- FTSE 100 climbs 47 points to 9703
- Housing market demand weakest in two years
- Entain leads fallers as CFO steps down
4.52pm: Stocks recover
The FTSE 100 finished Thursday’s session 47 points higher at 9,703 as markets bounced back after retreating overnight following Oracle’s earnings.
“The Dow has managed to push to a new record high, benefiting once again from the outbreak of bubble fears in tech stocks and the more positive view on US economic growth for the year ahead outlined in the Fed decision last night,” IG chief market analyst Chris Beauchamp said.
“Volatility is reversing too, though worries that Broadcom will repeat Oracle’s performance have kept the recovery in tech stocks in check for the moment.”
4.16pm: FTSE on the up
The FTSE has reclaimed the 9,700 mark, last seen at the end of last week.
Top risers on the index are US-focused or US-exposed names like Ashtead Group, JD Sport, IAG, IHG and Diageo, plus precious metals miners Fresnillo and Endeavour.
Market analyst Patrick Munnelly says the London's benchmark is "supported by remarks from US Federal Reserve Chairman Jerome Powell, which hinted at a less aggressive monetary policy stance than anticipated".
US markets are still mixed, with the Dow up 1% but the Nasdaq down over 1%.
Fawad Razaqzada says whether US equities can pick up again "will depend in part on Treasurys", as rising government bond yields "typically spell trouble for high-growth tech names".
3.20pm: Bank of England meeting in a week - 90% bets on a cut
The Bank of England’s monetary policy committee is expected to cut interest rates to 3.75% at its meeting next Thursday, 18 December, though the fourth cut of the year is likely to be another close-run thing.
Financial markets are widely expecting a cut, but many economists reckon the vote will be a 5-4 majority, with BoE governor Andrew Bailey having the casting vote.
At the last two meetings, rates were held at 4.0%, with November's MPC seeing a 5-4 vote to hold rates, shifting from a 7-2 majority in September.
Barclays, HSBC and BNP Paribas are among those seeing a narrow 5-4 majority with Bailey switching from a hold to vote for a cut.
BNP said the committee's guidance is likely to remain broadly unchanged but will “lean hawkish, emphasising data dependence and a higher bar for cuts as policy approaches neutral.”
2.47pm: FTSE gains as US tech stocks sold off
The FTSE 100 has ticked up as investors move money out of US stocks.
To be fair to Wall Street, it's a mixed picture, with the blue-chip Dow Jones up 0.7% and small cap Russell 2000 up 1.3%, while the more tech-tilted Nasdaq is down 0.8% and the broader S&P 500 is off 0.3%.
This continues the trends seen yesterday (and highlighted in the update below).
On the Nasdaq 100, the biggest fallers are bitcoin investor Strategy, chip designer ARM Holdings and Temu owner Pinduoduo.
Chipmakers Advanced Micro Devices, Broadcom, NVIDIA are all down around 3%, follwed by Lam Research, Palantir, Intel, The Trade Desk, Applied Materials and GlobalFoundries, all down over 2%.
Top of the Dow leaderboard are Visa, Disney and Home Depot.
2.28pm: Decoding the market to the Fed decision
There was a message from the market reaction to the Fed decision, says Kenny Polcari at Slatestone Wealth.
While the S&P gained 0.7%, the Dow Jones, Russell 2000, Equal Weighted S&P and Transports indices all jumped over 1% compared to the Mag 7 rising 0.2%.
"That, boyz and girlz, is not noise, it’s a message," says Polcari.
"When the Dow, the Transports, the Russell, and the Equal Weight S&P all outperform by a wide margin, it tells you that leadership is broadening and that suggests a healthy market.
"Yesterday was not another AI-driven, tech mega-cap melt-up...not because anything is wrong with them, but because investors are finding value in other sectors.
"Cyclicals, industrials, financials, transports – the groups that need real economic activity to thrive — came alive," he says, pointing to basic materials, industrials, financials, healthcare and consumer discretionary all up over 1%, while tech was only up 0.5%, Consumer Staples 0.3%, communications 0.6%, real estate 0.2%, uilities flat.
1.37pm: How European investors should invest in AI
UBS has set out a roadmap for how European investors should position for 2026, arguing that artificial intelligence will remain one of the biggest drivers of long-term returns, but that the next wave of automation is beginning to open up as well.
The strategy, laid out in its latest Investment Strategy Insights, is pitched squarely at everyday investors who want to understand how a global wealth manager is preparing client portfolios for the years ahead.
"With many of the major companies in the AI value chain based in the US and China, we believe EMEA investors should focus on allocating the 'right' amount to AI stocks for 2026, lest they be underallocated to this important potential driver of long-term wealth creation," is the central message.
The bank expects spending on AI infrastructure to reach $1.3 trillion by 2030 and believes the overall market could grow at 30% a year.
UBS highlights Chinese technology stocks as one of its high-conviction idea for 2026, noting that innovation accelerated last year and earnings growth of nearly 40% is expected. Despite a strong run, valuations still sit well below global peers.
