- FTSE 100 rises 25 points
- UK government promises regulatory reform to boost investment
- Bookmakers plunge on reports of new UK gambling tax
- Takeover offers upped for Mulberry and TI Fluid systems
4pm: FTSE 100 and 250 both positive
The FTSE 100 is up 0.3% at 8,277 as we move into the final straight for Monday's session in London.
Housebuilder Vistry Group PLC (LSE:VTY), bouncing back from its profit warning last week, is top of the leaderboard, up almost 4%.
Defensives including BAE Systems, SSE, Bunzl and water companies are next in line.
Biggest faller is Entain PLC (LSE:ENT), the owner of Ladbrokes, Sportingbet and Foxy Bingo, down 7.3% on the back of a report about higher gambling taxes.
The FTSE 250 has just climbed above the flat-line, up eight points at 20,773.
TI Fluid Systems PLC (LSE:TIFS) tops the mid-caps, up 20%, as it gave the nod to a fifth takeover offer from a private equity-owned rival ABC Technologies - although some analysts think it's still too low.
Ashmore, up 6%, is next, after the emerging markets asset fund manager reporting a better quarter.
3.36pm: Stellantis says UK future close to being decided
Vauxhall and Fiat owner Stellantis NV (NYSE:STLA, EPA:STLA) will decide the future of its UK factories in the "next few weeks", its CEO has said, possibly indicating an agreement around the time of the Budget.
The carmaker has been in talks with the new UK government about its zero-emission vehicle (ZEVs) sales mandate for zero-emission vehicles, having threatened to leave as the UK mandate was not sustainable.
If the UK, which has a mandate that 22% of all new car sales are ZEVs as part of its net zero policy, then "they need to help to stimulate the demand," CEO Carlos Tavares said, in a report from Bloomberg.
"We are now reaching a point where we have to make a decision, and that will happen in the next few weeks,” he said.
3.17pm: Nobel economics prize
British professors James Robinson and Simon Johnson, along with Turkish economist Daron Acemoglu, have been awarded the 2024 Nobel Prize in economics.
The Royal Swedish Academy of Sciences chose the trio for their "studies of how institutions are formed and affect prosperity", and demonstrated "the importance of societal institutions for a country’s prosperity" post-colonialisation.
The prize includes a share of 11 million Swedish kronor (£808,522).
"When Europeans colonised large parts of the globe, the institutions in those societies changed. This was sometimes dramatic, but did not occur in the same way everywhere. In some places the aim was to exploit the indigenous population and extract resources for the colonisers’ benefit. In others, the colonisers formed inclusive political and economic systems for the long-term benefit of European migrants," the Nobel prize committee said in a statement.
"The laureates have shown that one explanation for differences in countries’ prosperity is the societal institutions that were introduced during colonisation. Inclusive institutions were often introduced in countries that were poor when they were colonised, over time resulting in a generally prosperous population. This is an important reason for why former colonies that were once rich are now poor, and vice versa."
2.52pm: US stocks start mixed, FTSE jumps
Wall Street has got off to a mixed start, with the Dow Jones retreating from the high at which it ended last week, but the broader S&P 500 rising 0.6% and the tech-fueled Nasdaq jumping 0.9%.
The small cap Russell 2000 is up 0.3%.
Eight of the top 10 in the S&P 500 are in the green, with Nvidia a big driver for the main indices, rising 2.3%.
Holding the Dow back are falls for Caterpillar (down 3.6%), Boeing (down 2.7%), Amgen (down 1.7%) and Nike (down 1.2%).
Investors in the US seem to like the look of the FTSE, with the index climbing faster, now up 0.3%.
2.43pm: Ring-fence to be torn down
The UK will ease bank ring-fencing rules soon, City minister Tulip Siddiq has told reporters on the sidelines of the London investment summit.
Ring-fencing rules were introduced in the wake of the 2007/2008 credit crunch and financial crisis to separate banks' consumer lending operations from their investment banking arms.
There was no time scale given by Siddiq, with Reuters reporting that it would be "soon".
Lots of people to meet at the International Investment Summit today, including the Lord Mayor of London @mrmainelli.
We had a good discussion about financial literacy and inclusion, which are priorities for me as City Minister. pic.twitter.com/DLDz9jC5YP
— Tulip Siddiq (@TulipSiddiq) October 14, 2024
2.29pm: Market confidence inches higher
The FTSE 100 is pushing higher, while US futures are also shifting towards a more positive, if still mixed, open in a couple of minutes.
London's benchmark is at just over 8,265, up 12 points or around 0.1%.
