- FTSE 100 sheds 57 points
- Centrica jumps as new buyback unveiled
- Lloyds surges despite extra motor provision
3.58pm: FTSE 100 on course for another decline as gold hits record
The FTSE 100 tumbled yet again on Thursday, entering late trading 57 points lower at 8,654.
Though Centrica PLC and Lloyds Banking Group PLC racked up solid gains, a string of companies trading ex-dividend weighed.
Outside of these, BAE Systems PLC dropped 4.2% and Rolls-Royce Holdings PLC fell as a boost earlier in the week on speculation around hiked European defence spending appeared to fizzle out.
At the other end, Centrica ticked up 5.6% as results brought hiked shareholder rewards, while Lloyds followed with a 5.2% gain after also impressing with figures.
Miners Endeavour Mining PLC and Fresnillo PLC also rose as gold hit yet another high of US$2,955 on looming fears of tariffs under Donald Trump before scaling back.
Mid and small caps followed London’s blue chips into negative territory come the closing stages of Thursday’s session.
There were bright spots though, with Greatland Gold PLC up 6.0% on drilling results West Dome and Pantheon Resources PLC adding 6.5% after naming a new chief executive… Read more
3.03pm: Dow Jones drops as Walmart weighs in negative start on Wall Street
US stocks kicked off Thursday’s session on the back foot, with the Dow Jones leading the drop on Wall Street as Walmart Inc was among those to weigh on the index.
Dow fell 0.4% following the opening bell, as the S&P 500 and Nasdaq dropped 0.3% and 0.1% respectively.
Walmart, a constituent of the 30-company strong Dow, was among the fallers, dropping 6.1% as cautious guidance overshadowed expectation-beating fourth quarter figures.
Net sales were seen climbing 3.0% to 4.0% over the coming year, it said, after a 5.6% increase to US$684.2 billion for the year just gone.
Elsewhere, Epam Systems Inc was among initial losers on the back of results, dropping 11.7%, while Hasbro Inc surged 11.1% after topping estimates with fourth quarter figures.
2.14pm: Junior stocks rise up as FTSE 100 and mid caps stuck lower
London’s small-caps continued to fare better than their blue chip counterparts into Thursday afternoon.
The FTSE 100 sat 39 points lower at 8,673, as the FTSE 250 and 350 both also dropped, while the AIM all-share sat just above the mark at 720.
Among the blue chips, it was still Centrica PLC, Lloyds Banking Group PLC and Anglo American PLC leading gainers after results earlier on.
Wood Group PLC was towards the top of the mid-cap risers in the meantime, following a volatile few days in the wake of last week’s profit warning.
Shares jumped 10.4%, as Thursday bought news its chief financial officer had stepped down but that it had also penned a US$120 million contract extension with Shell UK… Read more
In the small-cap space, Greatland Gold PLC held on to an 8.2% gain on strong drilling results from the company’s first underground exploration at West Dome… Read more
1.20pm: Lloyds surges as solid figures overshadow motor woes
Additional provisions to cover a potential hit from a probe into historic motor finance deals did little to deter investors from Lloyds Banking Group PLC on Thursday.
Shares jumped 7.1% in the wake of full-year figures, where it said an extra £700 million had been set aside in the fourth quarter to cover possible remuneration.
Though these also showed deteriorating profit, in part as rate cuts hit its interest margin, analysts flagged figures trounced expectations when excluding the latest provision.
Underlying fourth quarter pre-tax profit of £993 million was 25% below consensus, Peel Hunt analysts acknowledged.
“However, adjusting for an unexpectedly high provision for motor finance [...] there was a beat of around 13%.”
Lloyds also unveiled a further £1.7 billion buyback and increased its full-year dividend by 15% to 13.17p, which Shore Capital highlighted was better than anticipated.
“[This] suggests management is not overly concerned about the motor finance issue spiralling out of control,” Shore Cap said.
Shares climbed to 67.30p on Thursday.
12.29pm: Wall Street set for subdued start
Mood on Wall Street appeared subdued ahead of Thursday’s session after Federal Open Market Committee meeting minutes firmed up caution towards interest rate cuts ahead.
Futures had the S&P 500 dropping 0.3% ahead of the bell, after the index notched up yet another record on Wednesday.
The Nasdaq and Dow Jones were each also seen falling 0.3% in the meantime.
Wednesday had seen FOMC minutes for its last meeting, when interest rates were held, published to show caution among central bankers.
Members had flagged “upside risks to the inflation outlook,” namely as the impact of sweeping tariffs under president Donald Trump loomed.
11.42am: BP at crossroads on mounting activist pressure
Having emerged at the centre of activist pressure from several directions in recent days, speculation over the likes of impending disposals or spin-offs at BP.
