- FTSE 100 falls 66 points
- HSBC jumps as profits beat forecasts
- UK shop price inflation falls for third month in a row
- Mortgage lending hits two-year high
4.50pm: FTSE 100 closes well down
London's blue chips fell 66 points over the course of Tuesday to close out the day at 8,219.
4.02pm: European stocks in the red, US in mixed
London and European stocks are falling lower and US stocks are climbing higher, mostly.
The FTSE 100 is now down 63 points or 0.8% at 8,222. The FTSE 250 is down 186 points or 0.9%.
Germany's DAX is down 0.2% and France's CAC 0.6%.
Meanwhile, across the pond, the S&P 500 is up 0.2% and the Nasdaq is up 0.5%.
Gains of 1% and above for Google parent Alphabet Inc (NASDAQ:GOOG), which reports earnings tonight, along with Meta Platforms and semiconductor groups Broadcom and AMD are helping power the tech-heavy index.
The Dow Jones, however, is down 0.1% due to falls for the likes of Home Depot, Coca Cola and Chevron, while the small-cap Russell 2000 is down 0.5%.
3.36pm: Adidas deal with Kanye West explained
Adidas has reached an out-of-court settlement with rapper Kanye West, who now goes by the moniker Ye, with no money changing hands in the agreement.
The sportswear company's operating profits saw a boost of around €100 million from the unwinding of provisions relating to the outstanding legal issues.
On a conference call with media, Adidas CEO Bjørn Gulden said there were "tensions on many issues" but in the end, both sides agreed that "we don’t need to fight anymore and withdrew all the claims".
Adidas ended the company's Yeezy trainer deal with the rapper two years after he fired off a string of antisemitic remarks on social media.
3.15pm: BP plans to sell stake in solar arm Lightsource BP
A detail in the BP PLC (LSE:BP.) results highlighted by Reuters is that the oil group spun off part of the US operations of its Lightsource BP solar joint venture shortly before completing the acquisition of the outstanding 50% stake in the business last week.
It said in its results that 2.4 gigawatts of Lightsource BP's operational and construction assets in the US were transferred into a new joint venture between BP and the Lightsource BP founders and certain management.
This was agreed following the drop in valuations for solar projects in the US, a source told the newswire.
Chief financial officer Kate Thomson told Reuters that BP planned to sell a stake in Lightsource BP to investors to help reduce BP's investment burden and debt in the business.
2.55pm: Pound gains ground
As well as gold breaching a new record high, the pound is strengthening too.
Sterling is up 0.2% against the dollar to $1.2999 and 0.3% versus the euro to £0.8311.
2.42pm: Gold hits new high
The price of gold has hit a fresh all-time high just above $2,770 per ounce.
Gold's up 34% so far this year, the yellow metal's best performance since the turn of the millennium.
It eclipsed the high from last Wednesday, with traders pointing to US election uncertainty on top of the geopolitical and other factors.
The "prospect of a Trump 2.0", as it may bring greater policy disruption, trade tariffs and increased geopolitical risks, was mentioned as a key factor by analysts at Saxo Bank.
2.25pm: US investors most bullish since the 80s
US investors are the most bullish on stocks since records began, according to the Conference Board's latest report, as consumer confidence rose to a nine-month high.
October's US consumer confidence index climbed to 108.7 from an upwardly revised 99.2 last month, much higher than the reading of 99.5 expected and leaves sentiment at its strongest since January.
The share of consumers expecting stocks to rise over the next 12 months increased to 51.4%, the highest reading since the Board started asking the question in 1987, the year of the Black Monday crash.
Likewise, the number of consumers expecting a recession over the next 12 months also fell to its lowest level since the question was first asked two years ago.
2.14pm: ...Wall Street recovery
Early US stock losses are mostly erased, but European markets are now swathed in red.
The FTSE 100 is down 0.4% at 8,253, Germany's DAX has fallen 0.2%, France's CAC 40 by 0.3% and Spain's IBEX 35 0.7%.
The pan-continental Euro Stoxx 600 is down 0.24%.
1.46pm: Wall Street wobble
US stocks indices have fallen in early trades, with the Dow Jones down over 100 points and the S&P 500 by 20 points, both down around 0.1%.
Losers included carmaker Ford, down 9%, and homebuilder DR Horton, down 11%, both on the back of earnings that disappointed.
Stanley Black & Decker was down 11% after it posted quarterly sales that missed forecasts, though it tightened its profit outlook.
