- FTSE 100 down 25 points
- UK growth forecast lifted
- Petrol price at three-year low
16.02pm: FTSE 100 set for poor finish
London’s blue chips looked on course to close out Wednesday’s trading off the mark, having fallen 25 points to 8,257 come late trading.
Heavyweights BP PLC (LSE:BP.) and Shell PLC (LSE:SHEL, NYSE:SHEL) were among those weighing down the index late on the day, as the oil firms dipped 2.5% and 1.6% respectively.
This followed a drop in oil prices throughout the day, which Spartan Capital analyst Peter Cardillo noted reflected an “expected” pause after consecutive daily gains.
Prudential PLC (LSE:PRU) topped the FTSE 100’s fallers in the meantime as the Asia-focussed insurer reversed on Tuesday’s gains after China unveiled a string of measures aimed at buoying its struggling economy.
Among risers, Rentokil Initial PLC (LSE:RTO) continued to lead the pack late on after announcing Brian Baldwin of activist investor Nelson Peltz's Trian Fund Management would join its board, while miners Fresnillo PLC (LSE:FRES) and Endeavour Mining PLC (LSE:EDV, TSX:EDV, OTCQX:EDVMF) also climbed.
3.48pm: Abrdn in talks to sell property trust
Abrdn PLC (LSE:ABDN) is in talks to sell its property trust to US hedge fund GoldenTree Asset Management.
The ongoing discussions were confirmed on Wednesday, with the potential deal set to see GoldenTree snap up the UK asset manager’s Abrdn Property Holdings business.
“Any sale would involve the disposal of the company’s entire investment property portfolio, with the exception of its interest in the land at Far Ralia,” Adbrdn said.
Shares in the UK firm ticked up 0.6% to 157.90p.
3.36pm: Gold breaks record for 25th time this year
Gold prices climbed yet again on Wednesday, seeing the yellow metal break its own record for the 25th time this year.
Having peaked at US$2,671 per ounce, gold set its latest record earlier in on Wednesday, with prices coming to settle at US$2,665 for a 0.7% gain by the afternoon.
BullionVault analysts noted the latest run meant gold had now surpassed its own record the same number of times as in 2008, when the global financial crisis struck, in just the first nine months of this year.
The platform's research director, Adrian Ash, added this year’s latest rally was being driven by speculative trading in futures and options contracts, rather than physical demand as before.
“However,” he said, “gold's latest record highs are beginning to gain attention”.
“UK investors are increasingly turning to gold as the gloom sparked by recent Labour decisions takes hold, matching the upturn in new interest among US citizens ahead of November's presidential election.”
3.03pm: Shell and BP weigh on FTSE 100 as oil drops
Shell PLC (LSE:SHEL, NYSE:SHEL) and BP PLC (LSE:BP.) appeared to weigh on the FTSE 100 into Wednesday afternoon as oil prices moved lower.
Shares in each fell by 2.5% and 1.8% respectively, placing the heavyweights among the FTSE 100’s biggest fallers.
Having gradually fallen throughout the day, the drop coincided with the FTSE 100’s dip into negative territory by the afternoon, with the index giving up 18 points to sit at 8,264.
Oil prices also fell on Wednesday, with benchmark Brent crude dipping 1% to US$74.40 a barrel.
2.42pm: Dow Jones, S&P 500 climb as Wall Street opens
The Dow Jones and S&P 500 built on their record closing values seen on Tuesday as Wednesday’s trading got underway in New York.
Both opened just above the mark, with the Nasdaq following suit to also rack up a slight gain early on.
Wall Street had followed global markets higher on Tuesday following a string of measures announced by China earlier in the day aimed at boosting the world’s second-largest economy.
Positive US economic data appeared to boost sentiment further on Wednesday as mortgage approvals were said to have continued rebounding last week.
According to the Mortgage Bankers Association, mortgage applications climbed by 11% over the week to September 20, after a 14.2% jump previously, with the improvement coinciding with the Federal Reserve’s move to cut interest by 0.5%.
2.20pm: Flutter soars at $5bn share buyback unveiled
Flutter Entertainment PLC (LSE:FLTR) jumped on Wednesday after unveiling plans to buy back US$5 billion (£3.7 billion) worth of shares ahead of its investor day.
