- FTSE 100 falls three points 8,545
- Index hits new intra-day record in morning trading
- UK government borrowing jumped in December
- In New York, Netflix rallies 10% after update
4.45pm: FTSE 100 closes just off the mark
London's blue chips failed to fully bounce back in late trading, ending the day three points down at 8,545.
4.12pm: European stocks heading lower under bond market pressure
The Footsie has slipped into the red late this afternoon and looks like retreating slightly from its recent all-time highs.
Government bonds were selling off again, sending yields back up and putting pressure on stock markets, mostly in Europe with those in the US seemingly immune, apart from small caps.
The big faller in London's bue-chip index today was easyJet despite a mostly strong first-quarter trading update, though the second-quarter revenue trend was "modestly" softer and first-half pre-tax result guidance was "implicitly reduced by £60-70 million" analysts said.
Bond proxies were also lower, with utilities including water companies, telecoms and power in the red, led by United Utilities PLC, Centrica PLC and Vodafone Group PLC.
Top of the leaderboard was Intermediate Capital Group PLC, up 6.7%, followed by Halma PLC, Entain PLC and Aviva PLC.
Aviva benefited from an upgrade from JP Morgan, which said the agreed acquisition of rival Direct Line can be a huge win.
3.40pm: Herald vote 'a victory for shareholder democracy'
The defeat of Saba in the Herald IT vote (see below) with a large turnout of investors is "very encouraging", says Richard Stone, chief executive of the Association of Investment Companies (AIC).
"This is a victory for shareholder democracy."
With six other trusts with votes just around the corner, the boss of the investment company body said, "It’s vital that all shareholders vote on the future of their investment trust. Shareholders need to act now.”
The AIC also noted that the Financial Conduct Authority has responded to concerns it raised about the protection of retail shareholders’ interests around Saba's proposals, with platforms including Hargreaves Lansdown, Interactive Investor and AJ Bell having announced voting deadlines for six of the seven trusts.
Says Stone, "the FCA has confirmed to us that they have written to the platforms to understand how they have engaged with customers on the Saba vote".
But he said there were still barriers that needed to be removed that prevent retail investors voting (see the platform deadlines for the next votes on the AIC site here).
3.22pm: Saba capital loses first investment trust vote
Herald Investment Trust shareholders have rejected proposals from US raider Saba Capital to replace its independent board of directors.
It is the first of seven such meetings requisitioned by Saba against London-listed investment trusts.
Out of the total Herald votes, 26.4 million or 65.10% were against Saba's requisitioned resolutions, with Saba using its 14.1 million votes to vote in favour, representing roughly 34.75%.
Apart from Saba's own votes, there 99.78% opposition to the proposals, which Herald called a "damning indictment of Saba's proposals by the company's non-Saba shareholders".
2.46pm: Tech giants and Russell small-caps lead march higher
US stocks have opened higher, led by tech giants (correction: not small caps my data source was lagging).
The S&P 500 has advanced 0.5% to 6,077, while the Nasdaq is up 1%.
The Dow Jones has added 0.2%.
Netflix is marching at the head of the tech titans, up 12%, followed by a 9% gain for Oracle.
Meanwhile, back in London, the FTSE 100 has dropped into the red, with easyJet losses joined by Auto Trader and a group of utilities and other bond-like stocks.
2.27pm: Insurance covers less than half of global economic losses from natural disasters
Global economic losses from natural disasters such as hurricanes Helene and Milton reached $368 billion last year, according to a report from insurance broker Aon, but less than half of this was insured.
The total bill is down slightly from the $397 billion losses in 2023, but is 14% above the 21st-century average and the ninth year in a row that economic losses have exceeded $300 billion.
Insured losses were only $145 billion globally, up from $126 billion the previous year and the sixth costliest year on record.
Aon said insured losses "far exceeded the average", with the so-called protection gap at 60% compared to 68% in 2023.
12.55pm: Bitcoin support expected
Bitcoin is hovering around $105k today, with bigger risers being XRP and Solana among the big cryptos.
After bitcoin set a new historic high of $109,000 on Monday, overcoming its December peak, Deutsche Bank strategists expect the price to remain elevated.
This is due to "a more favorable regulatory and political environment in the US, increased institutional adoption, and a looser Fed monetary policy".
Yesterday saw the announcement that the US SEC will start a regulatory framework for crypto assets as the Trump administration's first step towards a crypto-regulatory overhaul.
Trump's appointment of Paul Atkins, a deregulation advocate, as SEC Chair also "signals a shift towards an innovation-friendly approach", say the strategists.
"Atkins’s expected repeal of many of the crypto regulations implemented by his predecessor, Gary Gensler, whose enforcement guidelines were perceived as hindering growth, is being closely watched by the industry. Of particular interest is how Atkins will handle the ongoing SEC case against Coinbase.
