- FTSE 100 flat
- BT tumbles on Citi downgrade
- Wage growth overshoots expectations
- Gold price nears record highs again
4.20pm: Flat finish for Footsie
The FTSE 100 looks to be ending the day flat, dipping marginally into the red before the close but finishing around 8,768.
IHG continues to fall, along with grocers Tesco, Sainsbury's and M&S and several other high street and consumer-facing names, including JD Sports, Games Workshop, Rightmove and Kingfisher.
China-focused banks and other financials and miners ended the day on top, led by HSBC, Glencore, Standard Chartered, St James's Place, Barclays and NatWest.
3.59pm: FTSE 100 just above the mark late on
The FTSE 100 headed into late trading on the front foot, having ticked up 12 points to 8,780.
HSBC Holdings PLC (LSE:HSBA) gained 1.9% to lead the risers, while it was Intercontinental Hotels Group PLC (LSE:IHG) that headed the fallers, down 4.1%.
Though it had unveiled a US$900 million buyback on stronger profit for last year, mixed guidance from the Holiday Inn owner weighed.
BT Group PLC (LSE:BT.A) moved off the day’s lows to sit off 3.1% lower, after having been slapped with a ‘sell’ rating by Citi analysts, while J Sainsbury PLC, Airtel Africa PLC and Tesco PLC were also among fallers.
Among mid-caps, Wood Group PLC remained ahead of the risers as it reversed on recent declines, as Plus500 Ltd continued to face pressure following results.
Overall, the FTSE 350 picked up 4 points to sit at 4,809, while the AIM all-share moved just below the mark.
Challenger Energy Group PLC was among those rising, following news on an US$8 million deal to sell its Trinidad and Tobago business… Read more
Across the Atlantic, US stocks remained mixed, with the Nasdaq slipping back after an initial gain but the S&P 500 heading higher to test record highs.
3.04pm: Nasdaq heads higher in mixed start on Wall Street
Wall Street faced a mixed start to the shortened week on Tuesday as preliminary talks between Russia and the US over the war in Ukraine came to an end.
Though no resolution was reached in the first round of talks in Saudi Arabia, pledges had emerged for continued discussions on bringing about an end to the conflict.
“The lack of a resolution is no surprise,” XTB analyst Kathleen Brooks noted, flagging agreements to work on ending the war “as soon as possible” and finding a solution “sustainable and acceptable to all sides”.
Having each risen over the course of last week, the Nasdaq moved up 0.3% after Tuesday’s opening bell, as the S&P inched upwards and the Dow Jones shed 0.2%.
Among companies, Grail Inc was among early risers, gaining 14% after unveiling a deal with Quest Diagnostics to expand access to its multi-cancer early detection test.
Walgreens Boots Alliance Inc and Super Micro Computers Inc also racked up gains, while Medtronic PLC dropped 7% after the medical device firmed underwhelmed with third quarter figures.
2.13pm: Energy bills expected to be hiked by 5% from April
Energy bills will likely be hiked from April when regulator Ofgem sets its latest price cap, Cornwall Insight has forecast.
According to the consultancy, the energy price cap, which determines how much suppliers can charge per unit of gas and electricity, is expected to be upped by 5% to £1,823.
This marks an increase on its previous prediction of £1,785 and reflects colder weather and a depletion in gas storage levels across Europe on limited renewable output.
Ofgem is set to firm up the upcoming prices on February 25, after having lifted the cap by 1.2% to £1,738 on an annual basis in January.
1.27am: FTSE 100 holds in green; BT, IHG remain under pressure
London’s blue chips continued to enjoy a broadly positive showing on Tuesday afternoon, with the FTSE 100 up 14 points at 8,782.
Ashtead Group PLC and HSBC Holdings PLC gained 1.7% respectively to top the risers, while BT Group PLC and Intercontinental Hotels Group PLC remained ahead of the fallers.
BT sat 4.4% lower into the afternoon after being hit with a downgrade by Citi analysts hot on the heels of Morgan Stanley cutting down its stake in the telecoms firm.
