- FTSE 100 down 70 points at 8,070
- IAG soars as profit jumps
- Vistry slumps as cost overruns worsen
4.01pm: FTSE 100 tumbles into weekend
London’s blue chip index headed into late trading under pressure, having fallen by 70 points to 8,070.
This took the FTSE 100’s decline for the week above 100 points, or 1.3%, after a boost on Wednesday following Donald Trump’s US election victory was short-lived.
International Consolidated Airlines Group SA (LSE:IAG) continued the lead risers on the index late on, having climbed by 6.8%
The British Airways owner had unveiled a €350 million buyback on a jump in third-quarter profit earlier on in the day.
Endeavour Mining PLC (LSE:EDV, TSX:EDV, OTCQX:EDVMF) followed with a 4% gain, while Intercontinental Hotels Group PLC (LSE:IHG), BT Group PLC (LSE:BT.A) and easyJet Group PLC also ticked higher during the day.
Miners remained on the back foot in the meantime, with Antofagasta PLC (LSE:ANTO) down 6.7% ahead of Glencore PLC (LSE:GLEN), Anglo American PLC (LSE:AAL) and Rio Tinto PLC.
China’s latest efforts to stimulate its economy, which included a 10 trillion yuan (£1 trillion) package to refinance local government debt, had underwhelmed, hitting sentiment in the resources sector.
Vistry Group PLC (LSE:VTY) headed up the fallers though, after warning cost overruns in its South division would hit profits by more than first thought over the coming three years.
3.27pm: This week's junior risers
UK-based green hydrogen technology and manufacturing company Clean Power Hydrogen PLC (AIM:CPH2) saw a 25% lift to its valuation after signing a licence agreement with Hidrigin, allowing the Irish company to use Clean Power’s IP-protected Membrane-Free Electrolyser.
Hidrigin has secured €100 million in funding to build out numerous renewable energy developments and Clean Power shareholders evidently expect it to reap some of the benefits.
Here's a look at some of the biggest risers on the AIM junior market this week
AFC Energy PLC (AIM:AFC, OTC:AFGYF) was another top riser, adding more than 20% after unveiling an agreement to deploy the first 45kVA H-Power System into Saudi Arabia with exclusive distributor The Machinery Group (trading as TAMGO).
On the right-hand side of the periodic table, Helium One Global Ltd (AIM:HE1, OTCQB:HLOGF) confirmed the completion of its farm-in agreement with Blue Star Helium for a 50% stake in the Galactica-Pegasus helium project located in Las Animas, Colorado. Shares rallied 18%.
Bigblu (AIM:BBB) Broadband plc was the week’s biggest riser after confirming takeover interest of its subsidiary Salter Brother from Australian carrier SkyMesh.
“The transaction remains subject to final terms and financing arrangements, and there can be no certainty that any transaction will be completed,” said management. Shares rallied 61%.
B2B video streaming solutions company Aferian PLC (AIM:AFRN) added 50% after reporting that revenue is expected to increase by 20% this year.
On the topic of disposals, Christie Group PLC (AIM:CTG) announced the sale of its subsidiary Orridge Holdings to RGIS Inventory Specialists for £5 million.
15.02pm: Wall Street heads for further record highs
Wall Street enjoyed a positive start on Friday, placing stocks on course for another record-breaking day.
The Dow Jones opened 0.3% up, while the Nasdaq and S&P 500 also opened in the green on Friday, after each had hit record intraday highs on Thursday.
Gains over the week have been boosted following Donald Trump’s election win on Wednesday, which was followed by an interest rate cut by the Federal Reserve on Thursday.
“Investors wagered that a Republican administration would energise US economic growth, boost American industry, and ease restrictions on digital assets,” City Index analyst Fawad Razaqzada commented.
The S&P 500 was on course for its best weekly performance in a year as a result, having climbed by 4.6% to 5,985 as of Friday morning.
14.09pm: BoE chief economist signals Budget boost to inflation will be ‘looked through’
Huw Pill, Bank of England chief economist, has signalled further interest rate cuts could well be made and that policymakers will largely need to look past temporary boosts to inflation from last month’s Budget.