"This shift, combined with a Republican-controlled Congress signalling its intent to pass cryptocurrency-friendly legislation, has fostered a positive regulatory environment in the US, positioning the US as a potential global leader in blockchain innovation."
12.17am: Centaur leaps
Shares in Centaur Media (AIM:CAU), publisher of the Lawyer and Marketing Week and provider of business intelligence, have just surged 15% higher on the back of a positive midday trading update.
Trading since October has been ahead of previous guidance, it says, and the board now expects revenue for the 2024 calendar year to be around £35 million at an adjusted EBITDA margin of approximately 16%.
New executive chair Martin Rowland, who is undertaking a review of the business and strategy, says the focus "will be on defining the strategy and enhancing the reputation of each brand within Centaur to maximise shareholder value".
11.56am: Markets holding solid
European markets remain solid as we approach midday, with the FTSE 100 reaching a fresh record high for the fourth consecutive session but Germany's DAX leading the way.
A decline in bond yields "has helped allay some of the fears around the ballooning debt payments due in the UK," says market analyst Josh Mahony at Scope Markets.
"With the UK 10-year treasury yield having dropped from 4.9% to 4.6% in just over a week, UK borrowing costs are cooling after a concerning period that saw the pound and FTSE 350 underperform."
Ahead of the US open, tech stocks are in the limelight following the White House announcement that the likes of OpenAI, SoftBank and Oracle are set to team up in a joint venture called Stargate.
Oracle shares shot up 7% yesterday and in pre-open are heading another 8% or 9% today, while Wall Street stock benchmark futures are all pointing higher, led by the Nasdaq 100's 0.8% rise.
Netflix Inc is set to jump 14% after its subscriber numbers beat expectations.
The dollar is softer again today, with the pound and euro both up 0.1%, while the dollar index is down 0.2%.
Mahony says the early comments from Trump "push back" against recent optimism that he will take a steady 2% per month approach to tariffs, though the threat of a 10% charge on Chinese imports "falls well short of the figures previously touted".
"It is also worthwhile noting that the dollar is 12% higher against the Yuan since Trump left office in 2021, with 4% of that happening in the past four-months. Thus, there is a strong chance that the effects of a 10% tariff are eroded by currency devaluation," Mahony says/
11.13am: BTL mortgages data
Buy-to-let mortgages were on the rise in the second half of last year.
There was a 6.5% rise in buy-to-let loans advanced in the third quarter compared to last year, with a 8.9% rise in value to £8.6 billion, according to industry figures from UK Finance.
More BTL loans are on fixed rates and fewer on variable rates, with a 3.3% rise in BTL fixed rate mortgages outstanding at 1.4 million, while the number of variable rate loans outstanding fell 14.9% to 541,488.
The average interest rate was 5.22% in the quarter, 0.03 basis points higher than the second quarter, but 0.09 basis points lower than a year earlier.
There were 710 buy-to-let mortgage possessions taken in Q3 2024. This is unchanged from the previous quarter, but an increase of 73.2 per cent on the same quarter a year previously.
10.22am: Investment trusts do deal with Saba
Some more intrigue in the world of investment trusts this morning, where analysts at Stifel say the "Saba saga has become more bizarre".
Four out of BlackRock's nine UK investment trusts (BlackRock World Mining Trust, BlackRock Smaller Companies Trust, BlackRock Energy and Resources Income Trust and BlackRock American Income Trust) put out announcement that their boards have entered into an agreement in which Saba has given a number of undertakings not take any hostile action for the next two and a half years.
The boards all say their companies have not given any monetary consideration to Saba for this agreement but say they are committed to strong high corporate governance standards and putting first the interests of shareholders as a whole.
"Clearly, these commitments are a bit vague and we are surprised there have not been more 'concrete' agreements such as an arrangement for a conditional tender offer if a discount reaches a certain level, or a tender is triggered by underperformance," says Stifel analyst Iain Scouller...read more
Remember, a shareholder vote is taking place at noon today for Herald Investment Trust (LSE:HRI).
10.01am: CMA given a push
Reports are doing the rounds that the chair of the Competition and Markets Authority has been given the boot by the government for not doing enough to boost the UK’s economic prospects.
The government timed the ousting of Marcus Bokkerink to coincide with the Davos economic forum, said the reports, to underline the new growth-led thinking in the government.
Government ministers felt that the watchdog currently is not growth-orientated enough, with delays to deals such as Vodafone and Three Mobile seen as a handicap to the plans.
9.47am: Bond markets react calmly to UK borrowing
More thoughts on markets and government borrowing.
"The bond market hasn’t panicked about UK government borrowing shooting up," says AJ Bell investment director Russ Mould.
