- FTSE 100 up 6 points
- Shell, BP lead fallers
- Mining stocks rally
4.01pm: FTSE 100 hovers in green
The FTSE 100 remained in green territory come late trading, buoyed by miners and Asia-focused stocks, but held back by oil heavyweights.
Prudential PLC (LSE:PRU) led gainers late on, having risen by 6.1%, ahead of Standard Chartered PLC (LSE:STAN), after China doubled down on commitments to reinvigorating its flagging economy earlier in the day.
Beijing was said to be gearing up for a 2 trillion yuan (£213 billion) debt issue, according to Reuters, after Chinese leaders pledged “necessary fiscal spending” to meet an economic growth target of 5% this year.
This followed a string of measures announced by China’s central bank earlier in the week, aimed at lowering borrowing costs and reducing restrictions on lending.
Mining companies also got a boost on Thursday on the back of the latest pledge as sentiment appeared to improve around commodities, with Antofagasta PLC (LSE:ANTO), Anglo American PLC (LSE:AAL), Glencore PLC (LSE:GLEN) and Rio Tinto PLC also among the day’s risers.
Luxury firms were up too as a result of the commentary coming out of China, with FTSE 250-listed Burberry Group PLC (LSE:BRBY) climbing 7.7% as Watches of Switzerland Group PLC (LSE:WOSG) added 8.7%.
"The risk of a US recession has diminished and now Chinese economic weakness is being counteracted by some impressive action on the part of authorities there," IG analysts said.
"Stock market bears are running out of reasons to support their negative theses."
Gains for London’s blue-chip index remained constrained though, as heavyweights Shell PLC (LSE:SHEL, NYSE:SHEL) and BP PLC (LSE:BP.) both fell over 4% during the day on worsening prospects for oil prices.
3.40pm: Gold above £2,000 per troy ounce for first time
Gold’s latest record-breaking run has taken the yellow metal above the £2,000 per troy ounce mark for the first time ever.
Having peaked at US$2,686 per ounce earlier in the day, gold also climbed as high as £2,007 in sterling.
This meant gold had risen by 23% this year in sterling terms, as escalating tensions in the Middle East and growing prospects of interest rate cuts fuelled the latest boost.
“Hot-money traders in futures and options contracts are behind gold’s latest all-time records, betting that the precious metal will jump further as Western central banks cut interest rates,” BullionVault Adrian Ash said.
“But this strong uptrend in the price of gold is supported by Asian and other emerging-market central banks buying bullion as a way of spreading their investment and also political risk.”
According to the Royal Mint, purchases of gold have outweighed selling at a rate of two-to-one over the course of September.
This “suggests many believe the yellow metal could rally further this year,” Royal Mint market insights manager Stuart O’Reilly commented.
“With opinion polls suggesting that several swing states are in a ‘virtual tie’ ahead of the US election, there could be further gold purchasing as investors look for new opportunities in the market.”
3.18pm: Pound regains against the euro and dollar after pause in rally
Sterling regained pace against the dollar and the euro on Thursday after its rally looked to have taken a brief pause earlier in the week.
As of Thursday afternoon, the pound was trading at US$1.3370 and €1.1999, having climbed by 0.4% and 0.3% against each currency respectively.
The pound had lost ground against each earlier in the week, after climbing to well over two-year highs on the back of growing expectations for faster rate cuts overseas.
XTB analyst Kathleen Brooks noted such expectations for cuts in the US may have reached a peak, in turn threatening the pound’s rally against the dollar.
“The risk for foreign exchange traders is that the rate differential is too wide, and this difference will narrow in the coming weeks,” she said.
“We think that it is unlikely that the Bank of England will cut at a faster pace, instead we think that the market is over its skis when it comes to Federal Reserve rate cut expectations for this year, and we could see expectations scaled back.”
2.54pm: S&P 500 hits record in bright start on Wall Street
Wall Street enjoyed a solid start to the day’s trading on Thursday following better-than-expected jobless claims data and further vows from China to boost its flagging economy.
The Nasdaq climbed 1.2% as the market opened, while the Dow Jones and S&P 500 ticked up by 0.6% and 0.7% respectively.
This took the S&P 500 to a record intraday high of 5,758.81 points, after the index has repeatedly racked up record closing values recently.
Better than expected guidance in Micron Technology Inc’s results saw shares in technology firms jump early on, with the semiconductor firm climbing 16% and dragging up the likes of Nvidia Corp, Arm Holdings PLC and Meta Platforms Inc (NASDAQ:META, ETR:FB2A, SWX:FB).