Citing reports that hedge fund Elliot Management had become a top three shareholder, RBC analysts flagged growing uncertainty around BP’s next move to appease activists.
Three potential options appeared to have arisen, RBC said, including the sell down of BP’s marketing and convenience division, divestment of Castrol or a spin-off of its shale unit.
“We think monetizing part of BP’s marketing segment through disposals would make sense, however we would note that this segment generates [...] stable earnings,” it added.
“Divesting Castrol makes less sense to us at this juncture given earnings have declined substantially over recent years, and so headline accretion may be a function of depressed near term earnings.
“A BPX listing in the US could help replicate the success of AkerBP,” RBC also noted, after the unit was spun off on the Oslo Stock Exchange in 2016.
Elliot’s demands appeared unclear though, RBC warned, with broad-based pressure said to be around the likes of accelerated cost cutting and reduced spending on green projects.
BP has also come under pressure from climate activists, with a group collectively holding 2.5% in the oil giant this week calling for a vote on any plans to cut climate targets ahead of its investor day next Wednesday.
10.38am: FTSE 100 remains downbeat
A string of big-name risers failed to buoy the FTSE 100 on Thursday, as the index remained 22 points down at 8,690 into late morning.
Despite gains from Centrica PLC, Lloyds Banking Group PLC and Anglo American PLC, the likes of Imperial Brands PLC, BP PLC and AstraZeneca PLC went ex-dividend.
Centrica PLC sat 8.2% higher come late morning after ramping up shareholder rewards in results, while fellow reporters Lloyds and Anglo added 4.0% and 3.2% respectively.
London’s mid-caps faced mixed fortunes in the meantime, with the FTSE 250 up but FTSE 350 down, while small caps enjoyed a brighter day than their larger counterparts as the AIM all-share gained.
Greatland Gold PLC remained a bright spot, jumping 9.8% on drilling results from the West Dome project… Read more
Pantheon Resources PLC surged 5.0% meanwhile, after unveiling a new chief executive officer as it prepares for a possible US listing… Read more
9.40am: Anglo American among risers after another De Beers write down
Anglo American PLC climbed after signalling another write down for its De Beers diamond unit in search of a buyer in results on Thursday.
A US$2.9 billion impairment charge had been booked, Anglo said on Thursday, marking the second write down in two years in a bid to offload the unit under a wider reshuffle.
“The work to separate De Beers is well under way,” chief executive Duncan Wanblad said, adding the write down came “given prevailing diamond market conditions”.
Figures also showed revenue down 11% at US$27.3 for the year to December 31, as impairments fuelled a swing to a US$3.1 billion loss, against 2023’s US$283 million profit.
Anglo has sought a rapid turnaround after a £39 billion takeover attempt by rival BHP last year, which includes plans for sales of its steelmaking coal assets and nickel wing, alongside the spin-off of its platinum arm.
“We are making excellent progress with our portfolio simplification,” Wanbald added, “in terms of growth, we are progressing our considerable pipeline of high-quality options”.
Shares climbed 3.3% on Thursday to place Anglo behind only Centrica PLC among the FTSE 100's risers.
Overall, the index slipped 17 points to 8,695.
9.20am: Trump flags talks with China over TikTok
Donald Trump has said he is in talks with China over video-sharing app TikTok.
Having postponed a de facto ban on the app, which is used by almost half of Americans, the president flagged up talks to reporters aboard Air Force One on Wednesday.
TikTok was briefly been taken offline in the States last month after a deadline passed for Beijing-based owner ByteDance to sell the app or see it banned in the US.
National security concerns had been raised around China potentially accessing US user data from TikTok.
Services resumed after Trump signed an executive order to allow ByteDance more time to find a buyer, with the president having since signalled the US could take a stake in TikTok.
8.52am: Consumer confidence takes another beating
Consumer confidence fell to its lowest in 11 months in February on fears around the likes of higher energy prices and employer national insurance.
According to the British Retail Consortium, consumer confidence towards the state of the economy stooped from -34 points to -37 between January and February.
This marked the fifth straight monthly decline, as sentiment around personal finances also fell, while expectations for personal spending on retail increased.
“With many businesses warning of the impact that April’s employer national insurance contributions increase will have on hiring, and the rising energy price cap pushing up the cost of domestic bills, it is little surprise that many households are worried,” BRC head Helen Dickinson said.
“And while there was a positive increase in expectations of personal retail spending, this may be largely driven by the expectations of higher prices in the future.”
She added two-thirds of retailers had signalled price increases in response to some £7 billion in additional costs, including from higher tax bills.
“Almost half of retailers also warned of hiring freezes, with entry-level jobs often among the first to go as they seek any cost efficiencies to help them protect customers.”