While the public sector net borrowing figure was much higher than expected, the UK 10-year gilt yields have actually fallen this morning, from 4.594% to 4.581%, which he says implies the bond market had already priced in a punchy rise in borrowing.
"We’ve already seen big movements in gilt yields in recent weeks, but that doesn’t mean Rachel Reeves now has nothing to worry about," says Mould.
"The pressure is on the chancellor to get public finances in order and to accelerate economic activity. Increasingly, it looks like both cannot be done in unison."
A big investor focus this week is what Donald Trump is going to do next.
"He’s made it clear that the EU is on his hit list for tariffs, but details remain thin on the ground. That’s created an underlying sense of worry for investors, but there was some good news which gave a lift to certain US stocks," Mould adds.
Germany’s DAX index is also enjoying a good run, hitting another record high thanks to Adidas and Siemens Energy this morning, offsetting Porsche going into reverse on downbeat guidance.
The Adidas numbers have positive read-across to JD Sports Fashion PLC (LSE:JD.) shares, which were up almost 2% earlier, but have tailed off a little from there.
9.32am: The growing middle
Earlier, a new analysis showed that the UK's medium-sized businesses outperformed the rest of the economy last year.
This is the first of what is planned to be a regular monthly report from NatWest and S&P Global that aims to provide more regular data on the country's small and mid-market corporations.
Mid-market businesses were the fastest growing in terms of output for three months to December, according to the first NatWest Mid-market Growth Tracker, produced using the S&P Global surveys it carries out for the purchasing managers' index (PMI) reports.
The newly forged mid-market business activity index rose to 53.3 in December from 50.3 in November, with growth driven by service sector sales. Mid-sized firms are those with at least 250 employees, while the index threshold of 50 separates growth and contraction.
9.11am: New record highs for FTSE and DAX
The FTSE 100 continues to break new ground, with new intra-day record highs continuing to be set this morning, with a 0.3% rise so far.
London's mid-caps are also on the front foot, with the FTSE 250 up 0.35% to 20,668.42, still well off its record high from 2021.
But Germany's DAX is setting the pace, and also setting new records, up 1% to new highs.
Benchmarks for France, Spain and Italy are up between 0.5% and 0.2%, while the pan-European Euro Stoxx 600 is up 0.6%.
Top of the European leaderboard is adidas AG, up 6.5%, followed by Norwegian vending machines maker Tomra Systems, clean energy engineer Siemens Energy, air conditioning group Munters and the UK's Intermediate Capital.
8.58am: Gold miner plunges
Hochschild Mining PLC (LSE:HOC, OTCQX:HCHDF) is the biggest faller across the FTSE 350 this morning, with shares in the precious metals miner plunging over 16% as management gave an update on production and the cost outlook.
In the fourth quarter of last year, gold equivalent output was 98.3k ounces, while net debt was US$216 million, higher than the consensus forecast of US$175 million.
"Combined with the higher AISC expectations from management, it suggests higher ongoing costs across the operations," says analyst Peter Malin Jones at Peel Hunt.
He reckons this implies EBITDA "well below" consensus.
8.49am: Intermediate gains
Biggest riser on the FTSE 350 is Intermediate Capital Group (LSE:ICP), up almost 5% after it announced new fund-raising of $7.2 billion to take its nine-month total to $17.2 billion, which is well ahead of full-year market expectations of around $16.6 billion.
Fund raising was concentrated in its Structured and Private Equity segments.
Fee-earning assets under management declined 2% to $71.14 billion, but was negatively impacted by US dollar strength and in constant currency terms, increased 2.8%.
Analysts at Peel Hunt say they do not expect consensus earnings to move significantly, "but the longer-term growth profile of the group remains on track".
8.36am: Spoons says forecasting difficult because of higher costs
JD Wetherspoon PLC (LSE:JDW) chairman Tim Martin says the pub group is "confident of a reasonable outcome for the year".
However, sales growth growth slowed in the past quarter and Martin said "forecasting is more difficult" given a £60 million annual increase in staff-related costs due to changes in the Budget.
Martin also resumed his call for the government to "redress the imbalance" between VAT for pubs and supermarkets, "thereby striking a blow for tax equality and ending discrimination in favour of dull (yawn, yawn) dinner parties".
As for the quarterly results, Spoons reported like-for-like growth of 4.6% for the second quarter to 19 January, down from the 5.9% in the first quarter of its financial year.
The shares rose initially then fell into the red.
8.12am: FTSE 100 and 250 start higher
The FTSE 100 and 250 have both opened higher, with financial sector stocks in the lead.
Blue-chips are up 10 points to 8,558.4, while the mid-caps have added 42 points or 0.2%.
easyJet PLC (LSE:EZJ) is a faller though, down 5.2% and dragging Wizz Air with it.
And Trainline PLC has dropped another 6% after the Department for Transport's update (see below).