In the US, Dow futures are still in the red but S&P 500 and Nasdaq futures are now both in the green, up 0.3% and 0.6%.
2.20pm: Revolut in retail push
Revolut is launching a new retail payment terminal, pitting the London-headquartered fintech disruptor in direct competition with established point-of-sale fintechs like SumUp and Square.
Following on from the launch of its first terminal in 2022, the ‘Revolut Terminal’ will support Revolut Pay, enabling over 45 million users to pay through the Revolut app.
“This is one of the major new bets that we have as a company,” Revolut’s general manager Alex Codina told CityAM.
2pm: Spanner in the TalkTalk takeover works?
Any potential takeover of internet service provider TalkTalk has hit a stumbling block after auditor Deloitte tendered its resignation after 22 years.
Although TalkTalk called it part of a planned rotation of advisers, one analyst voiced concerns over the resignation’s impact on TalkTalk’s future.
Deloitte’s resignation “reduces the chance that any company would want to take over TalkTalk”. according to analyst James Ratzer from boutique research firm New Street Research, whose comments are published in the Telegraph.
1.32pm: Recruitment slowdown amid economic uncertainty
Tying in with the government's regulatory reform promises and the overall 'on hold' feeling in the UK as businesses await the 30 October Budget, there has been a bit of a wider global slowdown on hiring amid uncertainty about the global economic outlook, according to recruiter PageGroup PLC (LSE:PAGE).
The FTSE 250-listed group reported a 13.5% fall in third-quarter gross profit, with falls in all of its main global markets, with the UK down over 13% but Asia Pacific the worst-performing market with a 16.8% decline.
"The conversion of interviews to accepted offers remains the most significant area of challenge as the ongoing macroeconomic uncertainty in the majority of our markets continues to impact candidate and client confidence negatively,” chief executive Nicholas Kirk said alongside the results.
That is the context for permanent recruitment continuing to be impacted more than temporary hiring, he said.
At the end of last week, recruitment sector rival Hays continued a streak of poor quarters, with a 15% year-on-year fall in net fees.
1.03pm: US stocks set to start in red
US stocks are set to start the week in the red, like their UK cousins have mostly done so far today.
Futures for the S&P 500 are pointing to a 0.1% fall at the open, while Nasdaq 100 futures are down 0.15% and Dow Jones futures are just below flat.
Many of the biggest of the big tech stocks seem to be expected to start higher, with premarket trading indicating Apple, Nvidia, Tesla and Meta Platforms all in the green.
This follows a positive close on Friday, where the Dow and S&P 500 made fresh record highs, at the end of a positive week with all the major indices posting gains of around 1%, and the Dow recording its fifth successive week of advances.
"Overall, the stock market is displaying significant resilience," says market analyst David Morrison at Trade Nation, who points out that volatility is on the rise with the VIX back above 20, indicating that investors are also adding hedges in the form of S&P put options.
Bond yields are also holding at higher levels, he notes, with the yield on the key 10-year Treasury note hovering around 4.10%, well above the 3.60% from this time last month.
"The third quarter earnings season has got off to a good start with positive reports from JP Morgan, Wells Fargo, the Bank of New York Mellon and Domino’s Pizza - so far, only Delta Air Lines has disappointed," he says.
This week’s big US earnings updates include Goldman Sachs, Citigroup, Bank of America, Morgan Stanley (NYSE:MS), United Health and Netflix.
There are no reports due out today and the US bond market is closed for Columbus Day.
12.37pm: Monzo valuation confirmed
Monzo has risen to a £4.5 billion valuation, confirming reports from last week.
The valuation was used as part of an employee share sale, where staff were paired up with large investors keen to increase their stake in the digital challenger bank.
Monzo, which this summer hailed a first full year of profitability, says the sale has provided additional liquidity to employees while enabling investors to buy into its equity.
Since being founded in 2015, Monzo has secured close to $2 billion in primary funding from investors including Google's CapitalG, Tencent and Passion Capital, including $600 million this year.
Monzo, along with the likes of Revolut, Starling Bank, eToro, SumUp and OakNorth are expected to be a rich source of IPOs in coming years as private equity investors cash in.
12.19pm: Mixed trading in Europe
Just past midday, the FTSE 100 continued to hug close to the flat-line, little moved at 8,248, down less than 0.1%.
Across the Channel, France's CAC-40 is down 0.4%, while in Germany the DAX is up 0.2% and the Spanish and Italian IBEX 35 and FTSE MIB benchmarks are also higher, both up 0.4%
The pan-European Euro Stoxx 600 is just below flat, down less than a full point, top risers being Dutch life sciences group Argenx and French video games maker Ubisoft, while top fallers are London-listed bookies Entain and Flutter.