“We remain in a disinflationary process,” he said on Friday, leaving “scope for further reductions” after the Bank cut rates by 0.25% on Thursday.
He also noted it was important to focus on longer-term inflationary factors, rather than temporary drivers, such as a string of tax increases in last month’s Budget.
“To a large extent, we will have to look through and interpret [the measures in the budget] in a way that allows us to have a good sight of these underlying and more persistent components of inflation that really have to be the focus of what’s driving our policy decisions,” he said.
13.40pm: Now Asda warns on Budget costs
On the subject of costs, Asda too has warned it might have to put prices up due to the Budget, which it said will mean £100 million in extra overheads.
Stuart Rose, chairman, said it was “A big burden for business to carry”
“We are a very efficient industry, as retailers. We will do everything we can to mitigate this cost.
“But of course, you can’t deny it will probably be inflationary to some degree.
Asda has been struggling to hold its share of the UK grocery market and reported a 2.5% decline in third-quarter revenues to £5.3 billion,
Rose said: “We’ve slightly lost the plot in terms of giving (customers) what they want daily".
FTSE 100 is down 47 at 8,092.
13.05pm: Hospitality groups slump on bank downgrade
A recurring theme today is the potential impact of wage rises and national insurance hikes on company costs.
Vistry and Serco warned specifically but Deutsche Bank also sent share prices in Greggs and Mitchells & Butlers tumbling after a gloomy assessment of the impact.
Greggs is the standout change, with its rating cut to 'sell' from 'hold' with a target price now of 2,400p (2,600p previously) though pub chain Mitchells & Butlers is now a 'hold' from 'buy' (target 280p from 360p).
Wetherspoons meanwhile has had its target cut to 600p from 750p with its 'hold' rating maintained.
Last week's Budget contained several measures - on minimum wages and National Insurance - that are “disproportionately relevant” to the labour-intensive leisure sector says the bank.
While flagged beforehand, in magnitude (or structure) the bank adds that they were worse than factored into company guidance and investor expectations.
“We expect operators to raise prices but do not view this as a panacea.":
Greggs slumped 7% on the note with Mitchells & Butlers down 6% at 237p while Spoons was flat at 630p.
12.37pm: Nasdaq, Wall Street seen off the mark after Fed cut
Wall Street looked on course for a negative start on Friday as the end of busy week which saw Donald Trump claim election victory and the Federal Reserve cut interest loomed.
Futures had the Nasdaq off 0.3% ahead of the opening bell, while the Dow Jones was seen 0.1% lower as the S&P 500 appeared flat.
All three had hit intraday records on Friday as Trump’s victory, followed by the Fed’s 25 basis point interest rate cut on Thursday, sent stocks higher.
“The week saw the best possible combination for US equity bulls,” Swissquote Bank analyst Ipek Ozkardeskaya commented.
However, looking ahead, the “Fed has no choice but to dance to Trump’s tune, whether it likes it or not,” Ozkardeskaya added.
“That reality comes with the risk of higher-than-otherwise inflation and deserves careful attention.”
11.53am: British Airways leads airlines higher as analysts reiterate backing
British Airways owner International Consolidated Airlines Group SA (LSE:IAG) jumped following its update on Friday, sending shares in rivals higher.
Shares jumped 6.7% following the update, which showed operating profit up 15.4% at €2.01 billion (£1.67 billion) over the fourth quarter and a new buyback of €350 million.
Wizz Air Holdings PLC (AIM:WIZZ) gained 8.1% in the meantime, while easyJet PLC emerged as the FTSE 100's second-biggest winner on a 2% rise.
Panmure Liberum analysts noted IAG's profit, which was aided by unit revenue growth on strong demand for transatlantic and European travel, had outdone expectations.
Reiterating a ‘buy’ rating, analysts said “we anticipate upward pressure on consensus, adding IAG’s valuation had “decoupled from its financial performance”.
The market is “completely overlooking its pre-pandemic track record of superior return on invested capital,” Panmure said, “which it has resumed”.
eToro analyst Mark Crouch echoed the view, noting that “psychological rather than fundamental” factors had prevented IAG shares from returning to pre-pandemic levels.
“The fact IAG waited so long to reinstate their dividend, while frustrating for shareholders, demonstrated strict capital discipline,” he said.
