- FTSE 100 falls 59 points
- Rightmove refuses takeover deadline request
- Carmakers Aston Martin and Stellantis warn on profits
- House prices jump by most in two years
- GDP growth revised up for last year, down for past quarter
4.10pm: FTSE flops
The FTSE 100 is down 71 points or 0.85% lower at 8,250 as we head into the final half hour, with the FTSE 250 down almost 1% at just over 21,035.
Across the FTSE 350, the biggest faller was Aston Martin Lagonda, down 23.3% following a profit warning that comes just over two months after its half-year results.
Rightmove was the biggest blue-chip faller after suitor REA Group walked away after the UK property portal played hard to get.
Carnival was also down almost 5% despite reporting what it said were record revenues and profits.
Gold miners including Centamin and Endeavour were also down as the price of gold retreated from last week's all-time highs above $2,682 per ounce, to $2,634.
Fidelity China Special Situations PLC (LSE:FCSS) was the top riser, as Chinese stocks soared.
3.35pm: Small nuclear specialist moves from London to Paris to access more fundraising
Newcleo, which is developing small and safe nuclear technology company, has relocated its holding company's headquarters from London to Paris as it said this would enable it to access a wider range of funding.
The startup finished its 'series A' fundraising effort in the UK after drumming up €135 million, taking its total raised to €535 million.
Newcleo, which aims to develop a 'precursor' reactor in Italy by 2026, a prototype reactor in France by 2031 and commercial reactors from 2033, said it will reopen the fundraising in France later this year to tap French and European investors.
The move of its headquarters does not involve staff transferring between the five countries where it operates, the company said, but being headquartered in Paris "opens up Newcleo’s access to a broader range of European funding opportunities".
"The company is now better placed to secure significant investments and grants from European institutions and institutional investors," it said.
The company noted that the newly appointed European Commissioner for Energy has given a specific mandate to accelerate the development of small modular reactors (SMRs), while the company has not figured in the first round of the UK SMR competition, where the final shortlist of four was chosen last week.
3.10pm: Carnival makes a splash, shares sink
Carnival PLC /Carnival Corp (LSE:CCL NYSE:CCL) results for the third quarter, reported this afternoon, were record-breaking, it says, with net income of $1.7 billion representing a 60% increase compared to the same period in 2023.
However, the main thing that the shares seem to have broken today is the share price, which is down over 5%.
This is despite company revenue hitting an all-time high of $7.90 billion, which would seem to suggest that appetite for charter cruises has rebounded from the pandemic era, and Carnival raising its full-year adjusted EBITDA forecast to around $6 billion, which represents an over 40% increase compared to 2023.
2.52pm: Wall Street mixed
It's a mixed start for US stocks since the open,
The S&P 500 and Dow Jones are in the red, down 0.1% and 0.5%, but the Nasdaq is up 0.25%, along with the small and mid caps of the Russell 2000, up 0.7%.
Among notable movers, Apple is up 1.9%, Nvidia is down 0.4%, other big tech names are not much moved, while JPMorgan is down 1.4%.
The biggest risers on the Nasdaq 100 are led by China's Pinduoduo Inc (NASDAQ:PDD), and Apple.
Along with Nvidia, semiconductor stocks are down, including Micron Technology, Arm Holdings, Broadcom and ASML.
2.39pm: Right move for everyone?
Rightmove shares may be down 8% but they remain more than 20% higher than before the first bid was tabled, points out Susannah Streeter, head of money and markets at Hargreaves Lansdown.
This shows a "renewed enthusiasm" for the FTSE 100 company’s prospects and perhaps "a glimmer of hope that perhaps another suitor may step in".
Analyst Sean Kealy at Liberum sas REA Group walking away as a higher offer "would have proven EPS dilutive".
"Attention should rightly now turn to the right equity valuation for Rightmove – which we believe traded too cheaply prior to the bid," he says.
Indeed, REA's interest came after around a 30% drop in Rightmove’s share price from the peak in December 2021.
The Aussie group "chose to exploit a valuation gap", says Kealy, "that had become ever greater as the underlying business continued to grow c8% YoY, but the rating continued to compress."
As this morning's data from Nationwide shows, sentiment around the property sector has been improving on the back of interest rate cuts, says Streeter.
"However, there are still risks ahead to the Rightmove model. The number of estate agents is falling, as DIY alternatives grow in popularity and more estate agents look set to be forced out of business.
"This could hamper the ability to cross-sell premium advertising packages," she says.