IHG dropped 3.8% in the meantime, as underwhelming guidance appeared to cloud largely expectation-matching figures… Read more
Tesco PLC and J Sainsbury PLC were also among the FTSE 100’s losers.
On the FTSE 350, Wood Group PLC rebounded 7.0% after heavy selling in recent days on last week’s profit warning, as Plus500 Ltd remained downtrodden after results earlier on.
The mid-cap index gained six points to sit at 4,812, with gains stretching to small-caps as the AIM all-share inched higher to 726.
12.29pm: BoE’s Bailey bats off wage growth threat to interest rate cuts
Bank of England governor Andrew Bailey has downplayed the impact of an increase in wage growth over the last quarter of 2024 on interest rate cuts ahead.
Speaking in Brussels on Tuesday, he signalled average pay in the UK increased slower than policymakers had expected and questioned the reliability of the figures.
According to the ONS, average earnings including bonuses climbed from 5.5% to 6.0% in the three months to December, as those excluding bonuses increased from 5.6% to 5.9%.
Analysts had warned the rise, which exceeded market expectations, could cloud the central bank’s path to cutting interest rates ahead.
However, Bailey said rate-setters anticipated the rate of pay growth would moderate ahead, placing less upward pressure on inflation.
“One of the best anchors we have is the survey that our agents around the country do every year, and they think settlements this year are going to come down,” he said.
“So I don’t think we saw anything this morning that fundamentally changes that.”
The FTSE 100 was three points higher at 8,771 come the afternoon.
11.45am: Wall Street on course to climb
Wall Street appeared on course to kick off the shortened week on a positive footing as Tuesday’s open approached.
Futures had the Nasdaq up 0.4% before the bell, while the S&P 500 and Dow Jones were seen 0.3% and 0.1% higher respectively.
The trio had climbed last week prior to the holiday weekend, as fears around tariffs under Donald Trump appeared to partially dissipate with plans for reciprocal measures against countries with levies on US goods.
Attention has turned to discussions around the Ukraine war though, with talks between Russia and the US in Saudi Arabia taking place on Tuesday.
“We are still in the very early stages of any potential negotiations, updates from today’s meetings will be worth watching closely,” XTB analyst Kathleen Brooks noted.
Gold ticked up 0.4% to US$2,912 an ounce, while benchmark Brent crude climbed 1.3% to US$75.57 a barrel on Tuesday as the talks loomed.
“The increase in the gold price and the price of oil are signs of anxiety in financial markets that a deal may not be reached, and the war could continue,” Brooks added.
10.59am: Thames Water bags lifeline as £3bn debt package approved
Thames Water has been granted approval by the High Court to draw on a £3 billion loan, offering London’s embattled supplier a lifeline after it had warned cash would run out by March 24.
Two tranches of £1.5 billion encompassing interest of 9.75% will be paid by creditors, with the first set to support operations until September this year.
The second will support an appeal to allow it to increase consumer bills by more than the 35% over the coming years granted by regulator Ofwat in December.
Having faced the threat of renationalisation on struggles with its £16 billion debt pile, chair Adrian Montague dubbed the emergency loan a “significant milestone” for Thames.
“Critically, it enables the management team to continue progressing the turnaround,” he said.
10.05am: FTSE 100 off the mark as eyes turn to US-Russia talks on Ukraine
London’s blue-chip index fell back from an early gain on Tuesday to sit just off the mark at 8,767 into late morning as traders looked to US-Russia talks over the war in Ukraine.
Having rallied across the continent on Monday as European leaders held emergency talks over the war, defence stocks faced a more muted performance into Tuesday.
In London, BAE Systems PLC and Rolls-Royce Holdings PLC gained 0.2% and 0.9% respectively, while Melrose Industries PLC and Chemring PLC also climbed as Babcock International Group PLC slipped.
Expectations of hiked defence spending in Europe had built ahead of this week’s discussions, after calls from US president Donald Trump for the continent to take more responsibility for its own security.
“Markets may have jumped the gun,” XTB analyst Kathleen Brooks said, “there are no guarantees that a deal will be reached to end the war during [Tuesday’s] talks in Saudi Arabia”.
