- FTSE 100 up 34 points
- Melrose soars to lead risers
- Shell, BP drop as oil sinks
3.59pm: FTSE 100 set for positive start to week
London’s blue chips entered late trading on the front food, having climbed by 34 points to 8,283 over the course of Monday.
Though a slump in oil prices over the day placed BP PLC (LSE:BP.) and Shell PLC (LSE:SHEL, NYSE:SHEL) among the day’s losers, a 10.2% jump in Melrose Industries PLC (LSE:MRO, OTC:MLSPF) shares helped offset declines.
This came after the aerospace manufacturer updated on its risk and revenue-sharing partnerships during the day, which Citi analysts said helped provide an understanding of the company’s potential cash flow ahead... Read more
Other risers included easyJet PLC, which gained as falling oil prices raised the prospect of lower fuel costs ahead, alongside Pearson PLC (LSE:PSON), Informa PLC (LSE:INF) and Halma PLC (LSE:HLMA).
Lloyds Banking Group PLC (LSE:LLOY) led the fallers in the meantime after acknowledging a court ruling last week on motor loan commissions might see it required to pay out more than expected in compensation... Read more
3.41pm: Gold remains off record on Monday
Gold prices ticked slightly lower on Monday and remained off a record high seen early last week.
Come the afternoon, gold was trading at US$2,741 an ounce for a 0.28% drop over the day and off the US$2,758 record.
“It has lost some of its upside momentum, but that should be expected given the size of the rally since mid-February,” Trade Nation analyst David Morrison commented.
“Prices were lower in early trade this morning, but were trading comfortably above a line of support which is developing around $2,710.
“If it can continue to consolidate above this support area then further gains look probable.”
2.51pm: Melrose surges to top of FTSE 100 risers
Melrose Industries PLC (LSE:MRO, OTC:MLSPF) surged over 8% on Thursday afternoon to top the FTSE 100’s risers and help the index return to positive territory.
The aerospace manufacturing firm had provided an update on its risk and revenue sharing partnerships (RRSP), which sees aircraft engine makers paid based on flight times.
Melrose noted it now had 17 deals generating cash from a total of 19 for the likes of engine mounts and cases, which typically last the lifespan of the engines, translating to £22 billion of "de-risked" revenue for the coming decades.
“For Melrose, the dynamic of significant upfront investment but only minimal aftermarket work leads to a very high profit margin and strong cash flow,” the company said.
“Our RRSP portfolio is entering what we and our partners expect to be a multi-decade cash generation period. RRSP programme cash flows are projected to increase through to 2050.”
This included as aircraft fleet sizes increased on the back of an uptick in demand over the coming years, with Melrose highlighting maturing partnerships with the likes of Pratt & Whitney, General Electric and Rolls-Royce Holdings PLC (LSE:RR.).
Shares climbed 8.5%, aiding the FTSE 100 to a 25-point gain.
2.23pm: Retail sales volumes fall as Budget prompts caution
Retail sales volumes have declined in October following an uptick last month, the Confederation of British Industry (CBI) has reported.
The CBI Distributive Trades Survey fell from +4 in September to -6 this month, which the industry body said reflected “disappointing sales for the time of year”.
Though internet sales volumes increased, the survey showed a drop in orders placed from suppliers against October last year as volumes fell across the total distribution sector, including retailers, wholesalers and motor traders.
CBI principle economist Martin Sartorius noted some firms had reported growing caution among customers ahead of this week’s Autumn Budget.
“We are looking for reform of business rates in Wednesday’s Budget,” he said.
“The sector will be looking for a bridging solution beyond April 2025, when temporary business rates reliefs come to an end.”
Retailers were also said to not be expecting an immediate turnaround after October’s drop, Sartorius said, with the sector guiding for flat sales in November.
1.59pm: New York kicks off week on the front foot
Wall Street enjoyed a strong start to the week as trading got underway on Monday.
The Dow Jones gained 0.7% as the market opened, while the S&P 500 added 0.5% and the Nasdaq ticked up 0.6%.
This placed the Nasdaq at 18,622 and just off its record intraday high of 18,682 seen last Friday.
Though Monday marked a quieter day on the reporting front, attention was on a string of mega cap earnings later in the week, before non-farm payroll figures on Friday.
“One thing we expect to see play out is these mega cap tech names continuing to reinforce commitment to AI in tech spending broadly,” BMO Wealth Management’s Yung-Yu Ma commented.