Stronger-than-expected jobless claims figures also provided further positive news on for the economy on Thursday morning, as Labour Department data showed the number of people claiming unemployment benefits in the US fell to a four-month low last week.
Applications for jobless claims fell by 4,000 to 218,000 over the week to 21 September, the department said, below analysts' expectations for 224,000.
This added to a further boost in sentiment overnight, after Chinese leaders pledged “necessary fiscal spending” to meet an economic growth target of 5% this year.
2.28pm: Shell, BP see £11 billion wiped off value as oil price seen falling further
Shell PLC (LSE:SHEL, NYSE:SHEL) and BP PLC (LSE:BP.) have faced almost £11 billion being wiped from their combined valuations on Thursday after falling as the outlook for oil prices deteriorated.
Shell sat top of the FTSE 100’s fallers by the afternoon, down 4.8%, while BP followed as the day’s second biggest loser with a 4.6% decline.
This comes after reports suggested Saudi Arabia was set to scrap an unofficial oil price target of US$100 a barrel and press ahead with a production increase later this year regardless of falling prices.
Benchmark Brent crude fell throughout the day too, by 2.8% to US$71.34.
“Investors continue to trim their net speculative long positions in crude despite price supportive factors,” Swissquote Bank analyst Ipek Ozkardeskaya commented.
1.50pm: US economy confirmed to have grown by 3% in second quarter
The US economy was confirmed on Thursday to have grown by 3% over the second quarter of this year.
Unchanged final estimate figures from the US Bureau of Economic Analysis firmed up the reading on Thursday, which saw gross domestic product tick up by 0.75% on a quarterly basis.
This meant the American economy outpaced both the UK and Eurozone between April and June, which grew by 0.6% and 0.2% respectively.
1.41pm: China set for two trillion yuan debt issue to fund stimulus
China is reportedly set to issue some two trillion yuan (£213 billion) worth of debt to fund economic stimulus measures.
According to Reuters, Beijing is gearing up to issue the special sovereign bonds after Chinese leaders pledged “necessary fiscal spending” to meet an economic growth target of 5% this year.
The latest vow, which follows a string of measures announced by China’s central bank on Tuesday, has helped to buoy the likes of mining companies in London on Thursday.
This was as sentiment around commodities was boosted further, with copper jumping over 2.2% and silver gaining 1.2% during the day.
Antofagasta PLC (LSE:ANTO) and Anglo American PLC (LSE:AAL) shares both climbed over 6% on the back of the gains, while Fresnillo PLC (LSE:FRES), Glencore PLC (LSE:GLEN) and Rio Tinto PLC also sat among the FTSE 100’s biggest risers.
13.18pm: UK's last coal power stations nears close
Britain’s last remaining coal-fired power station is set to close later this month, bringing an end to the nation’s 140-year-plus reliance on the fossil fuel.
Ratcliffe-on-Soar, owned by German-based Uniper, is due to wind down for the last time on September 30, having served as Britain’s final coal power station since September 2023.
This will mean Britain is no longer reliant on coal for power, after the fuel began being used to generate electricity in 1882... Read more
12.49pm: Nasdaq set to lead Wall Street higher as Micron fuels AI stocks
Wall Street was set for a bright start on Thursday, with the Nasdaq expected to jump at the open following well-received earnings from Micron Technology Inc (NASDAQ:MU).
Futures had the Nasdaq adding 1.5% ahead of the bell, while the Dow Jones and S&P 500 were seen 0.4% and 0.8% higher respectively.
This came as expectation-beating earnings from Micron Technologies offered a boost to stocks in the artificial intelligence space.
Shares in the chipmaker jumped 16.9% in pre-market trading after it forecast first-quarter revenue ahead of expectations, leading the likes of Nvidia Corp, Advanced Micro Devices Inc and Broadcom Inc.
Thursday was also set to bring a string of macroeconomic data, with jobless claims and durable good figures due alongside a final second-quarter gross domestic product estimate.
12.18pm: Saudi oil target tweak rumours weigh on prices
Saudi Arabia is reportedly preparing to ditch an unofficial crude oil target price of US$100 a barrel, putting further downward pressure on prices.
According to Financial Times-cited sources, Saudi is set to press ahead with planned production increases from December, regardless of whether prices fall.
This would follow a two-month delay in plans to unwind production cuts from oil cartel OPEC as prices of benchmark Brent crude have dipped as low as US$70 this month.
Brent sat at US$71.54 on Thursday, having fallen by 2.5% during the day and 4.2% over the week so far.
Shares in heavyweights Shell PLC (LSE:SHEL, NYSE:SHEL) and BP PLC (LSE:BP.) faced a blow on Thursday on the back of the drop, each dipping by over 4%.