“This morning’s announcement [that] IAG plans on buying back €350 million of its own shares suggests the business is well and truly back to firing on all cylinders”... Read more
11.14am: Vistry, Serco latest to warn on Budget national insurance hit
Vistry Group PLC (LSE:VTY) and Serco Group PLC (LSE:SRP) have become the latest to warn over surging costs due to higher taxes following last month’s Budget.
Outsourcing firm Serco signalled in results on Friday that higher employer national insurance contributions (NIC) would cost its £20 million.
Housebuilder Vistry said it was in line for a £5 million hit from the higher tax burden in the meantime.
This comes after chancellor Rachel Reeves announced employer NIC would rise to 15% on salaries above £5,000, against 13.8% on those over £9,100 currently, in the Budget.
J Sainsbury PLC (LSE:SBRY), Marks and Spencer Group PLC (LSE:MKS) and JD Wetherspoon PLC (LSE:JDW) have also warned this week the likelihood of price rises as a result of the increase... Read more
10.49am: Miners hit as China debt package underwhelms
Miners sat among the biggest losers on the FTSE 100 on Friday as investors mulled China's latest economic stimulus measures.
Copper firm Antofagasta PLC (LSE:ANTO) dropped 4.9% over the course of the morning, as Rio Tinto PLC, Anglo American PLC (LSE:AAL) and Glencore PLC (LSE:GLEN) also slumped
AJ Bell analyst Russ Mould noted the latest stimulus measures followed a “hectic week” for mining firms, after volatility in the wake of Donald Trump’s US election win.
“The risks to China from a second Trump presidency are now overshadowing efforts to get the economy moving,” he said.
“The question on investors’ lips will be whether this encourages Beijing to unveil a bolder package of measures.”
XTB analyst Kathleen Brooks warned the measures could mark the last since China began stimulus efforts in September.
“The problem with China’s [latest] stimulus measures is that they are not stimulus,” she said, “they are essentially a debt swap to shore up local government’s finances”.
“Traders do not see these measures as boosting consumption, and instead they are designed to stop a financial crisis domestically in China.”
While the debt swaps were said to allow saving of 600 billion yuan annually to be diverted to investment, Brooks argued it was “unclear” how this would happen given the “unwinding of the property bubble is ongoing”.
9.53am: China unveils £1trn economic stimulus plan
China has laid out a 10 trillion yuan (£1 trillion) plan to refinance local government debt in its latest effort to stimulate the world’s struggling second-largest economy.
Xinhua News Agency reported lawmakers had approved a bill to lift the ceiling of local government debt to 6 trillion yuan from this year to late 2026.
China’s Minister of Finance Lan Fo’an also told reporters some 4 trillion yuan worth of special government bonds would be issued over the next five years.
This would aim to cut hidden debt from 14.3 trillion yuan to 2.3 trillion yuan by 2028, Lan said, dubbing the move “a major policy decision taking into consideration international and domestic development environments, the need to ensure the stable economic and fiscal operation, and the actual development situation of local governments”.
China’s CSI 300 fell 1% on the news, which follows a five-day meeting that had been expected to see Beijing unveil new stimulus measures.
9.10am: US Fed boss dismisses speculation of ousting under Trump
Jerome Powell, chairman of the Federal Reserve, has dismissed speculation that president-elect Donald Trump could oust him from his post.
He told reporters on Thursday that it was “not permitted under law” for the White House to kick him out as chairman of the central bank.
Trump reportedly sought advice on whether he could fire Powell during his first term as president, having referred to bank officials as “boneheads”.
Powell batted off speculation of such a move this time around though, responding to questions from reporters that he would not step down.
This came after the Federal Reserve cut its benchmark lending rate by 25 basis points to a targeted range of 4.50% to 4.75% on Thursday.
Discussing the central bank’s outlook under Trump, Powell said: “It's such an early stage - we don't know what the policies are, we don't know when they will be implemented”.
“In the near term, the election will have no effects on our policy decisions.”
8.58am: Pay growth slows to lowest rate since early 2021
Pay growth over the course of October was at its softest since February 2021, as permanent staff placements contracted at the fastest pace since March this year.
