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- FTSE 100 up 128 points at 8,023
- Grocers, housebuilders among risers
- Ocado pressured to ditch London
4.45pm: FTSE 100 closes at record high
FTSE 100 closes at a record high of 8,023.87, beating last year’s peak of 8,014 and marking a 1.62% jump on Monday.
3.58pm: FTSE 100 nears record close
London’s blue-chip index approached late trading in view of a record closing value.
At 8,033, the index was up 137 points for the day and on track to beat its record closing high of 8,014, recorded in February last year.
The index was also not far off its record intraday high of 8,047, with seemingly scaled-back tensions between Israel and Iran buoying gains.
“Overnight, risk sentiment is better on a relief rally that no adverse geopolitical headlines were reported on the weekend,” Jeffries economist Mohit Kumar said.
Grocers continued to hold gains into late trading, with Marks and Spencer Group PLC, J Sainsbury PLC and Tesco PLC up 4.5%, 3.6% and 3.2% respectively.
Each had enjoyed positive commentary from Shore Capital following Asda’s results, which the bank noted showed rivals were in stronger positions to take market share.
Vodafone Group PLC and International Consolidated Airlines Group SA sat among the FTSE 100’s big risers too, with gains of 3.9% and 3.8%.
The latter, which owns British Airways, has benefitted in recent weeks from positive commentary around future transatlantic travel demand, with RBC echoing similar views on Monday.
Miners Fresnillo PLC and Anglo American PLC remained among the FTSE 100’s biggest daily losers in the meantime, having fallen 2.7% and 2.2% respectively.
Precious metal-focussed Fresnillo had faced a blow as gold prices receded from gains seen last week on the back of Israel’s strike against Iran.
Anglo American’s blow came after a South African high court ruling allowing a class action lawsuit against the miner, relating to lead poisoning, to go ahead.
15.38pm: Jefferies sees 67% upside in National Express owner
Jefferies analysts have said National Express owner Mobico Group shares are looking at a 67% upside, despite news of the company’s chief financial officer resigning on Monday.
Though Mobico was sent 9% lower following a delayed trading update and details of James Stamp’s departure, Jefferies batted off concerns in a note.
“An interim chief financial officer with turnaround experience [is] joining in mid-June,” analysts highlighted.
Attention will likely also turn to Mobico’s disposal of its North American school bus business in the meantime, analysts continued.
“Encouraging” first quarter trading should to aid its valuation, Jefferies said, with route recovery from new contracts slightly ahead of expectations, according to Mobico
“We continue to expect the disposal to prove a material positive catalyst, kick-starting a debt-to-equity value transfer, followed by a deleverage-driven re-rating journey,” analysts added.
A 100p share price target was laid out as a result, marking a 67% upside on Friday’s close.
3.05pm: Wall Street enjoys positive start
A positive start on Wall Street saw the Nasdaq add 105 points to reach 15,387, as the Dow Jones and S&P 500 climbed 25 and 18 points respectively.
Seemingly easing tensions in the Middle East aided gains early on as attention turned to a host of big names set to report this week, including big tech firms and oil majors.
Buoying index on Monday though was NVIDIA Corp, with gains of 4.3% coming after analysts reiterated backing for the chip firm following falls last week.
Salesforce Inc gained 2% early on following reports the company had stepped back from talks to take over data-management software firm Informatica.
Amazon.com Inc also supplied upward pressure, leading a rally by big tech rivals Alphabet Inc, Apple Inc and Microsoft Corp as traders geared up for earnings later this week.
“With updates from the likes of Microsoft, Meta, Alphabet, and Tesla […] the so-called Magnificent seven remain in the limelight after a particularly torrid time for Nvidia and Tesla shareholders,” Scope Markets analyst Joshua Mahony commented.
“However, there is a fear that the AI premium paid for those big tech names could start to reverse unless we start to see those investments drive a meaningful improvement to the bottom-line.”
2.38pm: easyJet gains altitude as targets hiked by RBC
easyJet PLC ascended 2.8% on Monday after RBC analysts hiked the airline’s profit forecasts and share price target.
Following slimmer-than-expected first-half losses, the bank lifted profit before tax forecasts by around 10% to £653 million for 2024, stretching to £714 million next year.
Lower fuel prices should help too, analysts from the bank added in a note, hiking easyJet’s share price target from 540p to 580p – 8% higher than Friday’s close.