11.51am: Gold fast approaching $2,700 as new high struck
Gold prices remained firmly on their upward trajectory on Thursday, taking the yellow metal to yet another high and ever closer to the US$2,700 an ounce mark.
Gold sat at US$2,675 as of late morning, having climbed by another half a per cent during the day.
IG Group analysts said the US$2,700 milestone was now in sight, noting gold’s outlook remained positive in the near term given “current economic landscape and geopolitical tensions”.
Last week’s 0.5% base interest rate cut by the Federal Reserve has helped to buoy gold most recently, alongside escalating tensions between Israel and Lebanon-based Hezbollah.
“Expectations of easing Fed policy, falling bond yields, and ongoing global uncertainties all signal potential upside for gold prices,” IG analysts added.
11.31am: Thames Water credit rating slashed further
Thames Water has faced further credit rating cuts after warning earlier in September that it only had enough cash to last until December.
Both Moody’s and S&P announced the cuts overnight, suggesting London’s water supplier was moving closer to defaulting on its debt.
S&P, which reduced Thames’ class A and B debt ratings to ‘CCC+’ and ‘CCC-’ respectively, said warnings that its cash could run out in December were unexpected.
“This announcement is contrary to our previous expectation in July, based on the company’s disclosure, that liquidity would last the company through May 2025.”
Moody’s also pointed to Thames’ “significantly tighter liquidity position than previously expected,” warning this could lead to default soon.
“This will likely lead in the near term to a distressed exchange, where creditors agree to some form of amendment or extension of credit terms that results in a loss,” Moody’s said.
“A distressed exchange of this type constitutes a default by Moody’s definition.”
11.13am: Prudential, Standard Chartered rally as China doubles down on economic pledges
Further commentary from China over support to prop up its flagging economy has provided a boost for Asia-focused Prudential PLC (LSE:PRU) and Standard Chartered PLC (LSE:STAN).
Insurer Prudential ticked up 6.3% on Thursday morning to top the FTSE 100’s risers, ahead of miners and Standard Chartered, which would all benefit from Chinese economic improvement.
Following a string of measures from China’s central bank earlier in the week, the country’s leadership on Thursday pledged “necessary fiscal spending” to meet targeted economic growth of 5%.
A readout at China’s monthly politburo meeting vowed to “respond to people's concerns, adjust home purchase restriction policies, lower existing mortgage rates and improve land, fiscal, tax and financial policies as soon as possible”.
This comes as China grapples with a sharp downturn its property market and a stoop in consumer confidence.
10.52am: Rolls-Royce through to next round of UK mini-nuke competition
Rolls-Royce Holdings PLC (LSE:RR.) is among four companies to have been shortlisted for public support in building mini nuclear power plants in the UK.
Alongside Holtec Britain, GE Hitachi and Westinghouse Electric, Rolls-Royce will enter the next stage of negotiations with the UK government over support for small modular reactor (SMR) developments.
Though none have been developed in the UK yet, these mini-nuclear reactors are designed to be cheaper and quicker to build than conventional plants.
Two companies are expected to ultimately be offered government funding, with six originally having been involved in the competition.
EDF previously withdrew itself from the running, while US-based NuScale was not selected for further negotiations.
Rolls-Royce SMR chief executive Chris Cholerton noted the FTSE 100 listed company was also 18 months ahead of rivals in the UK’s regulatory assessment process.
Selection for support would “help us to maintain this important first-mover advantage,” he added.
9.50am: Oil majors dip
A combination of low fuel pump prices and a dip in Brent crude oil forecasts is weighing on big-cap oil stocks.
BP PLC (LSE:BP.) is currently the biggest faller on the FTSE 100, having shed 4.3% from its share price, while Shell PLC (LSE:SHEL, NYSE:SHEL) is currently off 3.7%.
Earlier this week, Rabobank estimated that Brent crude oil will fall to US$71 a barrel for the rest of the year and to average US$70 in 2025.
Rabobank had already reduced its forecast to US$82 for the rest of 2024 but recent confirmation of poor Chinese and US demand data and a looming glut of supply caused the Dutch firm to reassess its outlook.
The outlook coincides with petrol and diesel prices at the UK pumps hitting a three-year low.
Average petrol prices across the country’s forecourts hit 135.87p on Tuesday, said the RAC, 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.
BP shares are currently swapping for 383p and Shell for 2,441p.
The broader FTSE 100 remains buoyant at 8,303, around 35 points higher from yesterday's close.