KPMG and REC’s Report on Jobs index on Friday showed a drop in permanent wage growth from 52.8 to 52.5 between September and October.
This came as some recruitment firms pointed to uncertainty around last month’s Budget, KPMG said, while staff availability climbed but demand for workers fell.
“Businesses are still willing to pay more for top talent,” KPMG chief executive Jon Holt said, but a “growing pool of available candidates” has weighed of salary inflation.
He added tax rises in the Budget had led to expectations from some chief executive’s that hiring could be dampened further ahead “as companies grapple with absorbing any extra costs”.
8.35am: IAG leads risers early on as Vistry faces grim day
British Airways owner IAG jumped 7.2% as trading got underway on Friday to lead the FTSE 100’s risers.
IAG had updated earlier on that operating profit jumped over 15% to €2.01 billion in the third quarter on the likes of strong transatlantic and European demand, prompting a new €350 million buyback.
Vistry Group PLC (LSE:VTY) led the fallers in the meantime, dropping 13.6% after warning cost overruns related to developments in its South division would be worse than first feared.
Profit was set to be hit by £165 million over the next three years as a result of understated build costs, Vistry said, against the £115 million impact previously guided.
Elsewhere, miners also fell across the board following a volatile period after Donald Trump emerged victorious in the US presidential election.
Antofagasta PLC (LSE:ANTO) dropped 3.1%, followed by Glencore PLC (LSE:GLEN), Rio Tinto PLC and Anglo American PLC (LSE:AAL), after each fell on Wednesday and then rose again on Thursday.
Overall, the FTSE 100 fell 8 points to 8,132.
8.27am: Rightmove cautions on slow new build development growth
Rightmove PLC (LSE:RMV) has pointed to a sluggish recovery in new build development, despite optimism about the property sector’s near-term prospects.
Rightmove said property transaction flow was improving in a trading update on Friday.
Its full-year membership growth forecast was cut to 1%, from “up to” 2% previously, due to “a slower-than-expected recovery in new homes developments” though… Read more
Shares were slightly off the mark on Friday morning.
8.19am: Vistry tumbles as cost overrun impact worsens
Vistry Group PLC (LSE:VTY) shares fell over 14% after it warned a hit to profits from understated build costs in its South division would be greater than first thought on Friday.
A review into the issues found profit would be impacted by a further £25 million this year, £20 million next and £5 million in 2026, taking the total impact to £165 million.
“The increase reflects additional developments where the total full-life cost projections to complete the development were understated, and a reduced expectation of FY24 activity across the South Division,” Vistry said on Friday.
Vistry first unveiled the problems relating to underestimated costs across nine housing developments in its South division last month, warning of a £115 million hit at the time... Read more
7.47am: British Airways owner announces buyback as profit jumps
International Consolidated Airlines Group SA (LSE:IAG) has announced a €350 million (£291 million) share buyback after a jump in operating profit over the third quarter.
Operating profit grew 15.4% to €2.01 billion over the three months to September on the back of a 7.9% increase in revenue to €9.33 billion, the British Airways owner reported on Friday.
This came on strong demand in IAG’s core markets, supporting a 1.2% increase in passenger unit revenue, while operating margins climbed 1.4% to 21.6%.
“We achieved a very strong financial performance in [the third quarter],” chief executive Luis Gallego commented, “this is due to the effectiveness of our strategy and group-wide transformation.
“We are also delivering on our commitment to provide sustainable returns for shareholders.
“Demand remains strong across our airlines and we expect a good final quarter of 2024 financially”... Read more
7.12am: Stocks seen off the mark
Futures had the FTSE 100 falling a further 23 points to 8,188 on Friday, after Thursday’s decision by the Bank of England to cut interest did little to aid gains as the index dipped.
Friday is set to bring a quieter day after the rate decision on Thursday and Donald Trump’s US election win on Wednesday dominated proceedings.
British Airways owner International Consolidated Airlines Group SA (LSE:IAG) was among those in line to report on Friday, alongside housebuilder Vistry Group PLC (LSE:VTY).
Asian markets were mixed overnight, with Singapore’s Straits Times Index the biggest gainer, having risen 1.7%, while Chinese stocks fell.