“If for some reason we don’t get that - if a few of those tech companies reporting talk about say tapping on the brakes a little bit in some of these investments - the market would not take that well.”
Microsoft, Amazon, Meta Platforms, Apple and Alphabet all gained on Monday morning ahead of updates from each over the course of the week.
1.10pm: Oil could hit pandemic levels as Middle East tensions ease - analysts
Easing tensions in the Middle East could see oil prices return to levels not seen since the Covid-19 pandemic, analysts have said.
Benchmark Brent crude receded over 6% on Monday to US$71.32 a barrel after a strike by Israel against Iran prompted speculation that tensions could have reached a climax in the Middle East.
Following a strike by Iran earlier in the month, analysts highlighted that the attack by Israel had targeted military sites and not oil or nuclear infrastructure.
“The immediate danger of an oil supply disruption has now receded, although the risk of additional direct hostilities between Israel and Iran has not gone completely,” Trade Nation analyst David Morrison commented.
“But, despite a stern rebuke from Iranian leaders, oil traders believe that Iran is unlikely to respond directly to Saturday’s attack, and focus is back on expectations that global demand growth looks likely to ease further.”
Such concerns over demand ahead have largely prevented oil from surging as tensions in the Middle East mounted.
SPI Asset Management’s Stephen Innes noted that oil could fall to US$60 a barrel and to levels not seen since February 2021 as a result.
“If tensions cool further or peace talks unexpectedly gain traction, we could see oil slide [...] as traders shift focus back to the looming 2025 supply glut - especially if China’s economic stimulus underwhelms,” he said.
12.51pm: Nasdaq eyes another record as Wall Street set to rise
Wall Street looked on course for a solid start on Monday, with the Nasdaq appearing close to its latest intraday record ahead of a host of mega cap earnings later in the week.
Futures had the Nasdaq up 106 points ahead of the opening bell and slightly off its intraday high of 18,684 recorded on Friday.
The Dow Jones and S&P 500 were also seen 102 and 21 points higher respectively after declining on Friday.
It comes ahead of a busy week of earnings, which will see Alphabet Inc (NASDAQ:GOOG), Amazon.com Inc (NASDAQ:AMZN), Meta Platforms Inc (NASDAQ:META, ETR:FB2A, SWX:FB), Apple Inc (NASDAQ:AAPL, ETR:APC) and Microsoft Corp (NASDAQ:MSFT) among those updating.
“The Magnificent 7 tech stocks have been pulling away from the rest of the S&P 500 in recent months,” XTB analyst Kathleen Brooks noted.
“This week’s earnings releases will be key to see if this trend continues.”
Bond yields also climbed on Monday once more though, to 4.25% on 10-year treasuries, after a surge last week ahead of November’s election had pressured stocks.
“The recent gains seen for the dollar and US treasury yields highlight underlying concern as we head into an election that throws up uncertainty and likely volatility,” Scope Markets’ Joshua Mahony added.
“Nonetheless, with US indices continuing to show strength in spite of these risk-off dollar and yield indications, there is a clear sense that markets are front-running the election in anticipation of a surge in equities once the political uncertainty clears.”
12.28pm: Man U shares surge as Ten Hag sacked
Manchester United Plc (NYSE:MANU) ticked up in pre-market trading news broke Erik Ten Hag had been sacked as manager of the Premier League football club.
Ten Hag was told of the club’s board’s decision on Monday morning, having joined Man U in 2022 and had his contract extended to 2026 three months ago.
Ruud van Nistelrooy, who served as Ten Hag’s assistant, will take charge on an interim basis as a permanent manager is sought... Read more
11.50am: VW set to close German sites, axe jobs and cut staff pay
Volkswagen Group (XETRA:VOW)'s cost-cutting efforts are set to affect thousands of jobs, see staff pay cut and the closure of several factories in Germany, its union has signalled.
Workers council head Daniella Cavallo warned on Monday that the company was lining up to close at least three sites in its home country under larger-than-expected cuts.
Volkswagen was also said to be demanding a 10% cut to monthly salaries and pay freezes for the coming two years, Cavallo, who was cited by Reuters, said.
“Management is absolutely serious about all this,” Cavallo warned, “this is not sabre-rattling in the collective bargaining round”... Read more
11.21am: Households paid record £31mln for rooftop solar power
British households were paid out a record for energy generated from rooftop solar panels last year.