Among the London mid-caps, with the FTSE 250 down 0.2%, bottom of the fallers is Raspberry Pi, down 4.1%, followed by Close Brothers.
Top of the 250 is TI Fluid Systems (TIFS) after its takeover offer news earlier, up 19.5%.
Analysts at Jefferies say the 200p offer is "now in line with what we see as a minimum acceptable offer price", having previously said they saw 200-245p as a sensible offer range, valuing the company in line with EU peers at the bottom end, and in line with EU & US peers at the top end.
However, they note that auto industry conditions have deteriorated further, so they see 200p as "still undervaluing the company, given TIFS' favourable margin, growth & FCF profile/outlook relative to peers".
Next best riser is Ashmore Group (LSE:ASHM) PLC, which reported an increase in its assets under management in the past quarter, suggesting the appetite is improving for investing in emerging markets.
11.40am: Investors turned off ESG investments after bad performance
Environmental issues are being overtaken in importance for investors by governance issues, according to research by the Association of Investment Companies (AIC).
Among older (aged 65 and older) investors, 31% felt ESG is “woke”, but among the more enlightened younger generations this falls to only 13% for those aged under 45.
The number of private investors who admit to considering environmental, social and governance (ESG) issues when investing has dropped for the third year in a row, with 43% of investors considering themselves “fans” of ESG investing, down from 60% in 2021, 51% in 2022 and 50% in 2023.
This may have been influenced by the performance of some ESG-focused funds and stocks in the past few years, as many have suffered amidst the higher rates of interest.
The AIC noted comments from one investor, who said: “I want to do good, and I understand ESG from that point of view, but it has to be a balance between that and getting returns. That is why we invest.”
11.12am: Green investment confirmed
Other investments have also been unveiled at today's summit, though ministers have acknowledged that much of this is not new today.
Investments confirmed today by Number 10 include from Spain's Iberdrola, which has doubled its planned investment for the next four years up to £24 billion.
Denmark's Orsted is "unlocking" £8 billion and GreenVolt £2.5 billion in offshore wind farms, though this is confirmed on the back of the successful offshore wind auction last month.
SeAh Wind UK, an arm of Korean giant SeAh, announced £225 million to build a wind technology manufacturing facility in Teesside.
It was noted that since the election, the government has launched Great British Energy, overturned the nine-year ban on onshore wind and held what it said a renewable energy auction round that was "the most successful ...in history".
11am: £21bn of investment unveiled
Around £100 billion of investment has been pledged on the sidelines of the International Investment Summit being held by the government today.
Among that, Macquarie, a major investor in UK water companies and other utilities, has unveiled plans to pump £20 billion into its UK infrastructure portfolio, including support for England’s first reservoir in 30 years in the South-East, plus offshore wind, battery storage, gas transmission and broadband projects.
The Australian group also unveiled plans to invest in 650 electric vehicle charging points across its chain of Roadchef motorway service stations.
DP World has confirmed this morning its £1 billion investment in the London Gateway container port, after some behind-the-scenes efforts to diffuse a reported row.
DP chairman Sultan Ahmed bin Sulayem said: “I am proud of this major investment which underlines DP World’s long-term commitment to the UK.”
10.37am: Starmer promises to 'upgrade' regulatory regime
Keir Starmer is now speaking to an audience of big businesses and investment groups at London's Guildhall.
The PM's inaugural speech at the summit includes a pledge to "rip out the bureaucracy that blocks investment", including housebuilding, construction of data centres, warehouses and electric grid connections, and will "do everything in my power to galvanise growth including getting rid of regulation that needlessly holds back investment."
The Prime Minister says the government will "upgrade the regulatory regime to make it fit for the modern age, making Britain fit to harness all opportunities", including asking the Competition and Markets Authority to prioritise growth, investment and innovation.
"We've got to look at regulation where it is needlessly holding back the investment, to take our country forward."
One of the major tenets of the general election pitch was that Labour tried to emphasise it would offer a more stable government (somewhat undermined by a loss of direction in recent weeks), and the PM says: "It’s not just that stability leads to growth – though we all recognise that. It’s also that growth leads to stability."
LIVE: Keir Starmer’s speech at the International Investment Summit https://t.co/zVjxu5Jyyd
— Keir Starmer (@Keir_Starmer) October 14, 2024
10.10am: UK investment summit
For those after more details on the government's investment summit, I can tell you it's an all-day event being held at London’s Guildhall, before select attendees don their best duds for an evening reception at St Paul’s Cathedral hosted by King Charles.