2pm: REA remains disappointed
More details after Rupert Murdoch’s REA Group walked away from a possible takeover of Rightmove PLC (LSE:RMV) following the rejection of a fourth offer.
The Australian company fired some whinging parting shots at the board of the UK property portal after dropping its takeover approach.
It said the proposed combination was dependent on agreeing on a fair price, which would have required meaningful engagement and a constructive dialogue.
A chairman-to-chairman meeting took place on Saturday after which, at REA’s request, an additional meeting was held on Sunday, “where no presentation or any other information was given by Rightmove,” said the Aussie group.
Rightmove this morning said it was not prepared to push back today's 5pm bid deadline to determine whether a mutually acceptable proposal could have been reached.
Owen Wilson, REA’s chief executive, was "disappointed with the limited engagement from Rightmove ... that impeded our ability to make a firm offer within the timetable available. They had nothing to lose by engaging with us".
1.20pm: Industrial revolution
It's a historic week for Britain's industrial heritage.
Tomorrow the UK will become the first major economy to no longer produce electricity from burning coal, following 142 years of burning the fossil fuel for this purpose as well as for heat.
Today is the last day for our last coal power station, Ratcliffe-on-Soar, which is owned by Germany's Uniper.
As we reported last week, Britain has closed 15 coal-fired power stations in the pasty three and a bit decades, with Ratcliffe’s closure set to see Britain become the first among G7 nations to entirely scrap the fuel.
And in Port Talbot, Wales, the last remaining blast furnace will stop producing steel also today.
Tata Steel is expected to remove the last usable liquid iron from blast furnace 4 this afternoon.
12.52pm: UK shares sink lower as US futures point south
UK shares are heading ever lower as the US trading session approaches, with Wall Street futures also in the red.
The FTSE 100 is down over 61 points or 0.7% at 8,260, while its mid-cap sibling is down 223 points or 1.05% at 21,017.
Aston Martin is leading the way lower, skidding down 22%.
Among the blue chips, Rightmove is down 8.2% after suitor REA decided to walk away.
Airlines and suppliers are prominent among the fallers, with Wizz Air down 4.7%, easyJet down 3.3% and BA owner IAG down 3.1%.
S&P 500 futures are pointing to 0.2% decline, while Nasdaq 100 futures are down 0.3% and Dow Jones futures are down 0.1%.
Last week saw small losses for the S&P and Nasdaq, with modest gains for the Russell 2000 and the Dow Jones eked out another record close.
The end of last week brought the latest update on the core PCE index, the Federal Reserve’s preferred inflation measure, which roughly supported the Fed’s view that inflation is on a sustainable path back down to its 2% target.
12.20pm: Frasers makes offer for Mulberry
Sports Direct-owner Frasers Group PLC has made an offer to acquire the 43% of shares it doesn’t currently own in Mulberry Group to stave off a potential "Debenhams situation".
The sports retailer, whose 130p-per-share offer values the handbag maker at £83 million, says it received a holding response to its approach at the weekend, which it felt was “wholly unsatisfactory”.
Frasers said it had been surprised when Mulberry proposed on Friday to raise almost £11 million from its largest shareholder, Singapore's Challice Ltd, and from retail investors. These shares are being offered at 117.5p.
The Mike Ashley-owned retailer does not like the look of the dilutive Challice fundraising and feels instead "the best steward to return Mulberry to profitability" would be alongside brands like Gieves & Hawkes, Lonsdale and Slazenger.
11.55am: Broker thoughts
The bout of wet weather in the early stages of autumn should be good news for several clothing retailers after a tough summer, analysts say.
Marks and Spencer Group PLC (LSE:MKS), Next PLC and AB Foods' (LSE:ABF) Primark are all in line for a boost heading into the colder months as a result, according to Shore Capital.
Likely to trigger demand for coats, boots, caps and hats, analysts said the start of autumn had been surrounded by a few rainy weels “for once”, which is liable to play into the hands of those retailers taking market share recently, such as M&S, alongside "robust players" like Next and Primark.
Elsewhere, analysts at Peel Hunt noted the offer for Learning Technologies Group PLC (AIM:LTG, OTC:LTTHF) of 100p per share from US private equity firm General Atlantic on Friday.
Discussions have started with General Atlantic and LTG has provided access to due diligence.
But the Peel Hunt team suggests the offer price, while 33% higher than LTG’s share price of 75p on 26 September, looks a little low and so "will not gain full investor support" unless it is hiked.
11.42am: Broad based retreat
The Footsie is down only 39 points or 0.5% but it's quite a broad-based retreat, with only a dozen companies' shares in green.