7.55am: Trainline responds to govt's rail plans
After falling over 7% on Monday on a speech by Transport Secretary Heidi Alexander, today Trainline PLC has responded to a statement from the Department for Transport, where it said it planned to centralise online ticket-buying for Great British Railways but with the private sector still playing a role.
The DfT statement said that once GBR is established "it will retail online by bringing together individual train operators’ ticket websites".
GBR's ticketing will "work alongside" the private sector retail market, such as Trainline, with the DfT's vision being that "all rail retailers can compete in an open and fair manner", with the private sector continuing to "play a key role" through innovation and investment.
Trainline said on Wednesday that the structure of GBR's retailing "will take several years to realise" and it welcomed the sound of "a level playing field and a strong independent retail sector".
7.48am: Deficit is disappointing news for Chancellor
Some thoughts on the UK government borrowing numbers from Alex Kerr, UK economist at Capital Economics.
"Against a backdrop of slowing GDP growth and high interest rates, December’s overshoot in borrowing is further disappointing news for the Chancellor," Kerr says.
"That said, most of the overshoot was because of a one-off payment and components that are heavily revised so the figures may not be as bad as they first appear."
But Kerr says the figures leave the current budget deficit on track to overshoot the Office for Budget Responsibility’s forecast of £55.5 billion in the 2024/25 fiscal year by around £1.5 billion.
The data "underlines the challenges that face the Chancellor. And although market interest rate expectations and gilt yields have fallen in the last week, they are still higher than at the time of the Budget and suggest that the Chancellor’s headroom against her fiscal rules has been whittled down from £9.9 billion in October to £2.0 billion.
"That combined with a weakening economy suggest that, in order to meet her fiscal rules, the Chancellor may need to raise taxes and/or cut spending in the next fiscal statement on 26th March."
7.39am: good start for easyjet
First-quarter trading for easyJet PLC looks like good news for investors.
There was a 7% rise in passenger numbers compared to a year ago and a fall in costs.
Fuel costs per available seat kilometres (CASK) were reduced by 13% compared to last year, which with flat non-fuel costs meant total CASK was down 4%.
Profits of £43 million were made by the holidays business, around a 40% increase in profits during the period, and overall group losses were reduced 52%.
The budget airline said underlying results for the whole first half will reflect the improvements this past quarter, partially offset by second-quarter underlying unit revenue trends being "modestly lower" than Q1, as investments in capacity to drive average seat kilometres 14% year-on-year.
7.24am UK public borrowing higher than expected
The UK budget deficit for December was larger than expected as government borrowing increased on the previous month.
Public sector net borrowing excluding banks was £17.8 billion compared to a deficit in November of £11.8 billion and higher than the consensus forecast of £14.1 billion.
The UK December public sector net cash requirement was £19.9 billion compared to £13.13 billion in November.
7.15am: FTSE 100 to start in watchful mood
The FTSE 100 has been tipped to start in a calm and composed manner on Wednesday, after hitting a new all-time high the day before, while a new slew of corporate updates and an update on UK government borrowing might change the mood.
Futures were pointing to a fall of around a single point for the blue-chip index an hour before trading, a day after it added almost 28 points to finish at a record closing high of 8,548.29, as well as setting a new intraday high of 8,550.4.
Overnight, Wall Street had a strong session, led by the small cap Russell 2000 and Dow Jones, which were up 1.85% and 1.2% respectively.
The S&P 500 added 0.9% to near its own record higher from last month and the Nasdaq climbed 0.6% as a fallen Apple weighed.
Oracle was a big riser on the back of President Trump's US$500 billion plan for a US AI Infrastructure network to be called Stargate.
Asian markets are mixed this morning, with Japan's and India's indices higher, but Hong Kong's Hang Seng and the Shanghai composite down 1.8% and 0.85%.
5am: What's in the financial diary for Wednesday
Wednesday will see Wetherspoons and easyJet in focus, while Herald Investment Trust shareholders will stage a key vote on Saba Capital's advance against UK investment trusts.
Wetherspoons' update comes after a string of impressive updates from pub sector peers... Read more
Reassurances will be required from easyJet after rising oil prices have threatened headwinds... Read more
Herald shareholders will kick off a key string of votes over aggressive advances by US hedge fund Saba Capital on UK investment trust boards... Read more
Announcements due:
Trading updates: Intermediate Capital Group PLC, JD Wetherspoon PLC, Quilter PLC, LBG Media Ltd, easyJet PLC, PensionBee Group PLC
Finals: Residential Secure Income REIT
US earnings: Abbott Laboratories, GE Vernova, Johnson & Johnson, Procter & Gamble
AGMs: ASOS PLC, JPMorgan Japanese Investment Trust PLC, Tracsis PLC
Economic announcements: Public Sector Net Borrowing (UK), MBA Mortgage Applications (US)