The event will include speeches from prime minister Keir Starmer and chancellor Rachel Reeves.
Starmer will also hold a conversation on stage with ex Google boss Eric Schmidt where GSK boss Emma Walmsley will be in the role of moderator, directing questions about how the UK can seize the opportunities of AI to drive growth and productivity.
Reeves will take the stage with Aviva boss Amanda Blanc in a panel discussion apparently including Larry Fink, chair of investment giant BlackRock, Universities Superannuation Scheme CEO Carol Young, and Brookfield Asset Management (TSX:BAM, NYSE:BAM) CEO Bruce Flatt.
For health sector investors, there is also a session called 'unlocking the UK’s health data assets to deliver innovation' that will feature the chief executive of NHS England, the head of research at Google’s DeepMind AI division and chairman of US pharma giant Eli Lilly.
Ticking the green energy box, the panel discussing decarbonising the National Grid will include the chief executive of Octopus Energy and the managing director of Australia’s Macquarie Group.
9.58am: 'Man who catch rocket with chopstick accomplish anything'
Did you see the SpaceX rocket action from the weekend?
The moment when the reusable Starship system's Super Heavy booster rocket is successfully caught by giant robotic arms, known as "chopsticks", was accomplished at the first attempt.
Among the major investors in the company is Scottish Mortgage Investment Trust PLC, where SpaceX represents 4.6% of its portfolio.
The SMT shares are down 1.1% this morning though, which is probably more to do with the 8% fall in Tesla shares on Friday. Tesla is a 4.2% chunk of the FTSE 100 investment trust's portfolio.
9.39am: Port investment
One of the companies at the UK's International Investment Summit will be port operator DP World - although this would have been in doubt on Friday, when it was reported to be ready to boycott the event after comments by two senior government ministers.
The Dubai-based logistics giant, owner of ferry company P&O Ferries, was described by transport secretary Louise Haigh as a rogue operator and accused by Deputy PM Angela Rayner of “manipulation as an employer” after it sacked 800 workers via video call and rehired cheaper workers two years ago.
DP World apparently was prepared to scrap a £1 billion port investment on the back of the comments but this is now expected to still be one of the major announcements later today.
9.16am: Stability on offer for investors
The government has pledged to "hardwire stability for investors" through a new industrial strategy and "rip out bureaucracy" for businsses.
These are some of the soundbites emerging from today's International Investment Summit today, what is being described as the UK's first industrial strategy in seven years.
Eight growth sectors will be in focus, the government says: advanced manufacturing, clean energy, creative, defence, digital, financial, life science and professional service sectors.
An interim industrial strategy advisory council, chaired by Microsoft UK chief executive Clare Barclay, will also be set up in partnership with firms, unions and stakeholders.
“Our modern industrial strategy will hardwire stability for investors,” business secretary Jonathan Reynolds said, giving investors "the confidence to plan not just for the next year, but for the next 10 years and beyond".
8.57am: BA cancellations
British Airways owner International Consolidated Airlines Group SA (LSE:IAG) and Rolls-Royce Holdings PLC (LSE:RR.) shares seem to be down on news about delayed aircraft parts.
IAG said on Friday that it has changed its flight schedule because of delays in the delivery of engines and parts from Rolls-Royce, particularly those for the Trent 1000 engines used by its 40-strong fleet of Boeing 787 aircraft.
"We've taken this action because we do not believe the issue will be solved quickly," a British Airways spokesperson said in a statement to Reuters, adding that most affected passengers were offered a flight on the same day.
The Financial Times said BA was cancelling hundreds of winter long-haul flights due to the delays.
8.49am: Stocks on the up
The FTSE 100 has climbed out of its early Monday morning depression and is trying to put a brave face on it, climbing 16 points now to 8,269.5.
Among the risers are five of the top six largest companies, with AstraZeneca up over 1%.
Shell PLC (LSE:SHEL, NYSE:SHEL) has also moved out of the red despite crude oil prices remaining down 1.5% at $77.82 a barrel. BP PLC (LSE:BP.) meanwhile remains down slightly.
Top of the blue-chip leaderboard is Bunzl PLC (LSE:BNZL), the distributor, up 1.85%, followed by renewable energy group SSE PLC (LSE:SSE) and housebuilder Vistry Group PLC (LSE:VTY).
Aerospace and defence pair BAE Systems and Melrose Industries are also up 1.4%.
8.35am: Takeover boosts
Mulberry Group (AIM:MUL) has surged 20% higher on the news of Frasers' hiked takeover bid from Friday.
However, the shares have come back a bit as traders mull the complicated handbags-at-dawn situation, with major shareholder Challice of Singapore saying it is not interested in selling.