Almost £31 million was paid out in the year to March 2024 under schemes offering households revenue to sell energy from their rooftop panels back to the grid, according to regulator Ofgem.
This compared to £7.2 million in the previous year, as 283.1 gigawatt hours (GWh) worth of electricity was exported against 77.3 GWh beforehand.
The energy exported back to the grid from households equated to enough to power just over 88,000 typical homes for a year, Ofgem reported... Read more
10.35am: Oil heads towards $71 a barrel as drop nears 6%
Benchmark Brent crude has continued to fall over the course of Monday morning as traders mull the ramifications of Israel’s strike against Iran on Saturday.
Come late morning, Brent was trading at US$72.48 a barrel, having dropped by 5.9% for the day.
Israel had targeted military sites in a direct attack on Iran over the weekend, following a strike by the latter earlier in the month.
Scope market analyst Joshua Mahony noted the response was “relatively limited” from Israel.
“[It] appears to have drawn a line under the issue, easing fears of a wide-scale regional conflict between two military powers,” he said.
BP PLC (LSE:BP.) and Shell PLC (LSE:SHEL, NYSE:SHEL) remained among the day’s losers on the FTSE 100 on the back of the drop, as easyJet PLC and International Consolidated Airlines Group SA (LSE:IAG) gained on the prospect of cheaper fuel costs ahead.
9.41am: Trainline rallies as guidance hiked again
Trainline PLC (LSE:TRN) climbed by 9.3% on Monday morning after hiking its full-year guidance for the second time in two months.
The ticketing specialist reported a 14% year-on-year increase in net ticket sales to £3 billion and a 17% revenue rise to £229 million for the first half of the current financial year.
Adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) grew 44% to £82 million.
Trainline revised guidance following an increase just last month as a result, laying out expectations for ticket sales growth of 12-14%... Read more
9.32am: Debt concerns prompt bond sell-off
Bond yields surged on Monday morning to their highest since early July as concerns over growing debt yields weighed ahead of Wednesday’s Budget.
The yield on UK 10-year gilts climbed as high as 4.27% early on before scaling back to 4.25%, marking an increase of two basis points from Friday.
This signalled a global sell-off as yields also climbed in the likes of the US, Germany and France.
“There are some market jitters ahead of the Budget,” XTB analyst Kathleen Brooks commented, highlighting that yields on UK bonds were climbing fastest across Europe.
“It is also worth noting that sovereign bond yields are not reacting to the sharply lower oil price. This suggests that sovereign debt concerns are weighing on the bond market as we start a new week,” she added.
9.15am: Lloyds falls further after warning over motor finance court ruling
Lloyds Banking Group PLC (LSE:LLOY) fell further on Monday morning after warning a ruling last week on motor loan commissions might lead to higher-than-expected compensation.
The Court of Appeal ruled on Friday that motor dealers acting as credit brokers owe certain duties to disclose to their customers the commission payable to them by lenders and that lenders will be liable for dealers' non-disclosures.
Lloyds, in similar wording to a Close Bros statement on Friday, said this “sets a higher bar” for commissions than previously understood… Read more
Shares fell 1.6% on Monday, following Friday’s 7.6% drop, on the update.
8.58am: Starmer to warn of ‘harsh’ reality ahead of Budget
Prime minister Keir Starmer is set to lay out a stark picture of the UK’s economic state in a speech on Monday ahead of this week’s Autumn Budget.
According to the BBC, Starmer will warn of “unprecedented” economic challenges and the “harsh light of fiscal reality” whilst speaking in the West Midlands.
This comes after the prime minister has previously pointed to a “painful” Budget as the government grapples with what it has dubbed a £22 billion “black hole” in public finances.
A string of tax hikes are expected to be unveiled in the Budget on Wednesday, including higher employer national insurance contributions and an end to stamp duty relief.
Changes to UK fiscal rules have also been signalled by chancellor Rachel Reeves, fuelling speculation tens of billions of pounds worth of spending plans will be unveiled.
“We choose a different path: honest, responsible, long-term decisions in the interests of working people,” Stamer will say.
8.40am: easyJet, British Airways owner lead index higher
The FTSE 100 overcame a drop as the market opened to rise by 12 points to 8,261 on Monday morning, despite heavyweights BP PLC (LSE:BP.) and Shell PLC (LSE:SHEL, NYSE:SHEL) weighing on the index.
