- FTSE 100 up 61 points at 10,585
- Defence stocks well bid
- Mitie succumbs to £3.1bn bid
- SEGRO under scrutiny
- Jobless total ticks up
5.15pm: On the up and up
London stocks finished the day higher as a rise in oil prices did not prompt the usual sell-off of equities, with the FTSE 100 up 61 points at 10,585.
“Traders have been treated to an odd sight today as oil prices rise in tandem with equities and precious metals, IG chief market analyst Chris Beauchamp said.
“Usually the former rises at the expense of the latter two, but then this week was always going to be a tug-of-war between earnings season and the news from the Middle East. While both sides continue to work their way through their weapons stockpiles, it seems like neither want to start climbing the escalation ladder.”
4.08pm: Strong run into the final furlong
Taking its cue from the US, the FTSE 100 put on a spurt in the final hour to trade a near-session-high of 10,559.55, up 45 points as defence stocks led the way following the appointment of John Healey as the new chancellor.
Seen as a safe pair of hands, he was also defence secretary and resigned under Sir Kier Starmer after deeming the budget for new planes and warships inadequate to meet new global threat levels.
The City has given a cautious welcome to Healey's appointment, hoping the Number 11's seventh occupant this decade can finally deliver some stability.
Senior figures voiced relief that Prime Minister Andy Burnham had chosen Healey over candidates seen as more interventionist, notably Ed Miliband.
Peel Hunt chief executive Steven Fine told Bloomberg the former defence secretary was a sensible pair of hands who knew his way around the Treasury.
The sentiment was echoed throughout the Square Mile.
2.55pm: Who's winning the grocery war?
Grocery inflation stayed under control last month even as the FIFA World Cup and a heatwave sent tills ringing, according to Shore Capital's read of the latest NIQ data.
The broker said UK supermarket sales rose 4.6% by value in the four weeks to 11 July, with welcome volume growth of 1.1% and price running at around 3.5%.
Seasonal lines were the standout, as football gatherings and sunshine lifted confectionery, snacks and soft drinks 7.3%, frozen food 7.0% and alcohol 5%, with lager up almost 13%.
Shore Capital pointed to Marks & Spencer and Ocado Retail as the clear winners, growing 16.7% and 17.3% respectively over 12 weeks, while Asda and Aldi lagged.
Asda sales fell 2.4%, and Aldi managed just 0.9%, with the broker sensing that Lidl, up 9.1%, is becoming a growing threat to its German rival.
Shore Capital said the figures broadly supported its earnings expectations for the major listed grocers.
On the markets, it was a solid and positive start to trading on Wall Street with the Nasdaq leading the charge with a 0.6% gain. Here at home the FTSE 100 was on the green side of parity.
1.52pm: Wall Street headed for positive open
Across the Atlantic, US stock futures pointed higher as a revival in chip stocks helped steady nerves rattled by fresh tariffs and Middle East tensions.
Nasdaq 100 futures jumped 1.3%, with semiconductors back in favour after South Korea's KOSPI closed more than 3% higher overnight. Nvidia edged up before the bell after taking a stake in neocloud provider Nebius.
The tech optimism offset unease over President Trump's surprise 50% tariffs on Canadian goods, from beer to hockey sticks, and a flare-up in the US-Iran war that pushed Brent crude back towards $90 a barrel.
Investors now await earnings from General Motors, Halliburton and 3M, with Alphabet's numbers on Wednesday the week's big draw as scrutiny of AI spending intensifies.
12.30pm 24-5 party people
The London Stock Exchange's plan to introduce overnight trading for exchange-traded products drew a cautious welcome from Hector McNeil, co-founder and co-chief executive of issuer HANetf.
He said extended hours would give retail investors greater flexibility, particularly around market-moving events outside UK hours.
The open question, he added, was whether market makers would provide consistent pricing overnight, without which liquidity could prove thin at first. He called longer trading hours an inevitable direction of travel.
11.05am: AIM pillaged
A taster of some research we received from UHY Hacker Young. It tells use the number of companies on AIM has collapsed to just 612, down from a peak of 1,694 in 2007, as foreign buyers pick off London's junior market for bargains faster than new arrivals can replace them.
The scale of the retreat was underlined last week when two more of AIM's strongest performers agreed to fall into American hands.
Ramsdens Holdings, the Stockton-based pawnbroker and jewellery retailer, backed a sweetened £232 million offer from US rival FirstCash, while Gooch & Housego, the Somerset photonics group that makes precision optics for aerospace and defence, agreed a £346 million takeover by US private equity firm Arlington Capital Partners.