Over at TI Fluid Systems PLC (LSE:TIFS), the 20% jump int he shares has been maintained at just under 183p, which is well below the 200p offer price from its private equity-backed suitor.
8.24am: Gambling tax report
More information on the gambling tax reports that have slammed the listed bookmakers and casino operator Rank Group PLC (LSE:RNK).
Investors are reacting to news that the industry could be hit with a £3 billion tax raid in the Budget later this month.
Proposals have been suggested by a pair of influential thinktanks to double some taxes on online casinos and bookmakers, it was reported at the weekend in the Guardian.
The new measures are backed by major Labour donor Derek Webb, a campaigner for tighter gambling industry regulations.
8.11am: FTSE 100 opens lower
The FTSE 100 has dropped 12 points to 8,242 in early trading.
Oil heavyweights are down, miners are mixed, while airlines are acting as a drag.
Biggest faller is Ladbrokes owner Entain PLC (LSE:ENT), down 15%, with outside the bue-chip ranks Paddy Power owner Flutter is down 8% and William Hill owner Evoke PLC (LSE:EVOK) is down 13%.
7.59am: Wages and inflation on the mind
This week is the busiest of the month for UK economic data releases, says market analyst Kathleen Brooks at XTB, "and the impact on the pound will be watched closely".
Against the US dollar, stirlign has tanked since the end of September from $1.34 to $1.3050, where it has found some support.
"This week’s UK economic data will test that support level and see how far the selling interest in the pound will go," says Brooks, eying Tuesday's labour market data where wage data could generate the biggest market reaction as traders expect pay growth to moderate to a 3.7% annual rate from 4% in July.
"If analysts are correct, then this would be the first sub-4% reading for wage growth since 2020. It may also signal that inflation in the UK is now under control, which would support further interest rate cuts from the Bank of England."
Inflation on Wednesday will be the most important determinant of the BoE’s next move, Brooks and many others think, where last month's CPI rate is expected to moderate to a 1.9% annual rate from 2.2% in August.
"If estimates are correct then this is a big milestone for the UK, as it would be the first reading that is below the BOE’s target 2% rate since 2021, and it would also be a sign that the BOE’s fight with inflation is over."
Brooks notes that the biggest response to CPI data has been more keenly felt in the bond market in recent months.
Also in macro news this week there is an ECB decision on Thursday .
7.40am: A Fluid situation
TI Fluid Systems PLC (LSE:TIFS) has rejected a second and a third and a fourth bid from Canadian rival ABC Technologies but would be minded to accept a fifth, priced at 200p per share.
The UK car parts maker said that after it rejected "highly preliminary" cash bids from its private equity backed peer at 165p and 176p almost a month ago, ABC Technologies since submitted proposals priced at 188p and 195p per share, which were also rejected.
ABC, which is owned by private equity giant Apollo, lately submitted a bid at 200p per share, subject to due diligence.
TI noted that this was 53% higher than its closing price of 130.4p the day before the first bid and 37% above when it first publicly acknowledged its rejection of the initial bid.
7.22am: Mulberry directors take advice after Frasers offer
There's some M&A news to liven up a quiet start to the week, with updates on the offers for Mulberry Group (AIM:MUL) and car parts manufacturer TI Fluid Systems PLC (LSE:TIFS).
Let's start with Mulberry, whose second-largest shareholder, Mike Ashley's Frasers Group PLC (LSE:FRAS), made a 150p-per share offer on Friday evening, a large premium to the 100p at which the handbag maker raised £10 million earlier in the week.
Mulbery's board says it is "working with advisers to consider the company's position".
Over the weekend, the company's majority shareholder Challice Ltd, which owns a 56.4% stake, said it "has no interest in either selling its Mulberry Shares to Frasers or providing Frasers with any irrevocable or other undertaking"...read more.
7.16am: FTSE 100 to start on back foot
The FTSE 100 is expected to open the week on the back foot, as Monday sees the government host hundreds of multinationals in a business summit where Keir Starmer will reportedly promise to "rip out bureaucracy" to help investment.
London's blue-chip index has been called 10 points lower on futures markets, having finished last week at 8,253.65.
Monday's financial diary is a quiet one, but there is more in store later in the week, including key inflation and jobs market updates, some larger company news from the Square Mile and the start of the US third-quarter earnings season.
Business pages this morning are dominated this morning by reports previewing the Prime Minister's speech, where leaked sections indicate he will unveil private-sector commitments to invest more than £50 billion into the economy and his government's pledge to "end chop and change" over policy to allow companies to back new projects in the UK.