- FTSE 100 gains 17 points
- Lloyds surges as Supreme Court allows motor finance appeal
- Wall Street seen higher as US inflation climbs as expected
4.05pm: FTSE 100 on front foot late on
London’s blue chips headed into late trading on the front foot on Wednesday, having overcome an initial drop early on.
Endeavour Mining PLC (LSE:EDV, TSX:EDV, OTCQX:EDVMF) led risers on the FTSE 100, up 6.6% after unveiling a preliminary study at Assafou in the Ivory Coast which confirmed its potential as a major gold producer.
Its rise also coincided with a gain for gold over the day, by 1% to US$2,713 an ounce, with miner Fresnillo PLC (LSE:FRES) also among the day’s winners as a result.
Lloyds Banking Group PLC (LSE:LLOY) followed with a 3.0% rise on news the Supreme Court would hear an appeal over cases relating to motor finance mis-selling.
The decision sent shares in Close Brothers Group PLC (LSE:CBG) higher too, while Barclays PLC (LSE:BARC) was also among those to benefit.
Overall, the FTSE 100 gained 17 points to reach 8,297.
3.43pm: OPEC slashes oil demand forecast again
OPEC has cut its forecast for global oil demand for the fifth successive month.
Having agreed last week to further delay output increases, the oil cartel cut its demand forecast for next year by 90,000 to 1.4 million barrels a day.
It also wound down expectations for demand this year by 210,000 to 1.6 million barrels a day, with fears recently having built over a supply glut ahead on Chinese economic weakness and growing US production.
Benchmark Brent crude fell from its daily high of US$73.07 a barrel to US$72.66 on the news.
3.26pm: FCA hails ‘swiftness’ of Supreme Court over motor finance appeal
Britain’s Financial Conduct Authority has hailed the Supreme Court’s “swiftness” in deciding cases around motor finance mis-selling could be appealed.
“We previously wrote to the Supreme Court asking it to decide quickly whether it will give permission to appeal and, if it does, to determine the substantive appeal as soon as possible,” the FCA said in a statement.
“This is because of the potential impact of any judgment on the motor finance market and the many consumers who rely on it.”
October’s Court of Appeal ruling had opened the door to potentially billions in compensation from lenders over hidden commission payments within motor finance deals.
S&U PLC (LSE:SUS) earlier on Wednesday had become the latest to flag an impact since the ruling in a statement showing lower net receivables within its Advantage motor finance wing recently.
Trading had “been burdened by the [decision] which sought to impose a new, but retrospective, duty of care on lenders and brokers throughout the sector,” it said before the Supreme Court’s decision.
The Supreme Court is now expected to hear the appeal, relating to cases involving Close Brothers and FirstRand Bank, in the first half of next year.
The FCA added: “We are considering whether to formally intervene in the case to share our expertise to assist the court on the substantive appeal.”
2.43pm: Nasdaq rallies as markets up rate cut bets after inflation report
The Nasdaq rallied as trading got underway on Wall Street in the wake of data showing an expected uptick in inflation through November.
Markets were pricing in an interest rate cut by the Federal Reserve next week as a near certainty after the consumer price index rose by 2.7% as anticipated during the month.
The Nasdaq opened 0.8% higher on the back of the hiked expectations, while the S&P 500 surged 0.6% and Dow Jones ticked up 0.2%.
Expectations are now for interest to be reduced by a further 25 basis points at the Fed’s December meeting.
“Given how restrictive policy has been this year, there is wiggle room for the Fed to lower rates this month without triggering an uptick in inflation,” Capital.com analyst Daniela Sabin Hathorn said.
“In fact, with Trump taking office in January, many economists have predicted that his tariff and tax plans will increase price pressures, meaning the Fed will be limited next year with regards to how much it can lower rates.
“Because of this, a cut in December seems like a valid move as it brings the rate closer to normalisation before the tide may turn next year.”
1.54pm: Wall Street futures turn green on in-line inflation figures
Futures pointed to a positive start for Wall Street in the wake of inflation figures for November.
As expected, the consumer price index climbed by 2.7% on an annual basis in November and by 0.3% month on month, according to the US Bureau of Labor Statistics.
The Dow Jones overcame a drop to sit 0.2% higher ahead of trading after the figures.
The Nasdaq was seen jumping 0.5% in the meantime, as the S&P 500 looked to gain 0.3%.
Back in London, the FTSE 100 was up 32 points at 8,312.
1.45pm: Fed could ‘err on side of caution’ after inflation uptick
US policymakers may still refrain from cutting interest rates this month given an increase in the rate of inflation in November, Charles Schwab managing director Richard Flynn has noted.