1.10pm: Hunt looks to duck scrutiny of his 'black hole'
Shadow chancellor Jeremy Hunt is trying to block a report by the Office for Budget Responsibility (OBR) due to be released alongside the Budget tomorrow.
The OBR report is examining his own fiscal statement from March this year, when he was in the 11 Downing Street seat, providing a detailed breakdown of the alleged £22 billion fiscal "black hole" that Labour chancellor Rachel Reeves claimed had been left by the previous government.
Hunt called the report "highly-political" and said it would be "deeply problematic for perceptions of the impartiality of the Civil Service" if the OBR releases it on the same day as the Budget.
In a tweet he shared a letter written to the Cabinet Secretary calling for the timing of the review's publication to be re-examined in case it is used as a “political weapon".
The OBR must be politically impartial and the public and markets need to know that it is holding the government to account without fear or favour.
I have written to the Cabinet Secretary to ask why basic rules of fairness are not being followed. If we are to keep the OBR out of… pic.twitter.com/iUsDEQTduA
— Jeremy Hunt (@Jeremy_Hunt) October 29, 2024
12.42pm: US stocks heading lower
Confidence in London's blue-chip index seems to have been knocked by US stocks heading for a stumbling start, though European stock markets are little changed.
Futures are pointing to a 0.2% decline for the S&P 500 and 0.4% for the Dow Jones, with Nasdaq futures down less than 0.1%.
McDonald's Corp (NYSE:MCD, ETR:MDO) shares are down 2.2% premarket after reporting a 1.5% drop in third-quarter global comparable sales, despite US sales rising 0.3%.
Pfizer Inc (NYSE:PFE, ETR:PFE) is up only 1% premarket even though earnings smashed expectations and the full-year outlook was lifted as the drug giant benefitted from sales of its Covid vaccine and antiviral pill Paxlovid.
Shares in Ford Motor Company (NYSE:F) are heading down 6.7% after earnings posted after the close yesterday, where the carmaker trimmed its full-year earnings outlook.
Ford's UK office staff are to go on strike tomorrow over a dispute about pay and contract changes, with the Unite union saying the US company has failed to offer its workers a permanent pay increase.
12.20pm: Footsie in the red
The FTSE 100 has dropped into negative territory, down 0.1% to 8,277, with three-quarters of the index currently in the red.
Biggest fallers are Airtel Africa, down 4.7%; Melrose Industries, down 3.3%; JD Sports and BP, both down 2.6%; and Rolls-Royce, down 2.2%.
And the FTSE 250, which has been in the red for most of the morning, is now down 158 points or 0.8% to 20,676.
11.56am: Aquis JV with Cboe
Aquis Exchange and Chicago options exchange group Cboe are teaming up to try and become the EU’s main source of equity trading data.
The exchanges are forming a joint venture that will "explore" a bid to run the 'consolidated tape' in for the EU.
Consolidated tapes, which are a single source of market data such as prices and volumes across the market for selected asset classes, have been used by US markets for years.
The EU is starting a process to select an equities tape provider next summer, with a decision expected by the end of 2025. The UK has similar plans for fixed income and equities tapes.
Aquis and Cboe noted that together they process "over half of daily European equity trades", so hope to fit the bill as the provider.
11.40am: Oil prices rebound
Oil prices are heading back up again.
Could it be Ukraine president Zelenskyy talking about the "internationalisation" of the war with Russia after he called South Korea's president Yoon Suk Yeol to discuss “the involvement of North Korean military forces in Russia’s invasion of Ukraine”.
He said in a tweet that 3,000 North Korean troops have been deployed to Russian training grounds near the combat zone, with their presence expected to increase.
"The conclusion is clear—this war is becoming internationalized, extending beyond two countries," he said.
Meanwhile, Iran says it has tripled its military budget for next year.
Brent crude oil is up 1.6% to $72.54.
Market analyst Kenny Polcari at SlateStone Wealth says this is due to traders "hoping for more Chinese stimulus (that has not been confirmed) and on the hopes that the Saudi’s will not raise production into year-end – given that there is already a supposed global surplus".
And he says if Trump wins "and opens the spigots – then get ready for more oil to hit the markets" and for prices to head lower.
11.05am: Savings impact from Budget worries?
While Paul Dales below said Budget worries did not seem to be affecting consumers, Sarah Coles, head of personal finance at Hargreaves Lansdown said it was "worries about potential tax rises in the Budget have drawn savers to cash ISAs in huge numbers", attracting £31.8 billion since April, with £3.9 billion added to savings last month.
"So much talk about bigger tax bills has focused people’s minds on the savings they can make with the cash ISA.