Most of those with shares higher are commodities companies, linked to the positive mood in Chinese stocks earlier, notably miners Rio Tinto PLC and Glencore PLC (LSE:GLEN).
Oiler supermajors BP PLC (LSE:BP.) and Shell are also in green, though the oil price is little moved, with Brent futures at $71.61.
On the FTSE 250 the biggest climber is Fidelity China Special Situations PLC (LSE:FCSS), up 4.8% today and almost 20% over the past week and 30% the past fortnight.
Not directly connected to that trust, but Henk-Jan Rikkerink, global head of solutions & multi-asset at Fidelity International, says he believes the recent weaker global data points are "more likely to indicate a soft patch rather than a serious downturn", but "investors are reacting" anyway.
"We believe the global economy is not headed for an imminent recession and see signs that we have a rotation more than a change of direction on our hands."
Following the large Fed cut and the recent Chinese stimulus package that cut interest rates, mortgage rates and established new monetary tools to support the stock market, Rikkerink said this "could have a positive impact on asset prices in the short term" but as corporate earnings are what drives long-term equity performance, "it is yet to be seen if these latest measures will be enough to boost the long-term economic outlook".
But the direction of travel is clear, he says, "we are heading for a cycle of further monetary and government support that will seek to cushion any bumps in the economy.
"Investors are adapting to a drop in rates, and our quant models are no longer advocating a pro-risk stance."
11.19am: Vodafone and Three offer concessions to CMA
After several statements this morning about its Three merger and Italian business sale, Vodafone Group PLC (LSE:VOD) has just released a joint statement with Three where they set out further concessions in order to get their proposed UK merger cleared on competition grounds.
After the Competition and Markets Authority (CMA) voiced concerns that the proposed merger would result in a substantial lessening of competition in both the retail and wholesale mobile markets, by reducing the number of network operators in the UK from four to three, .
Vodafone and Three said they “strongly disagree” with these concerns, but have attempted to placate the regulator with numerous remedies, on top of the £11 billion network-investment programme they already suggested.
These included maintaining Three’s SMARTY brand tariff at £10 for longer, committing to discounted offers for younger and vulnerable customers, and making offers to encourage other smaller mobile operators to access their network capacity at prices to enable good deals for retail customers.
The pair remain opposed to the CMA’s ‘ringfencing’ proposals though...read more on the remedies here.
10.52am: Some GDP data I missed, sorry
It's been a much busier Monday than normal, so there was an Office for National Statistics update earlier that got overlooked.
The ONS released an update showing that GDP estimates for the previous two years were a bit too low, with an upgrade to 2023 from an almost flat 0.1% to a still modest 0.3%.
Likewise, GDP for the second quarter of 2024 was also revised down to 0.5% compared to the first quarter from 0.6% previously, while the annual rate of growth was cut to 0.7% from 0.9%.
The revised estimates for the past quarter and recent years use "additional data to provide a more precise indication of economic growth than the first estimate".
Also, the revisions to GDP data now suggest that the UK economy grew modestly over the last couple of years, rather than flatlining.
"The main change to the underlying numbers was a significant downward revision to the household savings ratio over the past couple of years. Though still high relative to pre-pandemic norms, the savings ratio no longer looks quite as extreme, so the scope for dis-saving to support the consumer recovery looks more limited than previously thought," says Matt Swannell, chief economic advisor to the EY ITEM Club.
Market analyst Kathleen Brooks at XTB says the Q2 figure is still stronger than the 0.2% growth rate in the Eurozone, although it is weaker than the US’s rate.
"The final details of the Q2 report shows stronger business investment and capex spending, and a lower-than-expected current account deficit, although it was higher than Q1’s level."
Also released this morning was the Lloyds business confidence barometer, which fell in September and "could be linked to next month’s Budget as business confidence in the next 12 months was higher than August, which suggests that the Budget could be weighing on confidence in the short term", she adds.
Lloyds' overall business barometer – which measures the difference between firms with positive and negative views – fell by three percentage points to a three-month low of +47%. Lloyds said a "more mixed picture" for economic optimism "points to some businesses maintaining a degree of caution".
The "worrying part" of this index was that price expectations for the next 12-months rose sharply, to its highest level in more than five years, Brooks added.
"This suggests that businesses are hoping to put up prices in the final quarter of the year, which is bad news for consumers, and it could make life tricky for the BOE as it tries to reduce interest rates."