This came as the Betfair owner said its total addressable US market was set to grow to US$63 billion by 2030 and one and a half times larger than initially forecast.
Flutter had moved its primary stock market listing from London to New York earlier this year, with the North American market including Canada set to grow to US$70 billion.
Chief executive Peter Jackson commented: “I am very excited about Flutter's strong trajectory and how well positioned we are to capitalise.”
He noted Flutter’s global addressable market was set to near US$370 billion by 2030.
“With our unmatched scale, diversification, and our global differentiator, The Flutter Edge, we have clear sustainable global advantages.
“Our intention to deliver up to US$5 billion of share repurchases over the next three to four years reflects our confidence in Flutter's future.”
London-listed shares climbed 9.5% to 18,720p on the news.
2.05pm: Rail dispute ends as workers accept pay rise
Rail workers have voted in favour of a pay offer to bring to end the long-running dispute with companies that has seen repeated strikes.
The Rail, Maritime and Transport union (RMT) announced Wednesday that train company and Network Rail workers voted overwhelmingly in support of offers.
These will see workers at operators granted pay rises of 4.75% for the last year and 4.5% in 2024, while Network Rail employees will get a 4.5% increase.
Some 99% of train company workers backed the offer, RMT said, while 88% of members from Network Rail voted in favour.
Such approval of the offers means that the long-running rail dispute is now over, according to RMT.
“We thank our members for their efforts during this long but successful campaign,” RMT said in a statement
“Their resolve has been essential in navigating the challenges posed during negotiations and in particular the previous Tory government’s refusal to negotiate in good faith, alongside relentless attacks by sections of the media and the employers.”
1.53pm: Gas prices jump as colder weather looms
Gas prices have climbed this week as Europe is expected to face a bout of colder weather from the weekend.
By Wednesday, UK gas had ticked up 5.3% since the start of the week to 87.37p per British thermal unit.
Prices climbed across Europe too, as countries braced for a forecasted drop in temperatures over the weekend to as low as five degrees celsius in Paris and London.
1.29pm: Petrol car bans risk ‘grave crisis’ in Europe, Italy development minister warns
Italy’s development minister has warned a planned ban on petrol and diesel cars in 2035 could risk hundreds of thousands of jobs across the continent’s manufacturing sector.
Calling on Brussels to review the plan, Adolfo Urso said he would hold meetings this week to demand the rules be delayed.
Europe, like the UK, has set rules for new petrol and diesel car sales to be ended by 2035 in order to prompt adoption of the likes of electric vehicles.
Such target, which last year was delayed from 2030 in the UK, has faced scrutiny from industry members as demand for electrics fails to build pace.
“The road map of the Green Deal, as it was designed, has already demonstrated its contradictions with the collapse of the European electric vehicle market and the grave crisis of European carmakers,” Urso told the Financial Times.
“The data speaks for itself. It’s already clear the road map [...] is not sustainable.”
Carmakers in the UK are mandated to ensure a proportion of their sales are made up of electrics from this year, with the figure set to rise annually from 22% in 2024.
However, data from industry body the Society of Motor Manufacturers and Traders in August showed electric vehicle sales were lagging behind the mandate.
Some 16.8% of car sales over the first seven months of the year were electrics, with this forecast to sit at 18.5% for the whole of 2024 and behind the 22% target.
12.34pm: Dow Jones set to build on latest record in mixed start on Wall Street
The Dow Jones appeared set to build on Tuesday’s latest closing record ahead of trading on Wednesday.
Having carried on a record-breaking run to end Tuesday at 42,208, futures had the Dow Jones ticking up a further 24 points ahead of Wednesday’s opening bell.
Nasdaq and S&P 500 futures had both indices off the mark prior the the bell though, with the latter also having struck a closing high of 5,733 on Tuesday.
Optimism on the back of China’s plans to reinvigorate its struggling economy earlier in the day had driven gains through Tuesday, with these including measures to lower borrowing costs and reduce restrictions on lending.
“While markets have clearly enjoyed a welcome boost off the back of a surprisingly comprehensive set of measures,” Scope Markets analyst Joshua Mahony said, “we are ultimately left wondering whether it will resolve the stuttering growth story or simply provide a short-term boost to sentiment”.
He added Tuesday’s consumer confidence survey, which had shown a slump for September, raised further questions over America’s own economy.
