- FTSE 100 adds 18 points at 9,147
- Wall Street higher after CPI reading
- Building stocks in demand
- Analyst cautions on retail sales figures
- UK jobs data underwhelms - again
4.48pm: FTSE 100 rises
The FTSE 100 added 18 points to finish Tuesday’s session at 9,147.
Over in the US, Wall Street welcomed softer-than-expected inflation data for July, with the three major stock indexes rising. July’s headline CPI was steady at 2.7% year-over-year while core inflation ticked up to 3.1%.
“US equities advanced on Tuesday, with the Dow, S&P 500 and Nasdaq each gaining ground after softer-than-expected inflation data reinforced expectations of a Federal Reserve rate cut next month,” IG senior technical analyst Axel Rudolph said.
“Sentiment was further buoyed by news that President Trump and Beijing had agreed to extend the suspension of steep tariffs on Chinese goods for another 90 days, through 10 November.”
2.40 pm: Car finance firm firmly on road to recovery
Peel Hunt has upgraded its recommendation on S&U PLC (LSE:SUS) from 'hold' to 'add', raising its target price from 1,500p to 2,000p after the company’s trading update, which pointed to improving momentum across its divisions.
The broker highlighted that both Advantage, the motor finance business, and Aspen, the property bridging arm, are delivering strong progress, with profitability expected to rise compared to last year.
Advantage is outperforming expectations, with loan advances reaching £71 million in the first half of the year and repayment rates returning to nearly 90%.
The shares were up 2% in afternoon trading.
1:00pm: Wall Street steady ahead of July's inflation print
US stock index futures were little changed on Tuesday as investors awaited the release of July consumer price index data.
Dow futures fell 25 points to 44,059, S&P 500 futures rose 5.5 points to 6,405.25, and Nasdaq futures dropped 13.87 points.
Global market sentiment was subdued. Optimism over Washington and Beijing extending their tariff truce to November was offset by caution ahead of the inflation data. In Asia, Japan’s Nikkei and Australia’s ASX hit record highs.
The US dollar traded flat in early dealings, while European and Asian markets showed mixed performance ahead of the New York open.
10.00 am: Retail sales caution
July’s retail sales figures offer a cautiously positive picture for British shops, though it’s far from plain sailing, according to Shore Capital’s Clive Black.
The latest British Retail Consortium and KPMG data showed a 2.5% rise in total sales year on year, comfortably ahead of the 12-month average of 1.9%. But as Black notes, this growth “barely touches the sides” when you consider the rising costs retailers face, largely driven by government policies.
Food sales led the way, with a strong 3.9% increase, much of it inflation-fuelled rather than volume-driven, reflecting the ongoing pressures from labour, energy, and business costs.
Meanwhile, non-food sales also showed welcome growth (up 1.4% overall) with physical stores outperforming online, possibly thanks to better weather encouraging footfall. Categories like gaming and computing performed well, while homeware held steady.
Looking ahead, Black flags the looming back-to-school season and possible tax hikes in the autumn budget as potential hurdles.
“If economic growth stalls and taxes rise, the consumer could face more pressure, which would weigh on spending,” he warns. With wage growth holding up but inflation still a drag, retailers face a tricky balancing act between maintaining margins and keeping customers spending.
8.55 am: Builders buoyed by Bellway
Bellway’s trading update brought an air of positivity to the housebuilding sector, piquing buying interest.
On the FTSE 100, Persimmon and Taylor Wimpey posted gains of 2%, while Barratt Redrow was up 1.6%.
Dropping down to the 250, Bellway led the way, rising 3.2%, with Vistry not too far behind.
Earlier, Bellway’s CEO Jason Honeyman described the company’s performance as ‘solid’ in the face of ‘industry headwinds’, including changes to stamp duty.
Revenue rose 17% to £2.7 billion in the year to July 31 as it completed 8,749 homes.
Peel Hunt in its results analysis, said the trading statement was notable for its lack of surprises.
“The group reiterated its intention to improve capital efficiency and asset turn, with more detail to come at the finals in October,” the broker said.
“In essence, the group aims to improve operating cash flow conversion over the medium term, and to optimise the balance between investment in growth and return to shareholders via both buybacks and dividends.”
8.01 am: Positive start
And we're off. The FTSE 100 made a positive, though rather tentative start, posting a 19-point gain at the open to move to 9,148.82.
Donald Trump's decision to pause trade hostilities with Beijing for a further 90 days appears to have buoyed London's traders after a broadly positive day on Asia's main markets.
On Wall Street after hours, the story was different, with the main indices drifting lower after their strong showing on Friday, and crucially, before the president extended the deadline with China.
7.40 am: Jobs market cools as NI hike kicks in
The UK labour market shows further signs of slowing down, with recent data from the Office for National Statistics revealing declines in both job vacancies and the number of employees on company payrolls.
Between May and July, the number of job vacancies dropped by 44,000, while payroll figures fell by 26,000 in June—a slightly larger decrease than the 25,000 seen in May.
Over the year to June, payroll employment fell by 149,000, with preliminary figures for July suggesting a further monthly decline of 8,000 and an annual drop of 164,000.
The unemployment rate remained steady at 4.7% for the period from April to June, unchanged from the previous quarter. Meanwhile, annual wage growth excluding bonuses held at 5%, matching the rate from the prior three months.
Rising labour costs have affected employers, following increases in national insurance contributions and the national minimum wage introduced in April as part of last year’s autumn budget.
7.10 am: Trump bump for London?
Donald Trump's decision to pause trade hostilities with Beijing for a further 90 days appears likely to put a pep in the step of London's traders after a broadly positive day on Asia's main markets.
On Wall Street after hours, the story was different, with the main indices drifting lower after their strong showing on Friday, and crucially, before the president extended the deadline with China.
The FTSE 100 looks set to open 19 points higher at 9,138.71, according to the spread betting firms.