Though the reading matched expectations as markets bet on a cut next week, an increase in inflation from 2.6% to 2.7% during the month may “temper” sentiment, he said.
“Several Fed speakers have recently indicated that they are unsatisfied by the rate of improvement in inflation and the regression in November fails to provide reassurance on that front.
“This may lead policymakers to err on the side of caution, opting for a pause in cutting interest rates to avoid bolstering pressure on prices.”
There was also an “argument for restraint” given “ongoing uncertainty around the fiscal direction of the incoming US administration,” Flynn added.
1.34pm: US inflation in line with expectations
Inflation across the US rose in line with expectations over the year to November.
According to the US Bureau of Labor Statistics, the consumer price index ticked up 2.7% on an annual basis in November and by 0.3% month on month.
“Indexes that increased in November include shelter, used cars and trucks, household furnishings and operations, medical care, new vehicles, and recreation,” it said.
“The index for communication was among the few major indexes that decreased over the month.”
Core inflation, excluding volatile energy food items, climbed by 3.3% year over year, which was again in line with expectations.
Analysts had noted that a reading in line with expectations would firm up the likelihood of an interest rate cut by the Federal Reserve later this month.
1.18pm: Motor finance ruling appeal grant ‘very good news’ for industry
The Supreme Court’s decision to approve an appeal against an October ruling over motor finance mis-selling has been welcomed by the industry.
Lobby group The Financing and Leasing Association hailed the news that Close Brothers Group PLC (LSE:CBG) would be allowed to appeal the Court of Appeal decision that hidden commissions from banks to salespeople around car finance was illegal.
“Permission to appeal is very good news indeed,” Adrian Dally, head of motor finance at the group which represents the likes of Barclays and Lloyds, said.
“The expedited process will give the motor finance sector the certainty it needs.”
October’s ruling had opened the door to a new wave of claims around historic motor finance agreements, given it went further than a Financial Conduct Authority investigation into now banned specific discretionary commission arrangements.
Lenders had been eyeing a potential collective £30 billion compensation bill as a result, with the Supreme Court’s decision leaving the prospect of an overruling after the appeal is heard in the first half of next year.
12.59pm: Oil picks up as Biden reportedly mulls harsher Russian sanctions
Oil prices climbed on Wednesday as reports emerged that president Joe Biden was mulling further, harsher sanctions on Russia before leaving the White House.
According to Bloomberg, Biden has weighed restrictions on Russian oil exports, such as those targeting foreign buyers, which would add to an existing ban on imports.
Biden had so far resisted such measures on the grounds they could boost energy prices, sources said.
However, oil’s recent dip and speculation over incoming president Donald Trump’s efforts to potentially force Ukraine into a deal with Russia to end their near three-year conflict had opened to door to more aggressive measures, they added.
Benchmark brent crude climbed by 1.4% to US$73.07 a barrel on Wednesday, having sat as low as US$70.83 last week.
12.36pm: Lloyds tops risers as Supreme Court allows motor finance appeal
Lloyds Banking Group PLC (LSE:LLOY) surged on Wednesday as the Supreme Court allowed an appeal against October’s ruling over motor finance mis-selling.
Lloyds, which is among those exposed to potential compensation, gained 4.3% to top the FTSE 100's risers, while peer Close Brothers Group PLC (LSE:CBG) jumped 8.3%.
Shares in both had been hit by a Court of Appeal decision that hidden commissions from banks to salespeople around car finance were illegal.
The Supreme Court on Wednesday said it would allow Close Brothers to appeal the ruling, which opened the door for lenders to potentially have to pay billions in redress.
Lloyds has set aside £450 million to cover possible compensation, while Banco Santander (LSE:BNC) unveiled a £295 million provision recently.
Close Brothers has not disclosed its potential hit but stopped writing new motor finance deals in October in the wake of the ruling and pointed to a possible impact next year.
12.04pm: Elon Musk’s SpaceX bags $350bn valuation
SpaceX has become the world’s most valuable private start-up after reportedly scoring a valuation of US$350 billion on a new employee buyback deal.
A new $1.25 billion deal will see SpaceX and investors repurchase its common shares at $185 each from employees, according to the Financial Times.
SpaceX had purchased shares for US$112 apiece when rebuying stock from employees in September, meaning its value has surged 65% since.
The rise coincides with a boom in the value of Musk’s companies following Donald Trump’s US election victory last month.
Musk had been a key backer of Trump during election campaigning and has since been appointed head of his new department of government efficiency.
11.46am: Wall Street set for mixed start ahead of inflation data
The mood on Wall Street appeared mixed ahead of key inflation figures for November.