Though the duo faced a hit as oil prices dropped by 4%, the decline aided a boost for airlines as the prospect of cheaper fuel costs emerged.
easyJet PLC led the risers early on as a result with a 4.1% gain, followed by British Airways owner International Consolidated Airlines Group SA (LSE:IAG), up 2.4%.
JD Sports Fashion PLC (LSE:JD.) was also among the early risers, alongside NatWest Group PLC (LSE:NWG), Vistry Group PLC (LSE:VTY) and Intercontinental Hotels Group PLC (LSE:IHG).
8.24am: Oil sinks on Middle East de-escalation hopes
Oil prices slid on Monday morning as hopes built that escalations could be easing in the Middle East despite an Israeli strike against Iranian military targets over the weekend.
Benchmark Brent crude fell over 4% as trading got underway for the week to US$72.60 a barrel.
Israel hit around 20 military bases across Iran on Saturday morning, following a strike by the latter earlier in the month.
Swissquote Bank analyst Ipek Ozkardeskaya noted that the targeting of military sites and not nuclear or oil infrastructure in the latest attack had come as a relief.
“The cherry on top, Iran didn’t vow to respond, in a clear sign of de-escalation - or at least not a re-escalation - of the tensions in the region,” she added.
President Joe Biden had told reporters “I hope this is the end” in the aftermath of the strike, prompting speculation that months of escalation could finally be scaled back.
FTSE 100 heavyweights BP PLC (LSE:BP.) and Shell PLC (LSE:SHEL, NYSE:SHEL) led fallers on the index following the drop in oil on Monday morning, dipping by 1.8% and 1.9% respectively.
8.05am: House sale activity booms on income growth and falling mortgage rates
Sales activity across Britain’s housing market has hit its highest in four years thanks to income growth and falling mortgage rates, according to Zoopla.
Some 306,000 homes collectively worth £113 billion are currently in the process of being sold, marking a 30% increase year on year and fuelling the highest level of new sales since Autumn 2020.
House prices ticked up by just 1% over the year to October in comparison, as growing choice for buyers and affordability issues have kept a cap on increases.
Comparison site Zoopla said the market was on course for a “bumper year” as a result, after a spike on mortgage rates weighed on sales in 2023.
“Overall, the market remains on track for a modest 2% price increase in 2024 and 1.1 million sales,” Zoopla executive director Richard Donnell commented.
First time buyers were said to have largely driven the recovery, with Zoopla forecasting the group would account for 36% of sales over the year... Read more
7.39am: Business confidence declines ahead of Budget
Business confidence has fallen to a four-month low in October as the prospect of tax increases in Wednesday's Budget weighs on sentiment.
Lloyds Banking Group PLC (LSE:LLOY)’s business barometer showed a three-point drop over the month to 44 on Monday.
This reflected falling confidence around the economy as a whole and firms’ own trading prospects, with the drop taking sentiment further from a nine-year high seen this summer.
Chancellor Rachel Reeves is expected to lift the likes of employer national insurance contributions in the Budget this Wednesday, under plans to raise billions to fund further government spending.
The drop in Lloyds’ reading comes after separate surveys from GfK and S&P Global previously also showed business sentiment had dropped ahead of the Budget... Read more
7.15am: FTSE 100 seen higher
Futures had the FTSE 100 climbing by 35 points ahead of Monday’s open as a busy week of blue chip earnings and the Autumn Budget loomed in London.
While Monday is set to be quiet on the reporting front, BP PLC (LSE:BP.), Shell PLC (LSE:SHEL, NYSE:SHEL), HSBC Holdings PLC (LSE:HSBA) are all due to update later in the week, alongside the likes of Amazon.com Inc (NASDAQ:AMZN), Apple Inc (NASDAQ:AAPL, ETR:APC) and Microsoft Corp (NASDAQ:MSFT) from across the Atlantic.
The FTSE 100 had dropped by 109-point drop over the course of last week, with the looming Budget, this Wednesday, among factors weighing on stocks.
Overnight, Asian markets faced a mixed performance, with Japan’s Nikkei enjoying the biggest gain of 1.82%.
Benchmark Brent crude slumped on Monday morning in the meantime to US$72.86 a barrel after a strike by Israel on Iranian military targets did not prompt a vow to respond.