8.26am: FTSE 100 heads lower early on
London’s blue chips continued to face pressure as Thursday’s session got underway, with the FTSE 100 heading 30 points lower to 8,682 initially.
Imperial Brands PLC, AstraZeneca PLC, BP PLC and BAE Systems PLC topped the early fallers, while Centrica sat firmly ahead among the risers.
Shares in the British Gas owner were up almost 9.0% just after the open, after results showed normalising full-year profit but hiked shareholder rewards unveiled.
Lloyds Banking Group PLC also headed higher, gaining 2.0% following results, where it said profit dropped a fifth last year and set aside extra for a motor finance probe.
FTSE 250 firms enjoyed a brighter start alongside London’s small-caps, with the mid-cap index up 31 points at 20,739 and AIM all-share adding two points to sit at 721.
Greatland Gold PLC was among the junior market’s winners, jumping 9.2% after flagging “exceptional” first underground drilling results from the West Dome project… Read more
8.13am: Centrica jumps as shareholders reap rewards in results
British Gas owner Centrica PLC surged on Monday after unveiling a new £500 million buyback and upping its dividend after growing net cash last year despite flagging profit.
An additional £500 million worth of shares would be repurchased to take its current buyback programme to £2.0 billion, the energy firm said in results on Thursday.
A full-year dividend of 4.5p per share was declared in the meantime, against 4.0p in 2023, as net cash increased by 4.2% to £2.9 billion.
Profit was lower for the year though, which Centrica said reflected a “more normalised backdrop” after it had benefited from heightened energy prices in recent years.
Operating profit slipped 43.6% to £1.6 billion on an adjusted basis, as pre-tax earnings dipped just over a third to £2.3 billion.
Guidance was held on the back of the figures, including for plans to increase its dividend to 5.5p per share in 2025.
Shares surged 8% to 146.8p on Thursday.
7.50am: Lloyds profit tumbles as millions more put towards motor finance probe
Lloyds Banking Group PLC has said profit fell a fifth last year and set aside hundreds of millions in the final quarter to cover a potential hit from motor finance mis-selling.
Statutory pre-tax profit tumbled 20% to £5.97 billion in the year to December 31, the lender said Thursday, against company-compiled consensus expectations for £6.39 billion.
Underlying net income slipped 7% to £12.85 billion in the meantime, while rate cuts saw its banking interest margin drop from 3.11% to 2.95%.
Lloyds also unveiled an additional £700 million provision in the final quarter against possible remediation from a probe in historic motor finance commission agreements.
This left the total set aside to cover the potential hit at £1.15 billion, which Lloyds said was its “best estimate” of the impact ahead of the latest Supreme Court hearing next month.
A new £1.7 billion buyback was unveiled despite the flagging figures, while a 2.11p per share final dividend was declared to take the full-year pay out to 13.17p and up 15%.
For the year ahead, Lloyds said underlying net income of £13.5 billion was expected, alongside an increase in operating costs from £9.4 billion to £9.7 billion.
7.15am: FTSE 100 set to creep up
Futures had the FTSE 100 creeping up by two points ahead of Thursday’s open, after a 54-point drop took London’s blue-chip index to 8,712 on Wednesday.
Dashed hopes for a Bank of England interest rate cut next month had weighed, dragging the likes of housebuilders down, after figures showed inflation hit 3.0% in January on Wednesday.
Wall Street then enjoyed a positive session, despite Federal Open Market Committee meeting minutes signalling caution on US interest rate cuts and ongoing tariff threats from Donald Trump.
Sentiment faced pressure in Asia though, after the latest proposals from Trump earlier in the week to target autos, chips and pharmaceutical imports, with stocks largely down overnight.
5am: What to look out for on Thursday
Lloyds Banking shares have risen over 50% in the past 12 months to almost a six-year high, though answers are wanted by investors about questions over motor finance provisions, the tailwind from the interest rate 'structural hedge' and potential share buybacks...read more
There will also be final results from Anglo American, fresh from recent news on the sale of its nickel business and progress to do the same with its platinum division, enabling it to pay out $900 million to shareholders.
Thursday 20 February
Trading update: Indivior PLC, Safestore Holdings
Interims: Hays PLC
Finals: Anglo American PLC, Centrica PLC, Lloyds Banking Group PLC, Mondi PLC
US earnings: Walmart, Alibaba, Birkenstock, Block Inc, Booking Holdings, Dropbox, Hasbro, Live Nation, Newmont Corp, Rivian, Shake Shack
Shareholder meetings: Corcel, Home REIT, Marlowe, Mindflair
Economic news: Continuing Claims (US), Initial Jobless Claims (US), Philadelphia Fed Index (US)