- FTSE closes 63 points higher
- US futures point to strong start
- Babcock falls on Deutsche downgrade
- JD Sports rallies 7.5%
- Trump inks trade deal with China
4.50pm: FTSE 100 ends higher
London’s FTSE 100 climbed 0.7% to close at 8,799 on Friday, supported by a broad wave of optimism sweeping global markets. Midcap stocks reached a 10-month high as investors reacted positively to signs of easing geopolitical tensions, improving U.S.-China trade dialogue, and renewed expectations of rate cuts from the Federal Reserve. A rare earth deal between Washington and Beijing added to the upbeat tone, alongside strong gains in Asian and U.S. equities.
However, political tensions at home tempered the mood. Prime Minister Keir Starmer was forced to backtrack on proposed welfare cuts after a brewing rebellion from Labour MPs made a parliamentary defeat all but certain. The concessions, which slash the planned savings nearly in half, have raised fresh questions about the government’s ability to maintain fiscal discipline. Analysts warn that the reversal limits Starmer’s room to manoeuvre ahead of the Autumn Budget and could accelerate talk of tax hikes, potentially unsettling markets further if fiscal rules come under pressure.
1pm: S&P 500, Nasdaq predicted to reach new highs
Wall Street stock futures pointed higher early on Friday, with the broad-market S&P and the tech-heavy Nasdaq expected to reach new highs, buoyed by positive news on a trade deal with China and the fragile ceasefire in the Middle East.
S&P 500 futures were 0.34% higher an hour and a half before the market open, with those for the Dow Jones up by the same margin while Nasdaq futures traded 0.44% firmer.
US stocks closed just a whisker away from all-time highs on Thursday.
The S&P 500 climbed 0.8%, coming within striking distance of its February record close. The Nasdaq added 1%, hust a few points shy of its historic peak, while the Dow advanced 0.9%.
11.30am: Babcock declines on downgrade
I mentioned earlier that Babcock International PLC (LSE:BAB) led the decliners at the market open. I now know why.
Deutsche Bank has downgraded the defence contractor from ‘buy’ to ‘hold’, citing a 22% rise in the past month and a doubling over six months.
Despite strong revenue growth, better margins, and a £200m buyback plan, Deutsche said the shares look overextended. It raised earnings forecasts but set a lower target price of 1,115p.
Babcock's shares are currently 2.5% down at 1,120p.
The Footsie is now up 45 points at 8,780.26.
9.45am: Small Cap Headlines
Hercules PLC (LSE:HERC) has bought utilities contractor Advantage NRG for up to £15.7 million. The deal includes £10.2 million upfront, deferred payments, and earn-outs. Advantage NRG, which supplies skilled linesmen for UK power networks, earned £1.7 million pre-tax profit on £11.1 million revenue last year. CEO Brusk Korkmaz called it a key step as the UK upgrades its electricity grid. Read more
Arc Minerals Limited (AIM:ARCM) has reported an active year marked by progress in its Anglo American joint venture in Zambia, where initial drilling at the Cheyeza target delivered valuable data for future campaigns. The company also signed a binding deal to acquire the Chingola project. Chair Nicholas von Schirnding said shareholders can expect regular updates as exploration and drilling ramp up. Read more
EMV Capital (AIM:EMVC) backed Q-Bot has raised £350,000 in equity as part of a £1 million funding plan, with £865,000 of loans converted into shares. EMVC arranged the round and increased its stake to 30.2%, now valued at £1.4 million. The funding will help Q-Bot grow after adopting a leaner, technology-focused model to drive profitability. Read more
Seeing Machines Ltd (AIM:SEE, OTC:SEEMF) has started a six-week trial of its Guardian Generation 3 driver safety system with Mitsubishi Electric Automotive America. The AI-powered platform monitors driver attention to prevent accidents. This pilot follows February’s agreement letting Mitsubishi refer clients. Read more
Vinanz Ltd (LSE:BTC, OTCQB:VINZF) has boosted its bitcoin holdings to 65.03 coins after buying 5.85 bitcoin for $631,000 at an average price of $107,863 each. This forms part of its strategy to build a treasury alongside mining operations in the US and Canada. CEO Hewie Rattray said the aim is to provide transparent, listed exposure to bitcoin’s growth. Read more
Tap Global Group PLC (AQSE:TAP) has made its AIM market debut, with the crypto payments app maker’s equity now trading on the LSE under the symbol ‘TAP’. Tap Global offers a single app that integrates traditional money payments with cryptocurrency settlement services. So far, it has 0.39 million registered users and it aims to create a regulated bridge between fiat systems and cryptocurrency markets. Read more
9am: Fresh wind in their sails
Apart from news that the US has penned a trade deal with China, interative investor's Richard Hunter notes that there has been a flourish of more positive news that's pushing global markets to fresh highs. These include the fragile ceasefire in the Middle East, economic data in the US that suggests the economy isn't approaching stagflation territory, and suggestions from the White House of a possible extension to July's trade tariff deadlines.