10.29am: Big moves in Asian markets
The Asian session earlier saw "huge volatility across the board", says market analyst Joshua Mahony at Scope Markets, which has contributed to European markets being "on the back foot".
Japan's Nikkei fell 4.8% on the prospect of tighter monetary policy and higher taxes following Shigeru Ishiba claiming victory in the leadership battle of the ruling Liberal Democratic party, with reports coming out this morning that he will call a snap election to gain a mandate to rule.
Chinese stocks continued their surge, with the Shanghai Composite index adding over 8% earlier today to bring the gains over the past week to a massive 22%.
This was off a surprise rebound in the Chinese manufacturing PMI to a five-month high of 49.8.
"Coming in the wake of the recent raft of stimulus measures announced by the PBoC and government, there is a hope that we could finally see the country turn a corner," says Mahony.
"Nonetheless, while news of fresh stimulus can help lift sentiment for markets, the continuation of this rally will necessitate an uplift in activity in the real estate and consumer segments of the economy."
10.14am: Stellantis and Aston warnings hit Europe
London and European stocks are firmly in the red this morning, with the pan-continental Euro Stoxx index down 0.7%, while Chinese stocks continued their surge, despite this having been a source of encouragement in Western markets last week.
The FTSE 100 has dropped 0.55% to 8,275, while the mid-cap FTSE 250 is down over 0.8%.
Worst of the big European benchmarks are the CAC-40 in Paris and FTSE MIB in Milan, both down around 1.45%.
The reason is a profit warning from Stellantis NV (NYSE:STLA, EPA:STLA), the maker of maker of Peugeot, Fiat, Chrysler and Jeep vehicles, which is down 13%.
On the same day that Aston Martin is also down 24% on its own warning, Stellantis cut its adjusted operating profit margin for 2024 would be between 5.5% and 7%, down from previous guidance of 10%.
Headquartered in Hoofddorp, near Amsterdam's Schipol airport (I know that thanks to a delayed stopover from KLM this summer), free cash flow will also be negative, in the range of €5 billion to €10 billion, having previously guided to a positive cashflow, similarly to Aston Martin.
Elsewhere, Germany's DAX is down 0.5% and Spain's IBEX 35 is down 0.2%.
9.38am: A London IPO?!
Applied Nutrition has confirmed that it is planning to float in London, where the company is estimated to be valued at around £500 million.
Ahead of a potential initial public offering, where it plans to raise funds from the issue of new shares as well as allowing some existing shareholders to sell some of their shares, the sports nutrition brand shared a summary of its latest accounts and said it will publish a registration document for a main market listing later today.
Chief executive Thomas Ryder said: "Since launching our first Applied Nutrition product just over ten years ago, we have demonstrated a consistent track record of delivering strong profitable growth, becoming a trusted, premium sports nutrition, health and wellness brand in an industry that continues to grow at pace."
He said the company is "only scratching the surface of our growth opportunity and this IPO positions us ideally for the next step of our development"...read more.
8.58am: House prices should keep rising, says economist
The 0.7% monthly rise in Nationwide house prices suggests that August’s 0.2% fall "was just a blip and that the recent falls in mortgage rates are supporting house prices", says Alex Kerr at Capital Economics.
"And the further declines in swap rates in September suggest there is scope for mortgage rates to fall further and for house price growth to accelerate next year."
He notes that the gain in the Nationwide index was stronger than expectations, which were for a small rise of 0.2%, and meant that UK prices rose 0.8% in the third quarter, according to Nationwide prices, following up the flat second quarter.
"The increase in the pace of house price growth chimes with the 1.2% cumulative rise in the Halifax house price index in July and August and the signals from the latest RICS survey data."
Looking ahead, Kerr expects national house prices to rise gradually over the rest of this year, with price growth rebounding more strongly next year as mortgage rates continue to fall.
"Indeed, if we’re right that Bank Rate will be cut from 5.00% currently to 3.00% in early 2026, the resulting drop in mortgage rates should boost demand and house prices should gain more momentum next year. That may mean house prices grow by an above-consensus 5.0% y/y in the year to Q4 2025."
8.46am: 3i a target for short-seller
The FTSE 100 battled into positive territory for a few minutes but is back in the red again, down 10 points at just under 8,311.
Biggest faller is 3i Group PLC (LSE:III), down 3.5% after a report at the weekend that it is a target for short seller Shadowfall Capital and Research.
Shadowfall has taken a multimillion-pound short position against the blue-chip investment trust on the basis, it says, that the largest holding in its portfolio, European discount retailer Action, is overvalued.