“We see an encouraging outlook for UK travel demand,” RBC said.
“Whilst UK travel demand climbed a wall of worry amidst cost of living pressures in 2022 and 2023, some UK macro indicators have firmed at the start of 2024.”
This includes disposable incomes, which the bank noted were up 7% year on year in January and February.
Rebounding travel demand following the pandemic has boosted airlines over the last year, with short-haul recovering quicker than long-haul, but transatlantic carriers noting improving trends in recent weeks… Read more
easyJet climbed 2.7% to 549.55p on the news.
Ryanair Holdings PLC (LSE:RYA) gained 0.9% in the meantime, while British Airways owner International Consolidated Airlines Group SA (LSE:IAG) jumped 3.6%.
2.15pm: FTSE 100 nears high
The FTSE 100 rallied 144 points to 8,040 on Monday, taking the blue-chip index not far off its all-time intraday high of 8,047 and past its record closing value of 8,014.
Retailers largely buoyed the index, led by Ocado Group PLC, which was up 4.8% after weekend reports that a top shareholder had pressured the grocer to relist in New York.
Marks and Spencer Group PLC, J Sainsbury PLC, and Tesco PLC climbed 3.9%, 3.9% and 3.6% respectively after a delayed trading update from Asda saw each granted positive commentary from analysts.
Among others, Vodafone Group PLC, Pershing Square Holdings Ltd, WPP PLC and BT Group PLC enjoyed gains, with the latter reportedly having added a new interim strategy chief to its board.
Persimmon PLC led housebuilders higher in the meantime after news house prices had jumped this month, aided by a rebound in sales activity.
Leading fallers was Fresnillo PLC, after gold prices retreated from gains seen late last week as tensions between Israel and Iran appeared to simmer down.
1.59pm: FTSE 250-listed Tyman agrees to US takeover
Tyman (LSE:TYMN) PLC has become the latest company to deal a blow to London after accepting a takeover offer by US rival Quanex.
Under the £790 million deal, door and window handle part maker Tyman (LSE:TYMN) will be taken private, seeing its shares leave the London Stock Exchange.
“In the context of a rapidly evolving North American marketplace, our board ultimately determined that this transaction is the best path to maximising value for Tyman (LSE:TYMN) Shareholders,” non-executive chair Nicky Hartery commented.
If approved, Tyman (LSE:TYMN) would join a growing wave of UK companies leaving London due to takeovers, including Spirent Communications (LSE:SPT), Wincanton, Accrol Group, Mattioli Woods and SmartSpace Software recently.
Shares climbed 31% to 388p on the news.
1.15pm: Thames Water shareholders should be the ones to ‘fork out’ – union
More on Thames Water’s plans to hike consumer bill by as much as 45% over the five years to 2030 and GMB union has joined calls against the proposal.
“It’s not for hard-up bill payers to dig Thames out of the financial mess they’ve created,” GMB Union national officer Gary Carter commented in a statement.
“The shareholders who trouser millions since privatisation must fork out to give the company a chance to turn things round.”
Thames laid out the plans to Ofwat on Monday, in a bid to set a course for survival and away from potential nationalisation as issues grow over its mounting £18 billion debt pile… Read more
The plan, which was updated from a submission in October, would see more than originally proposed spent on infrastructure at the expense of billpayers.
“You can’t expect customers to pay £627 a year to pay for the past failures of Thames Water,” Carter added.
“Previous owners have taken the profits in huge dividends rather than putting in the investment needed.”
12.59pm: Buy-to-let product availability improves
Signs of stability have crept back into the buy-to-let property market through an increase in the number of products on offer, Moneyfacts analysts have noted.
Overall, the number of fixed-rate buy-to-let products edged up from 2,844 in March to 2,883 in April, the comparison site said on Monday.
This was up on the 2,628 available in April last year, with Moneyfacts noting the availability of higher loan-to-value deals had improved in recent months.
“The stabilisation of buy-to-let product availability is a positive turn of events for landlords after recent months of contracting choice,” Moneyfacts finance expert Rachel Springall commented.
“Lenders will no doubt need to remain fluid with their product ranges and ensure they can react quickly to market uncertainty.”
According to the group, average rates on all fixed buy-to-let deals notched up 0.01% between March and April to 5.52%, against 5.64% a year ago.