“This feeds back into the narrative around a potential slowdown in the jobs market,” Mahony continued, with “the prospect of a hard landing” threatening “fresh concerns over the direction of earnings” for markets.
12.06pm: Takeaway sales climb on cool, wet summer
Restaurants enjoyed a jump in home delivery sales last month as households turned to takeaways during the cool, wet summer, figures on Wednesday showed.
Like-for-like delivery sales across Britain’s restaurant sector climbed by 7.3% in August, CGA by NIQ reported, following respective growth of 17.1% and 9.4% in June and July.
This meant sales had outpaced the rate of inflation in every month of the year so far, with combined delivery and takeaway sales increasing by 13% in August.
“A generally cool and wet summer has been disappointing for consumers and hospitality alike, but with many people staying inside it’s worked to the advantage of restaurants’ deliveries,” CGA by NIQ director Karl Chessell commented.
“A buoyant August shows the ongoing appeal of ordering platforms [though] it may also indicate that some consumers are opting to save money by eating restaurant food at home rather than going out.
“Growing eat-in sales without compromising deliveries will be a key challenge for restaurants as we enter autumn.”
11.48am: Petrol prices stoop to a year low in UK
Petrol and diesel prices have fallen to a three-year low in the UK on the back of lower oil prices and a strengthening pound, according to motor group RAC.
Average petrol prices across the country’s forecourts hit 135.87p on Tuesday, RAC said, having fallen from a peak of 192p in July last year.
RAC added there was scope for fuel prices to fall further over the months ahead as retailers pass on lower wholesale costs.
“A relatively low oil price, caused by lower demand globally, and a relatively strong pound are the two factors that are contributing to pump prices falling,” spokesperson Simon Williams said.
“To see pump prices drop to this level is really positive news, both for households who depend on their vehicles for getting about, and for the wider economy - as there’s a clear link between the cost of fuel and the headline rate of inflation.”
11.41am: Sainsbury’s offloads cash machine business
J Sainsbury PLC (LSE:SBRY) has announced the sale of its cash machine business under plans to gradually scale down banking operations and cut costs.
Some 1,370 cash machines would be transferred into the ownership of NoteMachine, the supermarket said Wednesday.
This comes after Sainsbury’s sold a chunk of its banking operations to NatWest Group PLC (LSE:NWG) earlier in the year, but kept the cash machine business and other commission-income wings.
Sainsbury’s had also laid down plans in February to seek a further £1 billion in cost savings as it doubled down focus on grocery offerings.
No financial details were disclosed over the deal, which is set to be completed early next year and see Sainsbury’s cash machines remain in place with commission shared between the supermarket and NoteMachine.
Shares in the supermarket climbed 1.2% on Wednesday.
11.18am: UK economic growth forecast upped by OECD
As the global economy “turns a corner,” the UK is expected to grow joint-second-fastest among the G7 developed countries, behind only the US.
In its latest outlook, the Organisation for Economic Cooperation and Development (OECD) hiked expectations for UK economic growth in 2024 to 1.1% from 0.4% previously.
This would place the UK on par with Canada and France and ahead of Japan, Italy and Germany, after previously being forecast in May to lag behind all G7 counterparts.
Globally, the world economy was predicted to grow by 3.2% this year, against the OECD’s last projection of 3.1%, with the organisation noting “a corner” had been turned.
“Declining consumer price inflation has supported household spending,” the OECD said.
“[This has] counterbalanced the negative impact from restrictive financial conditions and the uncertainty about the ongoing war in Ukraine and the evolving conflicts in the Middle East.”
Among the G7, OECD downgraded growth forecasts for the Japanese and German economies to -0.1% and 0.1% respectively, with the latter struggling with lacklustre industrial output.
The UK is set to face headwinds from higher prices though, the OECD warned, with inflation expected to climb to 2.7% by the year end and outpace the wider G7 in 2025.
10.50am: Bank of England policymaker ‘cautious’ over further rate cuts
A “cautious” approach should be taken to cutting interest rates further in the UK, Monetary Policy Committee member Megan Greene has warned.
Rate setters should take a “steady-as-she-goes approach” as the likes of wages threaten to grow stronger than expected, Greene said during a speech in Newcastle on Tuesday.
“I believe it is appropriate to take a gradual approach to removing restrictiveness.”