12.48pm: Starling looking to acquire lending strength
Starling Bank is on the acquisition trail, according to the Financial Times, sniffing around for a UK lender to put its £12 billion pile of customer deposits to work.
The neobank is examining several options, the report says, with one source describing a potential deal as “substantial”.
An acquisition is seen as a faster route to growth than organic expansion, people familiar with the plans told the paper, with Starling struggling to grow its loan book fast as it would like.
Just £4.7 billion of its deposits were net loans, according to its latest accounts.
(What about a merger with Shawbrook?)
12.02am: FTSE flat, US futures dragged down by Oracle
The FTSE 100 is a little above the flat line as midday comes, while US futures are in the red.
S&P 500 futures are down 0.4% and Nasdaq futures are pointing to a 0.7% decline, which is off the worst seen a few hours ago.
Dow Jones futures are just below flat.
Oracle shares are heading for a fall of around 12%, according to premarket trading, as strong numbers overnight were not quite enough.
"Anyone looking to Oracle for a positive prophecy on the AI sector will have been left feeling disappointed as it struck a conservative tone alongside its latest earnings," says Russ Mould at AJ Bell.
With revenue lower than expected and some big spending on data centre, the market was "in no mood to be forgiving", he says, with disappointment also that revenue forecasts for the current financial year remain unchanged, with borrowing growing at pace.
"Oracle’s shares have now dropped more than 40% since peaking around the announcement of its $300 billion deal with OpenAI in September."
Some people - prominently led by the likes famous short sellers Michael Burry and Jim Chanos - are also growing concerned about AI 'vendor financing', where companies invest in customers who use that money to buy more products.
Mould recalls that the late 1990s dotcom boom saw internet equipment giants engage heavily in this sort of activity, "and while this helped boost demand in the near term, it then exacerbated the resulting crash".
10.45am: Google Deepmind collaboration with UK government
A new "partnership" was announced today between the UK government and Google's DeepMind, which is building its first "automated research lab" in the UK.
The AI arm of the Alphabet Inc (NASDAQ:GOOG) company, which was founded in the UK in 2010 and was acquired by Google in 2014, will open the lab next year, populated by a team of researchers uding technology and robotics to make cutting-edge work more productive and efficient.
It will focus on developing new cutting-edge superconductor materials which can carry electricity with zero resistance, to make computer chips more efficient with lower overall running costs, as well as helping deliver low-cost medical imaging or boosting renewable energy technologies.
The government said DeepMind will work on cutting-edge AI-enabled research in areas like fusion energy, developing a potential for a new AI system to automate routine bureaucratic tasks and free up civil servants' time, and develop a version of Gemini to do similar to free school teachers from spending as much time on admin.
UK scientists will also be given priority access to Google DeepMind’s existing cutting-edge AI models as part of the deal.
Prime Minister Keir Starmer said: "This partnership will make sure we harness developments in AI for public good so that everyone feels the benefits.
"That means using AI to tackle everyday challenges like cutting energy bills thanks to cheaper, greener energy and making our public services more efficient so that taxpayers’ money is spent on what matters most to people."
10.16am: Markets sluggish, Oracle blamed
Explaining the sluggish European markets and depressed US futures, market analyst Kyle Rodda at Capital.com says: "It’s the one you don’t see that knocks you out. It’s an axiom true in boxing, life and markets.
"Last night, while hardly knocked-out, the markets were knocked about after Oracle’s results rained on the Fed’s parade.
"It showed that cloud growth was a bit lower than expected and outlays for AI investments picked-up: in essence, stoking fears, which had recently simmered down, related to the AI-ROI trade."
Oracle shares are down 12% in premarket trading.
Neil Wilson at Saxo also focuses on these numbers, where soft cloud growth is "indicating it could take longer than expected to generate the profits required to justify the AI capex".
Oracle still has a lot in the pipeline, with contracted revenue not yet been recognised soaring 438% to $523 billion.
"This was by no means a terrible report, but it reinforces doubts about AI spending and bubble concerns," says Wilson, with Nvidia, AMD, CoreWeave all taking a hit.
Both sterling and the euro have rallied to two-month highs against the weaker dollar.
Gold picked up overnight after the Fed meeting but has given back a bit.
9.23am: US company Power Probe joins AIM
Power Probe PLC has completed its IPO and started trading on AIM this morning, with shares in the US-based microcap rising 3% to 84.5p.
The automotive diagnostics specialist, which is headquartered Charlotte, North Carolina, raised £11.2 million through a placing of new shares at 82p per share, which gave a debut market capitalisation of approximately £60 million.
Proceeds are earmarket to fund a new US manufacturing facility, support expansion into new markets, and bolster research and development.
Chief executive officer Chema Garcia said admission to AIM "marks a new chapter" in its growth path and "will enable us to deliver on our ambitious growth plans".
8.48am: Housing market mixed signals
Some mixed signals in the Royal Institution of Chartered Surveyors (RICS) report.
UK housing demand fell to its weakest level in two years in November, according to the survey of surveyors, who expect the market to remain subdued into next year.