Both deals feed a trend that new research confirms has become the defining feature of AIM's long decline.
UHY, a national accountancy group, found that 767 junior companies have been acquired in the past 20 years.
Takeovers now account for 36% of the 2,129 delistings recorded over that period, outstripping every other reason for companies leaving the market.
The concern is that the pool of quality AIM companies is thinning fast, with too few flotations to make up the numbers.
9.26am: Defence stocks on the rise
Sterling and gilts steadied after Andy Burnham sprang a surprise by naming John Healey as Chancellor.
Healey has repeatedly pushed for defence spending to hit 3% of GDP, resigning from Keir Starmer's cabinet over the issue and backing the idea of war bonds.
Markets read the appointment as a clear signal of a bigger defence budget, and the sector rallied hard.
Babcock jumped 6%, with BAE Systems, Chemring and QinetiQ all higher.
The lift was not enough to drag up the wider FTSE 100, which slipped 0.4% as a tenth day of US strikes on Iran soured risk appetite.
Nervousness is building about the spending implications of Burnham's early pledges, from cutting VAT on energy to free social care, much of it as yet unfunded.
That fiscal premium could push gilt yields back towards their May peaks, especially with oil prices climbing again.
Borrowing data offered a rare crumb of comfort, with June's £16 billion coming in £300 million below forecast.
8.18am: Lacklustre start
London opened 22 points lower at 10,502 on Tuesday, on a busy day for corporate news, weak economic data and a key policy announcement from new Prime Minister Andy Burnham.
Burnham is set to unveil a raft of cost of living measures, having promised "breathing space" for households in his first days in Downing Street.
Gilt investors are on alert, with borrowing costs having ticked higher as markets weigh the fiscal implications of a leader said to be considering up to £24 billion of extra spending.
Sentiment was steadied late on Monday by the appointment of John Healey as Chancellor, a move seen as a sign Burnham will respect the bond markets.
The pound has climbed to around $1.35, its strongest since the start of the year.
On the economic front, fresh figures showed the UK unemployment rate rising to 4.9%, adding to signs of a softening labour market.
Corporate news was heavy, with Compass Group reiterating its profit guidance after a strong quarter and the London Stock Exchange unveiling a new overnight trading venue.
Dealmaking also featured, as facilities group Mitie agreed a £3.1 billion cash takeover by rival OCS. Prologis ramped up pressure on SEGRO following a rebuffed third bid for the warehouse giant, a deal worth £13.5bn.
Geopolitics remained a drag, with Brent crude holding near $90 a barrel amid continued US strikes on Iran and tensions around the Strait of Hormuz.
7.55am: Early pressure on Burnham
Less than 24 hours in the hot seat and the economic portents aren't particularly good for new PM Andy Burnham as fresh signs of strain in the UK jobs market landed this morning. They made for uncomfortable reading.
Unemployment nudged up to 4.9% in the three months to May, its highest in a while, as the number of payrolled employees shrank by 85,000 over the year.
Vacancies are sliding too, down another 7,000 to 712,000, with smaller firms increasingly reluctant to take on staff as wage and running costs bite.
There was a crumb of comfort for workers: regular pay growth held at 3.4% and is still comfortably ahead of inflation.
But private-sector pay growth has dipped below 3% for the first time since 2020, a reminder that the once red-hot labour market is cooling fast.
Blue-chips headed for the red
The FTSE 100 is set to open around 64 points lower on Tuesday, despite an overnight recovery on Wall Street and across Asian markets.
Asian stocks mostly rebounded after days of losses, led by technology shares, helping Japan's Nikkei rise 1.75% and Seoul's Kospi 3.6%.
The bounce followed gains in US technology stocks on Monday, easing recent fears that the artificial intelligence sector may be overbought.
One analyst cautioned that the rebound did not reflect "a decisive improvement in the AI fundamentals".
He said big tech earnings now needed to prove that AI revenues, margins and cash flow could justify the scale of infrastructure spending.
Tesla and Alphabet report this week, followed by Microsoft, Meta, Apple and Amazon.
Oil prices eased slightly after Iran's Revolutionary Guards said they had struck US military targets in Bahrain and Kuwait.
Brent North Sea crude fell 0.63% to $88.59 a barrel, while West Texas Intermediate slipped 0.3% to $82.98.
The pound eased to $1.3430, while gilt yields rose after remarks on public finances by new Prime Minister Andy Burnham.