Greene added she would “be looking for incoming data to provide evidence” of “economic slack [...] required to bring inflation sustainably to target”.
The committee had opted to cut base interest from 5.25% to 5.00% in August, but subsequently held the rate during September’s meeting.
According to Greene, there was a risk “structural changes in the economy” impacting wages and price rises could “require monetary policy to remain tighter for longer”.
“Until then, I believe a cautious, steady-as-she goes approach to monetary policy easing is appropriate,” she added.
9.58am: Pound forecast to hit $1.38 in next year
UBS analysts expect the pound to continue its impressive run against the dollar over the coming year and reach US$1.38 by next September.
According to the bank, diverging interest rate policies from the Bank of England and Federal Reserve should buoy the pound as the latter cuts more aggressively.
“Stickier-than-expected UK inflation has cemented a more gradual Band of England easing cycle,” UBS said in a note
“The Federal Reserve’s 50 basis point rate cut shows that its focus has shifted to the labour market.”
Sterling hit a two-and-a-half-year high against the dollar earlier this week and was at US$1.3380 as of Wednesday morning.
9.43am: Murdoch’s REA Group ‘frustrated’ after Rightmove rejects latest offer
Rupert Murdoch’s REA Group has expressed frustration after its latest bid for property portal Rightmove PLC (LSE:RMV) was batted off on Wednesday.
In a statement, REA said it was “disappointed” and “frustrated that, save for the rejection of REA's three previously disclosed proposals,” there was still no substantive engagement... Read more
Rightmove had argued the third bid, which valued it at £6.1 billion, remained “unattractive and materially undervalues the company and its future prospects”.
Panmure Liberum noted the latest offer was “complicated” and warned a successful deal was unlikely “in the absence of some creativity on REA’s part to increase its bid”.
????When we floated Rightmove back in 2006, it was £500m value company. Revenues were £18m
Fast forward 18 years. Now the company value is £5.4bn and the revenue is £364m #RMV pic.twitter.com/pDYemjia5x
— Alex (@DeGrooteMedia) September 25, 2024
9.29am: Pound falls back against euro but traders ramp up bets
The sterling slipped back against the euro on Tuesday having climbed above the €1.20 mark for the first time in two years on Tuesday.
Come mid-morning, the pound had fallen 0.3% to €1.960, with the rise earlier in the week following growing concerns of recession in Germany and expectations for faster interest rate cuts on the continent.
Traders have appeared to ramp up bets on the pound gaining further against the dollar in recent days though.
According to Bloomberg, options trading volumes for the pound versus the euro jumped some 300% ahead of the five-day average last Monday.
Tuesday also saw averages on the Depository Trust and Clearing Corporation beaten.
Expectations have been growing that the UK economy will emerge better from the recent inflation crisis than European counterparts, with interest rate cuts set to come more gradually.
9.05am: Visa accused of debit card monopoly as US files lawsuit
Visa Inc (NYSE:V, ETR:3V64) has been accused of illegally hampering competition within the debit card market in a US antitrust lawsuit.
America’s justice department filed the case on Tuesday, claiming Visa had paid off potential competitors and punished those looking to use alternative payment methods.
This had led to higher fees for consumers and hit innovation, the department said, with the lawsuit following an investigation since 2021.
Attorney General Merrick Garland argued Visa’s dominance, which sees it account for over 60% of US debit transactions, meant fees were higher than in a “competitive market”.
“Merchants and banks pass along those costs to consumers, either by raising prices or reducing quality or service," he noted.
“As a result, Visa’s unlawful conduct affects not just the price of one thing - but the price of nearly everything.”
Visa subsequently labelled the lawsuit, which had been reported earlier on Tuesday, as “meritless” and accused it of “ignoring the reality” in the debit market.
8.43am: Miners extend gains after China economic package
Miners enjoyed further gains early on Wednesday after receiving a boost on plans by China to reinvigorate its struggling economy.
Rio Tinto PLC climbed by 1.2% early on, followed by Anglo American PLC (LSE:AAL) and Glencore PLC (LSE:GLEN), after each gained on Tuesday.
This came after the People's Bank of China said short-term interest rates and cash reserve requirements would be cut earlier in the week, with the efforts to breathe life into its struggling economy boosting sentiment for commodities... Read more
Fresnillo PLC (LSE:FRES) and Endeavour Mining PLC (LSE:EDV, TSX:EDV, OTCQX:EDVMF) also climbed on Wednesday morning.