A net balance of 32% of surveyors reported a decline in new buyer inquiries, the worst reading since late 2023. Pre-Budget uncertainty and affordability pressures were seen as key factors.
RICS chief economist Simon Rubinsohn said: “The housing market has been struggling for momentum for several months, and the recent Budget announcements are unlikely to materially shift that picture.”
But economist Elliott Jordan-Doak at Pantheon Macroeconomics said he sees "some positive signs for the housing market" in the RICS data, which he says has been more downbeat than other reports from the likes of Nationwide and Rightmove.
"We think the market remains stable, if subdued. But sentiment should improve somewhat in the coming months now that the Budget has been passed and some of the rumoured worst-case property tax increases are off the table, giving homebuyers more certainty over policy."
8.15am: FTSE dips lower at open
The FTSE 100 has opened in the red, down 14 points at 9,641.3.
The biggest early fallers are led by Entain PLC (LSE:ENT) and Associated British Foods PLC (LSE:ABF).
Ladbrokes owner Entain has announced that finance chief and deputy CEO Rob Wood is leaving after 13 years with the bookmaker.
Michael Snape, currently chief financial officer at Royal Mail owner International Distribution Services, has been appointed as replacement, with effect from 6 March, and a CFO designate in February.
Primark owner AB Foods has been hit by a 'sell' rating from Citi.
7.59am: PZ and Avon
A couple more company stories.
PZ Cussons (LSE:PZC) has decided to keep hold of its Africa business after a strategic review by the board determined that offers received did not reflect the business’s underlying value.
The soap and shampoo maker said it is now targeting long-term growth in its African markets, particularly Nigeria, Kenya and Ghana.
And Avon Technologies PLC (LSE:AVON) has won a $20.6 million (£15.3m) order for FM50 respirators and FM61EU filters from a European government via the NATO Support and Procurement Agency (NSPA) contract.
The order will be delivered across the FTSE 250 company's 2026 and 2027 financial years, which it said underpins its financial guidance for 2026 issued last month.
7.48am: Drax set to beat forecasts
A busy trading update from Drax Group (LSE:DRX), which says it expects underlying profit this year to come in around the top end of forecasts, driven by the performances of its flexible generation and biomass pellet businesses.
The company also reaffirmed a £3 billion free cash flow target between 2025 and 2031, of which more than £1 billion is planned to be returned to shareholders and the rest allocated for investments in growth, including energy security and data centres.
Having previously evaluated options, including the potential sale of its open-cycle gas turbines, the group said it now plans to keep the OCGTs as grid-balancing assets to enable increased use of intermittent renewables in the UK system, such as wind and solar farms.
Elsewhere in the group, a planning application is being prepared for a potential 100MW data centre at its North Yorkshire power station, with long-term ambitions to scale capacity to more than 1GW post-2031.
7.26am: What happened with the Fed
Last night, the US Federal Reserve cut its policy rate target by 25 basis points to 3.50-3.75%, as widely anticipated.
President Trump's appointed Governor Stephen Miran voted for a larger 50bp cut, while two regional Fed presidents dissented in favour of holding rates.
"We (and the markets) had expected Powell to push back against market pricing further rate cuts for 2026," said Danske Bank.
"However, his avoidance of strong forward guidance led to a decline in UST yields and broad USD weakening during the press conference.
The Fed also announced reserve management purchases of T-bills starting 12 December at $40 billion per month, which Danske said indicated more front-loaded easing to liquidity policies than anticipated.
Jim Reid at Deutsche Bank notes that the cut was accompanied by "implicit signals that the Fed could remain on hold in early 2026", with the 'dot plot' showing a median expectation of only one more rate cut in 2026, while the statement included new wording that "signaled a possible pause ahead".
Fed President Jerome Powell also emphasised that the FOMC was "well positioned to wait and see how the economy evolves” as recent easing had brought the policy stance "within a broad range of estimates of neutral".
However, Reid also notes that "this cautious guidance was accompanied by several dovish-leaning elements", including a more optimistic tone from updated economic projections, with real GDP revised higher, while inflation forecasts revised lower.
"The statement also dialed up the tone on the recent uptick in unemployment while Powell sounded a bit more sanguine on upside inflation risks."
7.16am: FTSE poised for flat start, US futures fall after Fed decision
The FTSE 100 is not expected to follow the market rally seen after the US Federal Reserve decision last night.
After the US central bank cut interest rates by a quarter of a percent and made some dovish hints about the path for rates next year, Wall Street banked some solid gains.
The Dow Jones jumped 1.1%, while the S&P 500 added 0.7% to move just shy of a record high, while the Nasdaq rose 0.3%.
London's blue-chip index has been called five points lower on the futures market on Thursday, which would undo some of the 13.5 points added the previous day when it closed at 9,655.53.
US futures are also now pointing to a decline, as the market has spent more time digesting the Fed move and other factors, such as Oracle's mixed earnings.
Asian markets are mixed, with Japan's Nikkei down 0.9%, the Hang Seng down 0.1% in Hong Kong, but India's Sensex up 0.55%.