9.35am: £10bn UK data centre coming to former Britishvolt site via Blackstone
US private equity firm Blackstone is investing £10 billion in a new artificial intelligence data centre in Blyth, Northumberland, the former site of collapsed electric vehicle battery plant Britishvolt.
Prime Minister Sir Keir Starmer called the investment a significant vote of confidence in the UK, reinforcing the country's position as a global player.
The deal was facilitated by the Government’s Office for Investment and follows the collapse of Britishvolt, which had previously planned to build electric car batteries on the site at the coastal village of Cambois, across the river from the town.
Blackstone President Jon Gray highlighted the UK's strong talent and innovation as key factors in their decision, stating that the investment demonstrates Blackstone’s long-term commitment to Britain’s economic growth and digital infrastructure.
9.04am: The morning so far
There was a flurry of company news to keep up with this morning, starting off with Diageo PLC (LSE:DGE) warning of continued weakness in the global alcoholic drinks market in a brief trading update.
“The global environment remains challenging for both our industry and Diageo,” said chief executive Debra Crew.
“While consumers continue to be cautious in this environment, we are focused on strengthening the resilience of our business through operational excellence, productivity and strategic investments to win quality market share,” she added.
The market apparently took some reassurance from this with Diageo shares adding 5.8%.
Blue-chip mining stocks rallied this morning, with Glencore PLC (LSE:GLEN), Anglo American PLC (LSE:AAL), Antofagasta PLC (LSE:ANTO) and Rio Tinto plc all adding 4% or more. It comes as gold continues to soar to new all-time highs.
South West Water owner Pennon Group PLC (LSE:PNN, OTC:PEGRY) said its has set aside £16 million to deal with the Brixham water incident that caused a PR headache for the FTSE 100-listed utility in the summer.
Halma PLC (LSE:HLMA), meanwhile, added 1.2% after delivering a by-the-numbers trading update.
There was some concerning news for the retailers as consumer confidence in the UK dropped sharply in September, according to the British Retail Consortium’s Consumer Sentiment Monitor.
The report showed worsening expectations for personal finances and the broader economy as the public prepares for chancellor Rachel Reeves’ upcoming October Budget.
Retail stocks remained broadly in the green regardless.
It was oil majors BP PLC (LSE:BP.) and Shell PLC (LSE:SHEL, NYSE:SHEL) that proved the biggest drag on the index. They fell 3.5% and 3.1% respectively, coinciding with petrol pump prices hitting three-year lows on Wednesday.
8.51am: Halma adds 1.2% following trading update
Halma PLC (LSE:HLMA) shares added 1.2% this morning in response to a trading update.
The safety products maker said it continues to expect good organic constant currency revenue growth and an adjusted EBIT margin of around 21% for the full year, in line with previous guidance.
Group order intake so far this year has surpassed revenue and last year’s comparable period.
Despite the negative impact of sterling appreciation on results, the company expects a strong cash performance, supporting ongoing investments in organic growth and acquisitions.
During the first half, Halma made four acquisitions within its Safety sector, valued at approximately £85 million.
The acquisitions included UK-based MK Test Systems, Portuguese fire detection firm Global Fire Equipment, Spanish fire alarm specialist Advantronic, and UK-based electrical safety provider RemLive.
Halma also reported one small disposal in the period, selling Hydreka SAS for around £7 million, net of disposal costs.
8.45am: Pennon sets aside £16mln for Brixham water incident
South West Water-owner Pennon Group PLC (LSE:PNN, OTC:PEGRY) has set aside £16 million to address the cryptosporidium water quality incident that occurred in Brixham over the summer.
The funds are intended to cover enhanced customer compensation, the provision of bottled water over an eight-week period and a series of interventions aimed at resolving the issue.
Pennon was forced to apologise for the outbreak of diarrhoea in Brixham, which has affected at least 22 people.
Pennon chief executive Susan Davy said the company had “fallen significantly short”.
Some 16,000 houses were cut off from the mains while the problem was dealt with.
Pennon undertook several measures following the incident, including cleaning and flushing the water network 27 times, replacing sections of the 30-kilometre network and installing localised filters and ultra-violet treatment plants.
In a Thursday trading update, Pennon called it an “incredibly rare event” for the company.
8.36am: Consumer confidence plummets
Consumer confidence in the UK dropped sharply in September, according to the British Retail Consortium’s Consumer Sentiment Monitor.
The report showed worsening expectations for personal finances and the broader economy as the public prepares for chancellor Rachel Reeves’ upcoming October Budget.
Consumer expectations for their personal financial situation over the next three months fell to -6 in September, down from +1 in August.
Meanwhile, confidence in the state of the economy declined sharply, with expectations plunging to -21 from -8.