Futures had the Nasdaq and S&P 500 up 0.3% and 0.1% respectively ahead of Wednesday’s opening bell, but the Dow Jones was seen 0.1% lower.
Focus has been on Wednesday’s consumer price index reading for November as markets mull the likelihood of an interest rate cut by the Federal Reserve later this month.
Expectations are for inflation to have risen by 2.7% over the year to November and by 0.3% month on month.
“Barring any shocks, the likelihood of an interest rate cut is high next week,” interactive investor analyst Richard Hunter commented.
Predictions over the pace of rate cuts next year have been dialled back though, he added.
“The twin drivers of a surprisingly robust economy which has shown few signs of heading towards the previously feared recession, alongside some caution that the president-elect is likely to introduce some measures which are inflationary, could well keep a lid on the monetary easing path.”
11.33am: Inditex shares slide as high expectations bite
Zara owner Inditex fell almost 6% after results showing a surge in profit over the first nine months of the year appeared to underwhelm.
Inditex unveiled a 9.9% increase in pre-tax profit to €5.8 billion (£4.8 billion) and 7.1% uptick in sales to €27.4 billion for the first nine months of the year on Wednesday.
However, analysts pointed out that the figures reflected a “small miss” against estimates.
Deutsche noted sales were 2% behind consensus and that below double-digit profit growth would likely be viewed as “disappointing”.
“Current trading is fractionally light but not inconsistent with a likely double-digit [fourth quarter] topline delivery,” Jefferies added.
“The group's impressive growth credentials look confirmed, but the shares likely needed a better print to prevent some profit-taking today.”
Shares fell 5.9% to €51.46.
11.11am: M&S enjoying Christmas-fuelled boom
Marks and Spencer Group PLC (LSE:MKS) has enjoyed a boom in sales in the run-up to Christmas as shoppers flock towards premium goods for the festive season, industry figures show.
NIQ reported on Wednesday that M&S’ grocery sales ticked up 10.6% against a year earlier in the three months to the end of November.
Kantar separately flagged a similar surge in food and drink sales at M&S, which also deals in clothing and homeware, on Tuesday.
Almost one in three households had shopped for groceries at M&S, Kantar highlighted, ahead of a further anticipated boost to sales across the sector as Christmas neared.
M&S had previously guided towards strong festive trading in interim results, which showed first-half profits up 17%.
Overall, sales growth across the sector in the four weeks to November 30 slowed from 4.0% to 3.7%, according to NIQ, with consumers said to be holding out for December to shop for Christmas.
10.39am: Ashtead slumps again as analysts cut targets after profit warning
Ashtead Group PLC (LSE:AHT) faced a second day of sharp share price declines on Wednesday as analysts trimmed estimates in the wake of Tuesday’s cut to full-year guidance.
Though the industrial equipment rental firm detailed plans to shift its primary listing from London to the US, the news was overshadowed by a separate profit warning in interims.
RBC, JPMorgan and Goldman Sachs were among a string of banks to wind down Ashtead’s share price targets as a result.
RBC cut from 7450p to 6,750p, noting Ashtead’s performance against peers had “been called into question in the near term”.
JPMorgan wound down its target from 7,300p to 6,900p in the meantime, while Goldman cut to 6600p.
“[We] still think the stock can 'work' on a 12-month view,” RBC added, highlighting the subsequent launch of a US$1.5 billion (£1.2 billion) buyback from Ashtead.
However, Ashtead fell a further 6.5% to 5,044p after having slumped 14% on Tuesday.
9.49am: HSBC targeting $3bn in savings through overhaul - reports
HSBC Holdings PLC (LSE:HSBA) is said to be targeting as much as US$3 billion (£2.4 billion) in savings through turnaround plans under new chief executive George Elhedery.
Bloomberg-cited sources said managers had been informed of the rough target last week and told the major overhaul would take until June next year to complete.
Reports emerged last month that HSBC was to shed hundreds of senior jobs under the reshuffle, with staff told to reapply for roles in its newly established corporate and institutional banking division.
HSBC had unveiled plans to split its global operations from three to four businesses in October.
These were to include Hong Kong and UK divisions, alongside corporate & institutional banking, and international wealth & premier banking wings.
9.33am: British Airways owner tops risers after Deutsche upgrade
British Airways owner International Consolidated Airlines Group SA (LSE:IAG) gained on Wednesday after being upgraded to a ‘buy’ rating by Deutsche Bank analysts.
Lifting the airline owner from a ‘hold’, Deutsche noted capacity constraints on transatlantic flights should leave IAG able to lift prices into 2025.
“This is supported by early evidence from our fares tracker and underpinned by the macro outlook for the US, the UK and Spain,” analysts said.