"At the same time, the prospect of income tax thresholds potentially being frozen for longer means more people moving into higher tax brackets, so savers are worried that could be hit with a tax bill on their savings."
But she noted that "the pendulum may have swung back when we get the figures for October" in a month's time, with banks increasingly focused on raising deposits through easy access accounts, which protects them from interest rate risks if the Budget has an inflationary sting in its tail.
10.57am: Strong sales of premium alcohol
C&C Group PLC (LSE:CCR), the maker of Tennent's beer and Bulmers cider, saw lower sales in its latest half-year despite strong performances from premium bands such as Menebrea lager and Orchard Pigs cider.
Sales of Tennent’s in the UK was flat and Bulmers in Ireland was down 3.5% over the period due partly to heavy rain with higher prices helping to offset the fall in volumes at both labels.
In contrast, sales of Italian beer Menabrea rose by 17% with Orchard Pig cider up by 20%.
10.24am: Pearson embraces AI
Interesting AI angle in the Pearson PLC (LSE:PSON) results, where the educational resources company reported early "commercial benefits" from integrating this tech into its services.
In the first nine months of the year, Pearson’s AI-powered higher education tools saw over five million student interactions, resulting in double-digit growth in billings for these products.
CEO Omar Abbosh highlighted Pearson’s focus on AI capabilities and building enterprise relationships...read more here
10.15am: 'No evidence that Budget worries affecting family decisions'
Today's mortgage lending and credit update from the BoE offers "no evidence that fears of higher taxes are hampering households’ financial decisions", says Paul Dales, chief UK economist at Capital Economics.
"Although consumer confidence has fallen ahead of the Budget, there is little evidence in September’s money and lending figures that Budget worries are having a big influence on households’ financial decisions.
"More important, of course, will be what happens after the full details of the Budget are released tomorrow."
Dales said it's "possible" that some of the rise in mortgage approvals "is because buyers are aware that the Budget will reveal that the temporary rise in the nil-band thresholds for stamp duty will expire in April 2025".
But then he says, "it’s probably too early for the prospect of higher stamp duty to influence activity now. Instead, the rise in mortgage approvals probably reflects the declines in mortgage rates in recent months to 4.76% in September".
The rebound in swap rates in recent weeks may prevent a further decline in mortgage rates in October, but his view is that the BoE will eventually cut rates from 5.00% now to 3.00%, "suggesting that mortgage rates will drop to around 3.60% by the end of next year. That would allow mortgage approvals to gradually climb higher."
10.03am: Mortgage lending rises to two-year high
UK mortgage approvals rose more than expected last month, climbing to a two-year high as falling interest rates boosted housing demand.
Net mortgage approvals for house purchases rose to 65,600 in September, the highest level since August 2022, according to data published by the Bank of England, higher than the 65,000 consensus forecast.
The report also showed a £1.2 billion rise in consumer credit in September, a bit lower than the £1.4bn rise in August and slightly lower than the £1.3 billion expected, but in line with the average over the previous six months.
An £8.2 billion rise in cash in households’ bank deposits was broadly in line with the increases in recent months, with £3.9 billion of that flowing into cash ISAs accounts.
The rise in mortgage approvals comes after mortgage rates have declined in recent months to 4.76% in September, though lenders have been lifting rates again as swap rates have rebounded in recent weeks.
9.53am: Santander and the UK motor finance ruling
More on Santander, as the bank mulls the implications of last week’s UK Appeal Court ruling on motor finance loan commissions, which analysts at RBC Capital estimate could be around £1.1 billion.
While the Spanish lender published its third-quarter results this morning, but not for the UK business said: “It is not practicable to reliably estimate at this point in time the extent of any potential financial impact.
“However, Santander UK Group Holdings plc is taking time to consider the judgment and the potential exposure it creates for the Santander UK Group.”
UK rivals Lloyds (LSE:LLOY) and Close Brothers (LSE:CBG) have seen their shares fall 11% and 34% respectively since last week as they said Friday's rulings have raised the bar in terms of potential compensation for car loan misselling compensation.
Completion of an ongoing inquiry by the Financial Conduct Authority has already been pushed back once and analysts suggest it might now be delayed again.
9.41am: HSBC on the surge
Shares in HSBC are up over 5% now, as investors and analysts chew over what looked a strong set of results.
The performance was driven by its Wealth division, up 28%, says analyst Edward Firth at Keefe, Bruyette & Woods, along with strong new business flows in Life and robust Markets, up 13%.
He says net interest margin at 1.46% was "weak", however, down 0.16% on the prior quarter, albeit partly driven by losses on legacy securities.