“This improvement in choice should be welcomed, but the real challenge surrounds affordability,” Springall added.
Data from Rightmove showed property prices had climbed by 1.7% against a year ago, and by 1.1% on last month, to an average of £372,324, aided by a 13% jump in agreed sales to bring the figure in line with 2019 levels.
12.29pm: Royal Mail owner urges regulatory changes
Royal Mail owner International Distributions Services (IDS) has doubled down on calls for regulators to tweak requirements for it to offer letter deliveries six days a week.
Third-largest investor Redwheel had called for such changes over the weekend, following an “opportunistic” takeover attempt by West Ham co-owner Daniel Křetínský.
Royal Mail’s universal service obligation, legally requiring the letter service, had left the company undervalued and “vulnerable to corporate predators,” Redwheel said.
“The lack of universal service reform by government and Ofcom over the past four years has held back Royal Mail’s transformation,” IDS chair Keith Williams said on Monday.
“Urgent action is needed. Reform is in the regulator’s hands and we urge Ofcom to accelerate their review.”
This came as IDS submitted proposals to Ofcom which it said could save as much as £300 million a year.
These would include second-class and standard business letter deliveries, such as bills, being cut to every other weekday.
Though Křetínský’s £3.1 billion bid had been rejected, his firm EP Group signalled further offers would be made, with a deadline of May 15 being set under UK takeover rules.
12.11pm: Wall Street on for strong start
The Nasdaq was expected to add 106 points as the trading week got underway on Monday, climbing to 17,287.
Futures had the Dow Jones and S&P 500 adding 188 and 27 points respectively in the meantime, as Wall Street’s attention turned from seemingly scaled-back Middle Eastern tensions to a busy week of earnings.
Verizon Communications Inc (NYSE:VZ, ETR:BAC) was set to kick off the week with earnings on Monday, followed by Tesla Inc (NASDAQ:TSLA), big tech and oil majors later on.
“There is a hope that this week’s big tech earnings could help alleviate some […] selling pressure,” Scope Markets analyst Joshua Mahony commented.
Tesla emerged as one of Monday’s big-name losers in pre-market trading ahead of the results though.
This was as news of further price cuts across the likes of the US, China and Germany sent shares down 3%.
NVIDIA Corp (NASDAQ:NVDA, ETR:NVD) looked set for a brighter start after falling last week, with shares up 1.6% in pre-market trading on positive comments from analysts over the weekend signalling ongoing strong demand.
11.40am: Thames Water’s failures can’t be placed on bill payers – Defra
The UK’s Department for Environment, Food & Rural Affairs (Defra) has warned Thames Water cannot expect customers to foot the bill for its “poor performance”.
This comes after Thames detailed plans to increase consumer bills by as much as 45% by 2030 to an average of £627 annually.
“Customers cannot be expected to pay the price for Thames Water’s poor performance,” a Defra spokesperson said.
“[This] is why Ofwat should use their full powers to protect customers and ensure value for money in their bills.”
Liberal Democrat MPs also slated the move, which comes as Thames fights to stave off collapse, and potentially even nationalisation, due to its mounting £18 billion debt pile.
“It would be an absolute disgrace if customers are forced to foot the bill for Thames Water’s shambolic failings,” a party spokesperson commented.
“Ofwat cannot allow these bill hikes to go ahead.”
Defra acknowledged the plan was “not yet final”, with regulator Ofwat confirming on Monday that draft determinations for the next regulatory period would be published in June.
Thames said earlier in the day that its plan would involve £19.8 billion of infrastructure investment between 2025 and 2030, against £18.7 billion previously proposed.
A further £1.9 billion could then be spent on top of this, Thames added, funded by bill increases.
11.22am: Fresnillo falls as gold prices step back
Fresnillo PLC (LSE:FRES) emerged as the day’s biggest loser on the FTSE 100, as a fall in gold prices hit the Mexican precious metals miner.
Shares in the company were down 3.2% as of late morning, with gold having slipped 1.1% from Friday to US$2,361 per ounce as tensions appeared to ease in the Middle East.
Also falling was Anglo American PLC (LSE:AAL), after saying it would appeal a South African high court ruling allowing a class action lawsuit over lead poisoning against the miner.
Grocery retailers led gainers in the meantime, with J Sainsbury PLC (LSE:SBRY) and Marks and Spencer Group PLC (LSE:MKS) up 3.6% and 3.4% respectively on the back of delayed results from Asda, which prompted analysts to highlight their strength.