Elsewhere in London, BT Group PLC remained the FTSE 100’s biggest faller, while Plus500 Ltd dropped 5.0% to head the mid-cap losers following results… Read more
Overall, the FTSE 350 slipped two points to 4,802, while the AIM all-share sat just below the mark at 725.
Frontier IP Group PLC was among risers on news Topps Tiles had launched a new range of floor tiles made by portfolio company Alusid… Read more
9.30am: BT hit with sell rating by Citi
BT Group PLC remained under pressure on Tuesday after facing a double whammy of a downgrade by Citi analysts and a stake cut by Morgan Stanley.
Flagging declining revenues in its Openreach division, Citi hit the telecoms firm with a ‘sell’ rating and downgraded its share price target from 200p to 112p in a note.
Openreach, which maintains telephone cables, was expected to face declining revenues over the year ahead and for the rest of the decade, according to Citi.
“[This] could see a negative shift in sentiment and questions as to whether BT will achieve its guidance for £3 billion of normalised free cash flow by the end of the decade,” it said.
Concerns around the long-term sustainability of pricing in BT’s consumer division were also cited, alongside expectations for restructuring costs to reduce significantly ahead.
Morgan Stanley also separately cut its stake in BT to below 5%, according to a Monday evening regulatory filing, from 5.0252% to 4.9897%.
Shares dropped 5.2% to 43.65p on Tuesday to place BT well ahead among the FTSE 100's fallers.
Overall, London's blue chips index slipped seven points to 8,760 as the likes of Intercontinental Hotels Group PLC, Airtel Africa PLC and J Sainsbury PLC also dropped.
9.04am: Labour market not ‘so bad’ despite gloom around economy
Tuesday’s employment data may offer a brighter picture as April’s employer national insurance hike clouds Britain’s labour market, ING economist James Smith has argued.
Citing talk of sweeping job cuts as employers brace for surging costs, he said: “The hard numbers on the jobs market currently don’t look so bad.”
Unemployment had remained stable in the three months to December, he flagged, while “more importantly” there was no discernible increase in redundancies.
ONS figures earlier in the day showed unemployment was flat at 4.4% over the quarter, while wage growth climbed to 6.0% and payrolled employees fell by 3,000.
“The major question is whether that changes as the tax and living wage changes come through in the second quarter,” Smith added.
8.38am: BHP drops as dividend slashed and profit hit on weak iron ore prices
BHP Group Ltd fell on Tuesday after unveiling a slump in interim profit and cutting its dividend on the back of weak iron ore prices.
Underlying attributable profit sank 23% to US$5.1 billion (£4.0 billion) in the six months to December 31 on an 8% drop in revenue to US$25.2 billion, BHP reported on Tuesday.
Though operating earnings from its copper division jumped 44% to US$5.0 billion, lower iron ore prices and weaker Chinese demand offset the increase.
Iron ore earnings tumbled 26% to US$7.2 billion, as average realised prices dropped 22% to US$81.1 a tonne.
Weaker demand from China and developed Asian countries was said to have weighed, with BHP noting a “plateau phase” was expected to remain in the near term.
A US$0.50 per share dividend was declared, marking BHP’s lowest in eight years and a US$0.22 drop against the first half of 2024.
Shares fell 0.7% to 2,073p on Tuesday.
8.14am: Stocks open on front foot; BT slumps after Morgan Stanley slashes stake
The FTSE 100 opened on the front foot as Tuesday’s session got underway, picking up 10 points to sit at 8,778.
A lack of major winners saw banks top the early risers, with Barclays PLC leading the way on a 1.8% rise.
BT Group PLC slumped 5.3% in the meantime to head the fallers, following news on Thursday evening that Morgan Stanley had cut its stake in the telecoms giant.
According to a regulatory filing, Morgan Stanley wound down its holdings in BT to below 5%.
Intercontinental Hotels Group PLC was also among Tuesday’s fallers, dropping 1.3% after news of a US$900 million share buyback and stronger earnings appeared to underwhelm.
