartered PLC (LSE:STAN).
Aimed at lowering borrowing costs and reducing restrictions on lending, the People's Bank of China said overnight that short-term interest rates and cash reserve requirements would be cut.
Such cuts included an initial 0.5% reduction in reserve requirement ratios for banks, said to equate to US$142 billion (£106 billion), and the likes of lower mortgage costs and minimum down payments on homes.
However, the range of measures were met with caution by some, given demand across China was still seen at a weak point.
Citing conversations with local investors, Citi analysts said there was “very little expectation” for a recovery soon, with the rate cuts rather feeding through next year.
Outlook on iron ore remained cautious, Citi said, and better for copper but worse for battery metals as markets mulled the effect of the measures.
Tickmill Group strategy partner Patrick Munnelly added: “When it comes to flashy bursts of credit-driven stimulus, it feels like we have been here before.
“And yet, China's housing crisis keeps getting worse and equity markets have performed poorly”... Read more
11.14am: Pound continues charge to two and a half-year high
Sterling continued to gain against the dollar on Tuesday following last week’s move by the Bank of England to hold base interest as US policymakers announced a 0.5% cut.
By late morning, the pound was up 0.2% against the greenback at US$1.3379, hitting its highest since early 2022.
The pound also reached a two-year high versus the euro of over €1.20, after data on Monday fuelled fears the German economy was heading for recession.
Expectations are for a more gradual scaling back of interest rates in the UK over the rest of the year compared to the likes of the US, in turn buoying the pound.
10.53am: Budget fears hitting retail sector - analysts
An expected recovery for the UK retail sector has been hampered by growing fears over the upcoming Autumn Budget, Shore Capital analysts have warned.
Following warnings from Britain’s new Labour government over “painful” announcements to come, analysts said consumers were putting off purchases ahead of the Budget next month.
“The damage has been done,” Shore Cap said in a note, citing a seven-point drop in GfK’s consumer confidence reading last month.
“The fright has hit UK consumer confidence amidst still firm labour markets with real living standards rising.”
Prime minister Keir Starmer and chancellor Rachel Reeves have alluded to tax hikes ahead of the statement, which is due on October 30, though these are expected not to cover income and national insurance in line with Labour’s manifesto pledges.
Shore Cap warned of a scaling back in demand for big-ticket items ahead of the Budget as a result, pointing to a report of a 9% downtick at Yorkshire-based non-food retailer Buy-it-Direct in August.
“Time will tell how much Reeves [the government] has deferred purchase decisions by British shoppers rather than cancelled them,” Shore Cap noted.
“But, the mood music is one of considerable frustration for those engaged in the discretionary end of things.”
9.51am: BoE governor sees ‘downward’ path for interest rates
Bank of England governor Andrew Bailey has expressed confidence that interest rates are set to head lower after August’s initial 0.25% cut.
Bailey told the Kent Messenger newspaper on Tuesday that he was “very encouraged” by inflation, after price rises peaked at 11.1% in 2022 but since scaled back to 2.2% in August.
“Inflation has come down a long way,” Bailey commented, “I do think the path for interest rates will be downwards, gradually”.
The central bank had initially cut interest from 5.25% in August but opted to leave the base rate unchanged earlier this month.
Bailey added: “We still have to get [inflation] sustainably at the target and we have quite an unbalanced mix of components of inflation at the moment.”
9.33am: Oil boosted by China stimulus plan
Oil got a boost on Tuesday morning following China’s raft of announcements overnight aimed at stimulating the country’s sluggish economy.
Brent crude ticked up 1.1% to US$74.88 a barrel following the measures, which included the likes of short-term interest rate cuts, scaled-back bank reserve requirements and liquidity support for equities.
According to XTB analyst Kathleen Brooks, eased mortgage rates will equate to US$5.3 trillion, with the support for equities from the People’s Bank worth US$113 billion.
“This has positive ramifications for global markets,” she said.
“It should be good news for commodity producers, stocks with links to the Chinese and Hong Kong property market, and European companies that sell to the Chinese consumer.”
Indeed, shares in London-listed mining companies jumped on Tuesday morning, as Anglo American PLC (LSE:AAL) lead the pack with a 7% gain, while Prudential PLC (LSE:PRU) and Standard Chartered PLC (LSE:STAN) also rose.
“Today’s stimulus package offers a whole range of incentives and sweeteners for lenders and property developers to boost China’s beleaguered property sector,” Brooks added, in turn spelling good news for commodities.
9.15am: Vodafone Italia sale approved in Europe
Vodafone Italia’s takeover by Swisscom has been approved by the European Commission, according to the Swiss telecoms company.
Though the deal still faces regulatory clearances, including from Italy’s competition authority, clearance by the EU marks a step forward for the deal, which was unveiled in March.
Vodafone said at the time this was worth €8 billion (£6.7 billion) and came under plans to right-size its European operations.
According to Swisscom, the deal is now expected to be completed in the early stages of next year.
Vodafone Group PLC (LSE:VOD) climbed 0.3% on Tuesday.