Pre-provision profit of $7.8 billion was 17% ahead, with Firth saying the overall revenue outperformance implies full0year consensus upgrade of circa 5-6%.
"China stimulus is clearly supporting near term earnings and the bank offers enviable levels of cash return near term (2025-26 c.28%) as it returns CET1 towards its 14-14.5% target. However neither are likely to be sustained long term," he says.
9.25am: BP roughly in line with forecasts
BP PLC (LSE:BP.) results were a "beat", say analyst Giacomo Romeo at Jefferies, but operationally the businesses overall performed in line, with a better-than-expected performance in oil and gas production, offset by a lower contribution from the downstream activities.
The increase in debt gearing was expected, they added, "given a number of one offs" including higher cash taxes and the German offshore wind auction payment.
In the statement, BP flags that alongside final results in February it will review financial guidance, including expectations for 2025 share buybacks.
"This should not come as a surprise, as consensus numbers are already reflecting a buybacks cut to ~$4-5bn (from the $7bn implied in the current outlook)," Romeo says.
9.06am: Small and mid-cap movers, and Trump
One of the biggest fallers on the LSE this morning is IQE PLC (AIM:IQE), down almost 16% this morning after is announced that its chief executive has left the company with immediate effect.
Shares in the semiconductor wafer specialist have more than halved in the past few months following a warning that some markets were not recovering as expected and that its performance would be at the lower end of expectations this year.
Following the departure of CEO Americo Lemos, Mark Cubitt, the former Wolfson Microelectronics finance chief who joined the IQE board earlier this month as chair-elect, will become executive chair...read more
Elsewhere among the small caps, Touchstar PLC, the mobile data solutions provider, has dropped 23% after warning that revenues are likely to fall below previous forecasts due to delayed orders and slower conversion times.
A shift in customer behaviour towards “just in time” purchasing was noted, reducing previously aggressive order volumes.
Additionally, a major order expected for 2024 delivery has been postponed to 2025, affecting this year’s profit outlook.
If you want more positive news, IG Design Group PLC shares are up 5% following its announcement of expected profit recovery in the second half of the year.
An even bigger rise was seen overnight, as Trump Media & Technology Group Corp (NASDAQ:DJT) shares surged over 21% in afterhours trading, with conservative video platform Rumble climbing nearly 15% in tandem, as investors showed confidence in Donald Trump’s election chances following his controversial Madison Square Garden rally.
Shares in the Truth Social platform now sit at their highest level since June, up roughly 240% from September lows.
8.48am: European shares mostly higher
Up 23 points or almost 0.3%, the FTSE 100 is not the only blue-chip index in green in Europe this morning.
The DAX and FTSE MIB are up 0.3% in Frankfurt and Mile, while in Paris the CAC-40 has gained over 0.4%.
In Madrid, the IBEX-35 is just below flat for the sole red number among the group, due to a sharp fall for steel producer Acerinox.
Banco Santander is also down 2.7% despite publishing group results that beat expectations, but delaying the publication of its UK arm's results as it assesses the impact of Friday's court ruling on motor finance commissions.
Elsewhere, German sportswear group Adidas AG reported strong results led by 14% growth in trainers and other footwear, though online revenues were dragged down by the ongoing Yeezy unwind.
8.31am: Retail investors looking overseas
Results from Hargreaves Lansdown PLC (LSE:HL.) show its retail investment platform saw increased customer inflows into tax-advantaged accounts like SIPPs and ISAs over the past three months thanks to anxiety over tomorrow’s Budget.
Though there were £0.3 billion of outflows from the platform, assets under administration ended the quarter modestly higher at £157.3 billion, with net new business of £0.5 billion, and new Active Savings flows of £0.8 billion.
Net client growth of 18,000 took the total number of active clients to 1.9 million, with retention at 92%, similar to last year, although asset retention slipped to 88.6%.
This led to a 16% rise in share dealing volumes (with overseas shares now accounting for around 20% of total volumes) and a 7% increase in total revenue.
The shares are little moved, as the proposed acquisition by a private equity consortium has been approved by shareholders and is awaiting regulatory approvals, though elsewhere in the sector St James's Place PLC (LSE:STJ) shares are down 3.4%.
8.10am: FTSE opens higher
The FTSE 100 has ambled out of the blocks with a climb of 18 points to 8,304.
HSBC Holdings PLC (LSE:HSBA) is the top riser, up over 3% so far on the back of its better-than-expected quarterly profits and new share buyback.