Ocado Group PLC (LSE:OCDO)’s 3% gains followed comments over the weekend from a major shareholder that the firm should be exploring switching its listing to New York.
Overall, the FTSE 100 surged above the 8,000 mark, climbing 114 points to reach 8,010.
11.07am: Gold and oil prices retreat
Gold and oil prices fell back on Monday after tensions between Israel and Iran seemed to simmer down over the weekend following the former’s strike on Friday morning.
Gold was down 1.1% compared to Friday at US$2,361 per ounce, having soared as high as US$2,415 in the aftermath of Israel’s strike, which came following an Iranian attack a week earlier.
Benchmark Brent crude oil fell 0.6% to US$86.66 a barrel over the same period from Friday evening. It had climbed as high as US$90.69 during the early hours of the day.
Iran had reassured on Friday that an immediate retaliatory strike was not planned on the back of Israel’s attack.
Analysts noted that blows between the two had thus far been shows of force rather than acts looking to incite all-out war as a result.
That said, “the general fragility of tensions in the region remains close to the surface and is clearly playing on investors’ minds,” interactive investor’s Richard Hunter point out on Monday.
Elsewhere, the pound slipped to a five month low against the dollar of US$1.23 on speculation the Federal Reserve will keep rates higher for longer across the Atlantic.
Gas slipped 1% to 76.35p per British thermal unit in the meantime as supplies across Europe remained abundant despite a cold snap on the continent.
10.38am: Market prices in August rate cut
Traders have repriced in a first cut to base interest in August by the Bank of England.
Having scaled back expectations last week, rate futures on Monday morning showed a 25 basis point cut in August, stretching to 54 basis points by December.
A higher-than-expected inflation reading for March had left traders pricing in just one full cut for the year.
Comments from Bank of England deputy governor Dave Ramsden that UK inflation fundamentals seemed to be improving appeared to reinvigorate optimism though.
“Over the last few months I have become more confident in the evidence that risks to persistence in domestic inflation pressures are receding,” he said in a speech in Washington on Friday.
“The balance of domestic risks to the outlook for UK inflation, relative to the February Monetary Policy Report forecasts, is now tilted to the downside.”
10.06am: Asda updated somewhat misleading – analyst
Asda’s delayed trading update was “sketchy”, with a focus on adjusted earnings somewhat misleading, according to Shore Capital analyst Clive Black.
“At a headline level [the results] show progress, especially in debt reduction,” Black noted following the results, which showed earnings up 24% at just over £1 billion and debt of £3.8 billion.
However, depreciation and finance costs matter, he added, with sources suggesting £441 million was spent on the latter over the year.
Asda had claimed it was the UK’s second-largest supermarket, which Black argued “share somewhat misses the point” given volume loss and market share erosion.
“Capital expenditure appears very light at the present, which raises questions about the level of investment in maintaining its core supermarket estate.
“How Asda’s trading strategy evolves will be of sector interest,” Black continued, “we expect ongoing rationality”.
He added Lidl, M&S, Sainsbury and Tesco had “seemingly better assortments, dynamics, store standards, momentum and balance sheets […] to defend their market positions”.
J Sainsbury PLC (LSE:SBRY) climbed 3.6% on the news, with Marks and Spencer Group PLC (LSE:MKS) gaining 3.1% and Tesco PLC (LSE:TSCO) 2.4%… Read more
9.19am: House prices increase as sales rebound
House prices have increased at their fastest annual pace in a year, property firm Rightmove announced on Monday.
At £372,324, average prices have climbed by 1.7% on a year ago, and by 1.1% on last month, Rightmove said in a report.
This comes as the number of sales agreed jumped by 13% compared to April last year, bringing the figure in line with 2019 levels.
“It has been a positive start to the year in comparison to the more muted start to 2023,” Rightmove director Tim Bannister commented.
“However, agents report that the market remains very price-sensitive, and despite the current optimism, these are not the conditions to support substantial price growth.”
Rightmove added average prices were nearing a record high, recorded in May last year, with top-of-the-ladder homes buoying values after enjoying the strongest start to the year since 2014.
Persimmon PLC (LSE:PSN) was among housebuilders rising on the news, up 2.6%, with Bellway PLC (LSE:BWY) and Taylor Wimpey PLC (LSE:TW.) also climbing 1.5% and 1% respectively.