"Investors have fresh wind in their sails, perhaps most starkly illustrated by the benchmark S&P 500 in the US, which has rallied by more than 20% since its April low to come within just a few points of its highest ever level," Hunter commented.
"The 30% rebound of the technology-heavy Nasdaq is even more striking, as the 'Magnificent Seven' have come back into fashion. Another record high for Nvidia, itself enjoying a bounce of more than 60% since April, was accompanied by notable buying in the likes of Meta Platforms and Apple."
The Footsie is now 42.5 points up at 8,778.11, a gain of 0.49%. That's 131 points shy of its best intra-day high back in March and just over 100 points below its best closing high two weeks ago.
In Europe, Frankfurt's DAX is up 0.8% while the Paris CAC 40 is 1.2% higher.
8.45am: JD Sports bounces on Nike hopes
More on that JD Sports bounce now. Its shares climbed as much as 7.5% in early trade, buoyed by signs that key US partner Nike may have turned a corner in its challenging turnaround effort.
Nike reported an 86% drop in quarterly profit to $211 million, largely due to deep discounts and efforts to clear excess inventory. Despite the steep decline, results beat Wall Street forecasts, and executives struck an optimistic tone about the months ahead.
Nike expects sales and earnings to stabilise, though it warned of new pressures from US import tariffs on Chinese goods, estimating a $1 billion cost this year.
"Overall, the double-digit sales decline for Nike has undoubtedly been a significant headwind for JD and there is still more work to do before the company sees a return to revenue growth and in continuing to clean the inventory position," commented broker Shore Capital.
"However, with this update, we do see early signs of an improving wholesale channel."
Nike shares jumped 10% during a post-results call as the company pledged to cut costs, rebalance its supply chain, and shift back to its roots in sports performance.
8.15am: FTSE opens higher
The FTSE 100 started the day higher on Friday, buoyed by a positive close on Wall Street as the summer rally continues for US stocks.
London's blue chip index added 30.4 points at the open, a gain of 0.35%, to 8,766.
JD Sports Fashion PLC (LSE:JD.) is leading the risers with a gain of more than 5% after US peer Nike Inc (NYSE:NKE, ETR:NKE) reported fourth-quarter and full-year results that have boosted investors' hopes that a turnaround plan is working, sending the US sports goods share more than 10% higher in pre-market trade.
Pearson PLC (LSE:PSON), Informa PLC (LSE:INF) and Barclays PLC (LSE:BARC) are also doing well this morning.
Babcock International PLC (LSE:BAB) is leading the decliners, down 1.7%.
8am: Unilever bets big on men's personal care
The Financial Times has reported the price tag on Unilever's acquisition of men's personal care brand, Dr Squatch: an eye-watering $1.5 billion.
The transaction, first announced on Monday, is part of Unilever’s strategy to grow its presence in premium and high-growth categories.
Citing ‘several people familiar with the details’ for the amount paid by Unilever, the Financial Times noted that Dr Squatch constituted another big bet on male grooming products after the company paid $1 billion to buy Dollar Shave Club back in 2016, only to sell it again in 2023.
7.30am: Trump inks China trade deal
Perhaps adding to the positive mood on equity markets, US President Donald Trump has confirmed a signed trade deal with China, ending months of talks.
White House adviser Stephen Miran hinted to Yahoo Finance that the US might extend its tariff pause for “good faith” negotiators but expects tariffs to stay near 10%.
Beyond China, the administration has locked in a trade pact with the UK. But talks with Canada are teetering. Canada is threatening new steel and aluminium duties if no pact is reached by late July. The EU has warned it will hit back if US tariffs stick, while Trump threatens levies up to 50% on European goods.
7.15am: FTSE called higher
The FTSE 100 is expected to edge higher at the open, taking its cue from a firmer finish on Wall Street last night as US equities approach their all-time highs on the prospect of interest rates being cut.
An 11-point gain is predicted for the blue chip index when trading gets underway, building on yesterday's 17-point rise to 8,736.
In the US, the S&P 500 climbed 0.8% overnight, coming within striking distance of its February record close. The Nasdaq added 1% to end just a few points shy of its historic peak, while the Dow Jones advanced 0.9%.
Investors cheered signs that interest rate cuts could be back on the table. A Wall Street Journal report suggested President Donald Trump may announce a replacement for Federal Reserve Chair Jerome Powell as early as September, reflecting his frustration with the Fed’s "wait and see" stance on rates.
"But Fed officials keep saying they’re not planning to cut rates before the fall ... So the rally looks stretched," commented Swissquote Bank's Ipek Ozkardeskaya.
"Happily, stretched doesn’t mean it won’t continue. If investors are fed a steady diet of sugar, asset prices could keep inflating. And Trump may eventually give them what they want."
Asian markets are mixed this morning. Tokyo's Nikkei is up 1.2%, but Hong Kong's Hang Seng has shed 0.33% and Shanghai's SSE Composite is down 0.67%.