Personal spending on retail improved slightly to -8 from -9, but overall spending sentiment dropped to +10 from +11.
Savings expectations also worsened, falling to -9 from -4.
BRC chief executive Helen Dickinson warned of the potential challenges facing retailers in the months ahead: "Retailers could face a turbulent few months as consumer confidence fell significantly in September.
“Negative publicity surrounding the state of the UK’s finances appears to have damaged confidence in the economic outlook, particularly among older generations.
“Despite this, expectations for future retail spending, while negative, did not yet appear to have been adversely affected, with many consumers expecting to reduce the amount they save instead."
8.21am: FTSE 100 jumps thanks to mining stocks
The FTSE 100 shot up 44 points to 8,312 at this morning’s opening bell.
Blue-chip mining stocks bolstered the index, with Glencore PLC (LSE:GLEN) shooting up 4%, Anglo American PLC (LSE:AAL) adding 3.9% and Rio Tinto plc and Antofagasta PLC (LSE:ANTO) adding around 3.3% each.
Diageo PLC (LSE:DGE) surprised with a 3.5% jump despite a cautious trading update, while Prudential PLC (LSE:PRU) and easyjet plc are also looking well bid.
8.05am: Mitchells & Butlers delivers another optimistic trading update
Mitchells & Butlers PLC (LSE:MAB) has reported a 5.2% yearly increase in like-for-like sales growth for the 51 weeks ending 21 September in a short trading update.
The owner of O’Neill’s, Harvester, All Bar One and other popular chains has generated positive coverage from City analysts this year, with the likes of Jefferies and Shore Capital Markets impressed by strong profits and cash generation.
According to today’s pre-close update, yearly food sales have surged 5.3% and drink sales 4.9%.
Mitchells & Butlers has completed 185 site conversions and remodels and opened six new locations this year.
Although a combination of drab summer weather, riots and a lingering inflation made for sluggish fourth-quarter sales, management claimed that sales growth “has remained ahead of the market”.
The latest CGA RSM Hospitality Business Tracker showed ear-on-year sales growth of 1.3% in August and 1.5% in July, compared to 2.5% at Mitchells & Butlers
7.36am: Diageo warns of ‘challenging’ global market ahead of AGM
Diageo PLC (LSE:DGE) has cautioned of continued weakness in the global alcoholic drinks market in a brief trading update ahead of today’s annual general meeting.
Chief executive Debra Crew said: "Our expectations are unchanged from when we reported our fiscal 24 preliminary results on 30 July 2024.
“The global environment remains challenging for both our industry and Diageo.
“While consumers continue to be cautious in this environment, we are focused on strengthening the resilience of our business through operational excellence, productivity and strategic investments to win quality market share.”
In the July preliminaries, Diageo guided towards organic net sales growth of between 5% and 7%.
Today’s comments echo what was said then, with management warning that a cautious consumer environment and geopolitical uncertainty will weigh on sales and cause organic operating margin compression.
Diageo’s shares fell to their lowest level since the pandemic following that update. They remain 11% lower year to date at 2,497p.
Negative pricing trends saw UBS slap a sell rating on the stock earlier this week.
7.17am: UK car production hits three-year low
Yearly UK car production fell by 8.4% in August, with 41,271 units made, according to the Society of Motor Manufacturers and Traders Limited (SMMT).
This marks the sixth consecutive month of declines and the lowest rate of production in over three years.
Output was hit by seasonal factors and a continued shift towards electric vehicle (EV) production, said SMMT.
SMMT boss Mike Hawes stated: ”With the traditional summer shutdowns and factories prepping to switch to new models, August was always going to be a quieter month for output.
“The sector remains optimistic about a return to growth, however, with record levels of investment announced last year.”
Production for the domestic market fell by 19.8%, while exports recorded a smaller decline of 5.9%.
The output of electrified vehicles saw a 25.9% drop, reducing their share of total production to 29.6%.
7.07am: Stocks to dip
Pre-market trades suggest a bullish start for the FTSE 100.
Fifty points are expected to be added at the opening bell to bring the index up to 8,311.
It follows a mixed session for the blue-chip index when it was initially bid higher but ended up 14 points in the red as the oil majors weighed on the market.
Today sees trading statements from safety-products conglomerate Halma PLC (LSE:HLMA) and water utility Pennon Group PLC (LSE:PNN, OTC:PEGRY).
As with the rest of its water utility counterparts, the latter is currently in the firing line over the abundance of sewage leaks in British rivers.
On the macroeconomic front, yearly car production in the UK fell 8.4% in August, marking the sixth straight month of declines.