Lower fuel costs should also act as a tailwind over the coming year, leaving scope for ahead-of-consensus earnings growth, according to the bank.
“We think the journey towards a better BA has only just begun,” Deutsche continued.
“Improvements at Aer Lingus, the continued leveraging of the Spanish platforms and growing IAG loyalty should also help.”
A 400p share price target was also set, against 215p previously.
Shares climbed 1.9% to 287.4p on Wednesday.
9.15am : Grey mood ahead of US inflation read, Endeavour shines on new project
Grey cold weather in London reflected the mood of the stock market with the Footsie index sitting at around 19 points lower ahead of the US inflation number later on.
Expectations are for a further increase in headline inflation to 2.7% through November, following October’s 2.6% rise with the implications for cuts in US interest rates the main point of interest.
“Without an upside inflation surprise,” anticipations will remain for a 25 basis point rate cut in the Fed’s November meeting, IG analysts commented.
Elsewhere, Endeavour Mining topped the index on the news that numbers from a study point to a new project at Assafou in the Ivory Coast becoming a Tier-One gold-producing mine.
The pre-feasibility study indicated possible production of 329,000 oz a year at sustaining costs of US$892 an ounce over the first 10 years with a total estimated mine life of fifteen years.
Shares rose 1.7% to 1,525p.
FTSE 100 down 19 at 8,260.
8.15am: Stocks drop further at open
The FTSE 100 lost further ground as trading got underway on Wednesday, falling 25 points to 8,254.
Ashtead Group PLC (LSE:AHT) topped fallers for a second day running after Tuesday’s profit warning, while miners also weighed once again.
Endeavour Mining PLC (LSE:EDV, TSX:EDV, OTCQX:EDVMF) and British Airways owner International Consolidated Airlines Group SA (LSE:IAG) were among the early risers in the meantime.
8.10am: Profit jumps at Inditex
Zara, Pull & Bear and Bershka owner Inditex has reported a surge in profit for the first nine months of 2024.
Pre-tax profit climbed 9.9% to €5.8 billion (£4.8 billion) during the first nine months of the year, Inditex reported on Wednesday.
Sales grew by 7.1%, or by 10.5% at constant currency, to €27.4 billion, with Inditex highlighting “very satisfactory development both in stores and online”.
Autumn and winter collections had been “well received” most recently, Inditex said, flagging constant currency sales growth of 9% over the course of November and early December... Read more
7.50am: BAT flags improving non-tobacco profitability
British American Tobacco PLC (LSE:BATS) has flagged improving profitability from its non-tobacco products and doubled down on guidance for the full year.
Both revenue and adjusted profit over the year climbed in line with guidance for low-single-figure organic growth, the cigarette maker said on Wednesday.
Profitability from non-tobacco, or new category, products improved further, while revenue growth was set to have accelerated over the second half.
Such products include the likes of vapes and oral nicotine pouches, with the company noting it was progressing towards being a “smokeless” business by 2035.
“Our second-half performance acceleration is driven by the phasing of new categories innovation, the benefits of investment in US commercial actions and the unwind of wholesaler inventory movements,” chief executive Tadeu Marroco commented... Read more
7.14am: Stocks set for muted start
The FTSE 100 was seen little changed ahead of Wednesday’s trading, after having shed 71 points on Tuesday.
Miners had weighed on the index on Tuesday after worse-than-expected Chinese export data hit sentiment around the world’s struggling second-largest economy.
Asian markets were mixed overnight into Wednesday, with South Korea’s Kospi index up just over 1% and the biggest mover.
Attention on Wednesday was set to be on a string of company updates before US inflation figures for November later in the day.
5.00am: Wednesday's schedule
Wednesday brings updates from the likes of BAT, Inditex and Tui before US inflation figures later in the day.
Zara-owner Inditex is expected to up guidance in its third-quarter results... Read more
BAT has been in favour in recent months ahead of its full-year update... Read more
Tui should have benefitted from continued strong travel and holiday demand... Read more
Announcements due:
Finals: British American Tobacco PLC (LSE:BATS), Tui AG
Trading updates: S&U PLC (LSE:SUS), Inditex
Interims: Cohort PLC, Optima Health PLC
Finals: Gcp Infrastructure Investments Ltd
US earnings: Adobe Inc
AGMs: Baillie Gifford Japan Trust PLC, Gattaca PLC, Guardian Metal Resources PLC, Microsaic Systems PLC, Pci-Pal PLC, Tavistock Investments PLC, Time Out Group PLC, Volution Group PLC
Economic announcements: MBA Mortgage Applications (US), Consumer Price Index (US), Crude Oil Inventories (US), Budget Statement (US)