3i has grown strongly thanks to its majority stake in Netherlands-headquartered Action from over a decade ago, which has expanded to almost 3,000 stores across 12 countries.
The Sunday Times had the scoop, with Shadowfall, known for its role in exposing fraud at Wirecard (ETR:WDI), arguing that Action is significantly overvalued.
8.23am: Rightmove plays hardball with Murdoch
In a statement this morning, Rightmove PLC (LSE:RMV) gave some more details to refute suitor REA Group's charges that it was not engaging enough, also adding that the two companies have held face-to-face meetings, and that it has consulted with a wide array of shareholders before rejecting the fourth proposal.
It has also upped its hardball game, by refusing a request to extend the put-up-or-shut-up (PUSU) deadline, which is 5pm today, and rebutting calls for a look at its books.
As well as stating that its board again concluded that the takeover bid is "unattractive and materially undervalues Rightmove", it revealed some more behind-the-scenes information about the recent weeks, where REA has expressed its frustration about a lack of engagement.
"The Rightmove and REA teams have known one another for many years, and have had numerous interactions, including discussions around strategy and best practice as recently as June.
"Rightmove has taken every phone call that REA has made since its interest was first made public, with a level of engagement which in Rightmove's view is customary and appropriate in the context of an unsolicited and unilateral series of approaches, made to a listed company, where the possible offeror is taking an incremental and iterative approach to price discovery."
Rightmove said it has declined requests from REA to grant due diligence, considering that there is enough information in the public domain and knowledge within REA "to put forward a proposal capable of recommendation" before the PUSU deadline.
8.11am: FTSE opens lower
The FTSE 100 opened in the red, unexpectedly, on Monday, dropping around 15 points.
But it has quickly flattened off, now down just one point at just under 8,320.
Rightmove PLC (LSE:RMV) is the biggest faller, down 3.7% as it unanimously rejected a fourth proposal from the Murdoch-owned REA Group.
7.57am: House price surge
UK house prices rose at their fastest annual pace for two years in September, in a sign of the impact of falling mortgage rates on the property market.
House prices have climbed 0.7% since last month and 3.2% since last year, according to data from Nationwide, up from an annual rate of 2.4% in August and the fastest rate of growth since November 2022.
House prices, which now average £266,094, are now around 2% below the all-time highs reached in summer 2022.
7.46am: Aston Martin profit warning
Aston Martin Lagonda Global Holdings PLC (LSE:AML) has warned that profit will be lower than expected this year as fewer cars are likely to be delivered due to issues within its supply chain.
Just nine weeks after its interim results, the supercar manufacturer said disruption at suppliers had led to the late arrival of components, hitting its plans to ramp up production after a series of new models were launched earlier in the year.
Coupled with continued weak demand in China, Aston Martin said on Monday that wholesale volumes and profit would be weaker than expected for the year as a result.
7.36am: Update on Vodafone-Three deal
Vodafone Group PLC (LSE:VOD) has put out a statement to confirm that the merger between its UK telecoms arm and Three will no longer need a shareholder vote, under new UK listing rules.
The new listing rules, which came into force at the end of July, state that a significant transition can be completed without shareholder approval, provided the companies comply with enhanced disclosure requirements.
Vodafone told investors that the transaction is indeed classified as a significant transaction and that "shareholder approval will no longer be required".
It all sounds a bit autocratic and paternalistic. Some shareholders might be happy with the deal but not be happy about this sort of thing.
And also, the deal might be blocked by the Competition and Markets Authority, which earlier this month raised concerns, with a final decision expected on 7 December.
7.15am: FTSE set for positive start to the week
London’s blue chips are set to enjoy a positive start to the week, based on futures trading ahead of Monday’s opening bell.
The FTSE 100 has been called 10 points higher, building on last week’s 90-point or 1.1% uptick that saw it finish at just over 8,320.
Gains last week had in part been driven by announcements of rate cuts in China and funding from its government to reach a 5% annual growth target, which appeared to boost prospects for Asia-facing firms and commodities.
Overnight, Asian markets faced a mixed performance, with China’s CSI 300 soaring 8.7%, but Japan’s Nikkei and India’s Nifty Fifty both falling.
Back in London, attention on Monday turns to an update from Carnival PLC (LSE:CCL), ahead of reports from Tesco PLC (LSE:TSCO), JD Wetherspoon PLC (LSE:JDW) and JD Sports Fashion PLC (LSE:JD.) later in the week.
The Office for National Statistics has also released a revised quarterly estimate of gross domestic product (GDP) for the UK.