Rentokil Initial PLC (LSE:RTO) took the spot as the day’s biggest riser early on, up 3%, after announcing a representative of activist investor Nelson Peltz's Trian Fund Management would join its board… Read more
8.27am: Co-op swings to profit despite challenging conditions
The Co-operative has reported a swing to profit for the first half of the year as its food, business and life units all outperformed the wider market.
Pre-tax profit swung to £58 million over the first six months of the year, against a £33 million loss in 2023, Co-op said on Wednesday.
This came on the back of a 1.5% increase in revenue to £5.6 billion as food sales ticked up alongside life services turnover.
“Although the external environment remains challenging, it is testament to the underlying strength of our Co-op that we have outperformed in all our markets,” chief executive Shirine Khoury-Haq said.
Food revenue climbed by 3.2%, the Co-op added, while revenue from its funeral, legal and insurance wings increased by 1.4%, 35% and 7% respectively.
Wholesale turnover dipped by 2.9%, though an 11% increase in franchise revenue meant Co-op’s market share was either unchanged or grew across its food, business and life segments.
8.07am: Nike, Sky ads banned in UK
Social media adverts from Nike Inc and Sky Plc have been banned in the UK over unclear claims which regulators said could mislead customers.
Nike’s, an X ad from last December, featured an image of its trainers alongside a caption saying they were “now just £26”.
Sky’s featured on its NOW TV streaming service and related to membership options, which were automatically added to customers’ baskets once on the site.
Britain’s Advertising Standards Agency (ASA) noted on Wednesday that the Nike promotion related only to children's sized shoes when consumers clicked through to the site, while text in the Sky campaign was said to be unclear.
The regulator said it was investigating such “online choice architecture,” which sees brands hide or delay key information on products in order to prompt people to click on ads... Read more
7.40am: Rightmove rejects latest bid from Murdoch's REA Group
Rightmove PLC (LSE:RMV) has rejected a third offer from Rupert Murdoch's REA Group.
Noting it "continues to be unattractive and materially undervalues the company and its future prospects," Rightmove said Wednesday its board had unanimously rejected the offer... Read more
Made up of 341p in cash and 0.0422 new REA shares per Rightmove share, the latest bid from the Australian property portal owner implied an offer value of 759p, Rightmove pointed out.
7.32am: DFS reports loss, eyes consumer recovery this year
DFS Furniture PLC (LSE:DFS) has reported a loss for the year but noted improving house market conditions and growing incomes should aid a recovery ahead.
Reported pre-tax losses for the year sat at £1.7 million, against a £29.7 million profit in 2023, the furniture retailer said in an update on Wednesday.
This coincided with a 9.3% drop in revenue to £987.1 million, which DFS attributed to Red Sea shipping delays late in the year and lacklustre demand.
“Despite the challenges that the business has seen, we are optimistic for the future and see signs that market growth could soon return,” chief executive Tim Stacey commented.
“We expect recent improvements in housing transaction data and strengthening consumer balance sheets to lead to increased upholstery market demand across 2025.”
Underlying profit before tax from continuing operations sat 65.7% lower at £10.5 million, with DFS previously suggesting this would be closer to £20 million.
No dividend was declared as a result, as underlying cash outflows climbed by £3 million to £10 million and debt grew by 17.5% to £164.8 million.
DFS added orders had grown over the start of the new financial year and said it was on course to deliver medium-term targets of £1.4 billion in revenue and 8% pre-tax profit growth.
7.10am: Stocks seen lower
The FTSE 100 was seen falling back on Wednesday morning following two consecutive days of gains earlier in the week.
Futures had London’s blue chips dipping 25 points to 8,290 ahead of the day’s open.
Gains on Tuesday had been led by miners, alongside Asia-focused Prudential PLC (LSE:PRU) and Standard Chartered PLC (LSE:STAN), after China unveiled a string of measures aimed at buoying the world’s second-largest economy.
Asian markets were mixed overnight in their second day of trading after the Chinese measures, which had looked to lower borrowing costs and reduce restrictions on lending.
Back in London, focus on Wednesday turns to an update from DFS Furniture PLC (LSE:DFS) and Flutter Entertainment PLC (LSE:FLTR)’s investor day.