Fellow Asia-focused lender Standard Chartered PLC (LSE:STAN) is up 1.7% thanks to investors reading across for similar potential results.
After its results, BP PLC (LSE:BP.) is down 0.8%, though shifting oil prices are also a factor.
7.58am: Watching oil and bonds
Oil prices have continued to fall this morning, with Brent crude dropping 0.2% to just over $71, following a 6% fall yesterday.
The fall at the start of the week coincided with a rise in bond yields, which normally would put pressure on stock markets.
Deutsche Bank macro strategist Jim Reid linked the move in bonds to the fact that with only one week to go to the US election, prediction, betting and financial markets are increasingly leaning towards a victory for Donald Trump.
Yesterday saw 10yr US yields rise 4.2 basis points, not helped by a pair of softer Treasury auctions, while the Trump Media & Technology Group Corp (NASDAQ:DJT) rose 21.59% to its highest level since June and Bitcoin has traded at $71k overnight, also the highest level since June.
"The momentum has shifted a reasonable amount over the last couple of weeks," says Reid this morning, with prediction models putting Trump at a 54% probability to win
"The recent Treasury sell-off also likely incorporates the increased probability of a Republican clean sweep, and potentially unconstrained fiscal power."
He says it is "very rare to see such a big rise in US yields on a day that oil fell as much as it did", with oil in its largest single day fall since August 2022, which Reid says was the reason for the broad gains for stocks.
The moves in Treasuries were fairly uniform across the curve with 2yr yields and 10yr yields at their highest levels since August 1 and July 24, respectively.
"So some signs of investors being more price sensitive in their exposure to Treasuries. Showing how this was perhaps more of a fiscal story or supply story yesterday, rather than an inflation one, at least as a first order effect," says Reid.
7.49am: HSBC beats expectations
HSBC Holdings PLC (LSE:HSBA) has posted higher profits than forecast for the third quarter and put a cherry on top in the shape of a $3 billion share buyback.
Following new chief executive Georges Elhedery's significant structural changes announced last week, Europe's largest lender reported a pre-tax profit $8.5 billion, well ahead of the $7.6 billion consensus estimate.
Elhedery said it was "another good quarter, which shows that our strategy is working" and added that his structural changes will start to be implemented "immediately", with further details to be shared as part of a business update alongside full-year results in February.
Revenue increased 5% to $17 billion thanks to higher customer activity in the Wealth business, supported by volatile conditions generating more business in its markets division.
The buyback and a third interim dividend of $0.10 per share added up to $4.8 billion of distributions for the third quarter, bringing total shareholder distributions announced to $18.4 billion so far in 2024.
7.34am: BP profits fall
Among the slew of results this morning, BP PLC (LSE:BP.) has reported lower profit and cash flow from a year ago as chief executive Murray Auchincloss said the plan for the next decade is to grow its core oil & gas business "with a focus on value over volume".
He also said the board has “a deep belief in the opportunity afforded by the energy transition”, and the company will "continue high-grading our investments to ensure they compete with the rest of our business”, suggesting BP will be more selective in prioritising what projects it pursues away from oil & gas.
The FTSE 100-listed oil group reported $2.3 billion of underlying replacement cost profit for the third quarter of 2024, down 31% compared to a year earlier.
Cash flows of $6.8 billion were down from $8 billion-plus in the prior quarter and a year ago, allowing a dividend of $0.08 per share and a $1.75 billion share buyback to be announced...read more
7.17am: FTSE 100 tipped to start higher after more inflation good news
The FTSE 100 has been tipped to start Tuesday on the front foot, as it finished the day before, following gains for Wall Street overnight and with more big London companies announcing results today.
Futures for the Square Mile's blue-chip benchmark were pointing to a 20-point rise, to add to the almost 37 points added yesterday that left the index at 8,285.6.
That was despite a sharp fall in oil prices yesterday, a 6.1% fall for Brent crude, after Israel’s weekend strikes on Iran were focused on military targets rather than any oil facilities.
Overnight, the S&P 500 rose 0.3%, with 70% of its constituents higher on the day, with the Nasdaq also rising 0.3% and the Dow Jones climbing 0.65%.
Asian markets are mixed, with Japan's Nikkei up 0.8% and Hong Kong's Hang Seng rising 0.3%, but India's Sensex down 0.15% and the Shanghai Composite tumbling 1.1%.
Back in the UK, a report released overnight from the British Retail Consortium showed shop prices falling at their fastest pace in more than three years, adding to pressure on a Bank of England rate cut at next week's meeting. Prices were down 0.8% on October last year, following a fall of 0.6% in September.