9.04am: Smiths Group (LSE:SMIN) leads fallers after results miss expectations
Smiths Group (LSE:SMIN) PLC fell over 5% after full-year results came in better than last year but still underwhelmed compared to expectations.
Headline operating profit ticked up 5% £526 million, the engineering firm said on Tuesday, while revenue climbed 3% to £3.1 million.
Profit was lower than consensus expectations for £535 million though, with Smiths also unveiling a new cost cutting plan in the results.
This will include a “footprint optimisation review,” according to the company, alongside efforts to improve “organisational effectiveness”.
Chief executive Roland Carter added plans to grow profitability would also see “prioritisation” of research and development, as well as “disciplined” merger and acquisition activity.
Smiths also unveiled acquisitions of US-based Modular Metal Fabricators and Canada's Wattco for £110 million in the results in a bid to grow its international heating business.
Revenue growth of between 4% and 6% was guided for the year ahead, which Smiths said would be coupled with improving margins.
Shares fell 7.3% following the results.
8.42am: Raspberry Pi jumps on maiden results
Raspberry Pi Holdings PLC (LSE:RPI) jumped after reporting what it said were stronger profits than expected in its first results since listing in London.
Underlying profits (EBITDA) of $20.9 million increased 55% from a year ago over the first half, on revenues up 61% to $144 million.
Sales volumes were marginally lower than expected, it said, though sales skewed towards higher margin variants. It noted that the same period a year ago was "supply-constrained"... Read more
Shares climbed 5.4% early on.
8.37am: Miners, Asia-focussed firms rally on Chinese economic measures
Miners and Asian-focussed stocks dragged the FTSE 100 higher early on as investor sentiment appeared to be boosted by a raft of economic measures announced overnight in China.
Anglo American PLC (LSE:AAL) soared 6.2% early on, as Antofagasta PLC (LSE:ANTO) added 5.5% and Glencore PLC (LSE:GLEN) climbed more than 4% alongside Rio Tinto PLC.
Asia-focussed insurer Prudential PLC (LSE:PRU) and Standard Chartered PLC (LSE:STAN) were also among the early risers.
This came after China’s central bank unveiled a string of measures overnight in a bid to reinvigorate the country’s struggling economy.
These included scaled-back requirements on bank reserves, interest rate cuts and a lower minimum down payment ratio for second homes.
“Of itself, the news is unlikely entirely to erase the investor apathy which has plagued the country over recent months,” interactive investor analyst Richard Hunter commented.
“But, [it] is nonetheless a promising sign that the authorities have recognised the need for some sustained and measurable stimulus.”
8.17am: Card Factory (LSE:CARD) slumps as profit hit by wage hikes
Card Factory (LSE:CARD) has reported tumbling profit over the first half of the year on the back of a rise in the UK’s national living wage.
Adjusted pre-tax profit fell by 34% to £14.5 million over the six months to July, Card Factory (LSE:CARD) said on Tuesday.
This was attributed to “substantial increases” in the living wage, which was increased by almost 10% earlier this year to £11.44 an hour for adults, alongside higher freight costs.
Card Factory (LSE:CARD) pointed to plans to boost productivity and efficiency over the rest of the year, adding these would be second-half weighted.
Revenue ticked up 6% to £233.8 million, driven by growth in gift and celebration product sales.
“As we move into the second half of the year and the important Christmas trading period, our expectations for the full year are unchanged and we continue to focus on managing inflationary pressures within the business,” chief executive Darcy Willson-Rymer said.
Net debt also climbed by 4% to £74.9 million, in part due to £15.5 million worth of dividend payments from last year, with a 1.2p per share reward being unveiled for the half year.
Shares slumped 18.9% on the news.
7.59am: Superdry calls out Shein tax 'dodging'
Superdry PLC (LSE:SDRY) boss Julian Dunkerton has slated fast fashion firm Shein Group over a “loophole” allowing it to avoid taxes on parcels sent to customers from overseas.
He argued the UK was “essentially” allowing Shein “to come in and be a tax avoider” in a BBC Radio 4 interview.
Shein is not charged import duties on parcels it sends directly to consumers in the UK, given these are often low-value and do not exceed a £135 threshold.
Dunkerton slated the rules for not covering larger companies though, pointing to those such as Shein with billion-plus-pound turnovers.
“Personally, I would force them into paying import duty, VAT and possibly even an environmental tax,” he said... Read more
7.16am: Stocks seen higher
Futures have the FTSE 100 moving 31 points higher to 8,345 on Tuesday’s open, following a positive start to the week on Monday.
Miners had led the index higher as gold prices set two new record highs throughout Monday, buoyed by last week’s rate cut in the US and tensions in the Middle East as Israel and Lebanon-based Hezbollah continued to exchange blows.
Asian markets saw a mixed performance overnight, with Shanghai climbing nearly 4% after China’s central bank announced further measures to support the country’s struggling economy.
This included cutting the amount of cash banks were required to keep on hand as demand for borrowing lags and follows rate cuts.
Back in the UK, attention on Tuesday turns to updates from Card Factory (LSE:CARD), Raspberry Pi Holdings PLC (LSE:RPI) and Close Brothers Group PLC (LSE:CBG).