Annual revenues increased 7% to US$2.3 billion over the last financial year, the Holiday Inn owner said Tuesday, as operating profit swelled 10% to US$1.12 billion… Read more
7.57am: Anglo American agrees $500mln sale of nickel business
Anglo American PLC has agreed to sell its nickel business for US$500 million (£396 million) under a wider bid to shift focus to copper and iron ore.
MMG Singapore Resources, a subsidiary of Hong Kong’s MMG Ltd, would buy the unit, which operates two ferronickel operations in Brazil, for US$350 million upfront, Anglo said.
A further US$100 million would be price-linked, with the remaining US$50 million contingent on final investment decisions for the businesses’ two development projects.
“The sale [...] marks a further important milestone towards simplifying our portfolio to create a more highly valued copper, premium iron ore, and crop nutrients business,” chief executive Duncan Wanblad commented.
Combined with a November agreement to sell its steelmaking coal business, Wanbald flagged Anglo was set to receive US$5.3 billion from the disposals.
“We are unlocking the inherent value of all of Anglo American as we create a much simpler, more resilient and agile business that will enable full value transparency in the market,” he added.
7.40am: Wage growth continues to cause 'headache' for BoE
Wage growth is likely to weigh on the Bank of England's scope to cut interest rates after pay across the UK increased faster than expected late last year.
Average earnings including bonuses climbed from 5.5% to 6.0% in the three months to December, against expectations for a shallower rise to 5.9%.
“Today’s figures shows that annual total wage growth remains strong,” National Institute of Economic and Social Research economist Monica George Michail commented.
“We expect wage growth to moderately slow but remain elevated at 5.2% in first quarter of 2025.
“Persistent strong wage growth has been causing a headache to the Bank of England, and will likely continue to do so in the next few months, leading the MPC to exercise more caution with regards to interest rate cuts.”
ONS director of economic statistics Liz McKeown noted pay excluding bonuses was up for a third time consecutively as wages also increased on a real basis when accounting for inflation.
Unemployment remained unchanged at 4.4% in the meantime, the figures showed, undershooting expectations for an increase to 4.5%.
Data also showed a drop in the number of vacancies, fall in payrolled employees and an increase in claimant count.
7.16am: FTSE 100 set for muted start as unemployment remains flat
London’s blue chip index was set for a muted start on Tuesday as figures showed UK unemployment remained flat over the last quarter of last year.
According to the Office for National Statistics, unemployment was unchanged at 4.4% in the three months to December, undershooting expectations for an increase to 4.5%.
Average earnings including bonuses climbed from 5.5% to 6.0% in the meantime, as those excluding bonuses increased from 5.6% to 5.9%.
Futures had the FTSE 100 off one point ahead of trading, following a 35-point gain to 8,768 in Monday’s session.
Overnight, Asian markets faced a mixed showing, with China’s Shenzhen dropping 1.6% as the biggest faller, as the Hang Seng index climbed by 1.0%.
5am: What to watch out for on Tuesday
Among the company results, FTSE 100 miner Antofagasta PLC (LSE:ANTO) is due to publish its finals. Ahead of the results, UBS expressed a preference for the Chilean copper over Rio Tinto, which it noted was contrary to the opinion of most other City firms.
In a fairly quiet week for macroeconomic data, there may be more of a focus on UK numbers, which include jobs market figures today.
There will be December unemployment and wage data, plus data from PAYE records for January. The consensus forecast is for the unemployment rate to have crept up to 4.5% from 4.4%, while average weekly earnings growth to have accelerated to 5.9% from 5.6% both including and excluding bonuses.
Quotes are also expected to be published from Bank of England governor Andrew Bailey mid-morning, following a 'fireside chat' in Brussels.
Tuesday 18 February
Finals: Antofagasta PLC, Intercontinental Hotels Group PLC, Plus500 Ltd
US earnings: Arista Networks Inc, Medtronic PLC, Occidental Petroleum Corp
Economic news: Unemployment Rate (UK), Wage Growth (UK), Claimant Count (UK), ZEW Survey (EU), Business Inventories (US)