9.04am: Thames Water firms up 45% bill increase plan
Thames Water plans to increase consumer bills by almost 45% in its fight for survival.
Average bills would jump from £433 this year to as much as £627 by 2030 under an updated plan, unveiled by the water firm on Monday.
This would see £19.8 billion invested in infrastructure between 2025 and 2030, an increase from £18.7 billion previously proposed.
A further £1.9 billion could be spent on top of this under the proposal, Thames said, which would see customer bills increase by the full 44.8%… Read more
8.56am: The morning so far
Blue-chip stocks had a stellar start to the week, with the FTSE 100 index soaring over 90 points to 7.989 in the 45 minutes, effectively wiping out last week’s losses.
It comes as tensions between Israel and Iran appear to have momentarily cooled down. A solid showing from retail stocks also fed into the morning gains.
Ocado Group PLC (LSE:OCDO) led the pack by shooting up 5.7% on reports that a major shareholder is pressuring the grocery technology large cap to explore a US listing.
Tesco, B&M, Marks & Spencer and J Sainsbury were also among the top morning risers, potentially bolstered by private equity-owned Asda finally publishing its delayed results.
Asda’s total sales excluding fuel rose by 7.1% year to year to £21.9 billion in 2023. Adjusted earnings increased 24% to slightly over £1 billion, while underlying free cash flow was up 31% to £776 million.
Elsewhere in company news, yet another chapter in the Hipgnosis saga was penned when private equity firm Blackstone emerged with a rival takeover proposal for the distressed song rights manager.
Blackstone’s proposal improves on rival bidder Concord’s offer by six cents per share, implying an approximate valuation of US$1.5 billion. Shares shot up 10% accordingly.
Royal Mail owner International Distributions Services has been dubbed “vulnerable to corporate predators” due to obligations requiring letters be delivered six days a week.
That didn’t stop IDS stock from rising 3.5%.
Other top morning risers included DS Smith, Persimmon and AstraZeneca.
Since 8.45am, footsie has scaled back to 7,973, which still represents 78 points of gains.
8.42am: Another mid-cap takeover
Construction components maker Tyman (LSE:TYMN) joins the growing list of UK mid caps to leave the London Stock Exchange after agreeing to a £788 million bid from US peer Quanex Building Products Corp
Under the agreed offer, shareholders in the FTSE 250-listed company will receive 400p in cash and shares, or can choose an all-share offer.
Tyman (LSE:TYMN)’s directors have unanimously recommended the offer and Quanex has received an irrevocable undertaking from 16.4% shareholder Teleios Capital Partners.
Tyman (LSE:TYMN)’s shares flew 29% higher on the news.
8.27am: FTSE 100 shoots higher
The FTSE 100 shot up 94 points in opening exchanges amid a blue-chip recovery on a momentary respite in tensions between Iran and Israel.
The index was swapping for 7,990 after the first 30 minutes of trading, with Ocado leading the charge after reports that a major shareholder is gunning for a US listing.
Other major retailers including Marks & Spencer, J Sainsbury and B&M were also up, as were BT Group, Diageo, persimmon and AstraZeneca.
8.13am: Debt-laden Asda publishes delayed financials
Asda’s total sales excluding fuel rose by 7.1% year to year to £21.9 billion in 2023.
Adjusted earnings increased 24% to slightly over £1 billion, while underlying free cash flow was up 31% to £776 million.
Michael Gleeson, Asda’s chief financial officer, attributed the solid results to the success of Asda’s rewards programme.
He said: “Around half of all sales are now linked to Asda Rewards and around six million customers use the app – making it a vital tool for them to manage their household budgets as well as being a key revenue driver for the business.
“The shareholders have also invested to fill the previous strategic gaps in the business, including acquiring the Co-op and EG UK convenience stores – which have already boosted annual earnings and helped grow Asda to more than 1,000 sites for the first time.
Asda, which is co-owned by the Issa brothers and private equity firm TDR Capital, had already disclosed its unaudited financial results to lenders behind closed doors in March after delays due to the group switching auditors.
According to sources, the group’s earnings were impacted by £441 million of finance costs on its £4.2 billion debt pile.
Today’s trading update showed a net debt position of £3.8 billion.
7.52am: Ocado pressured to list in New York
Ocado is the latest British company to come under pressure to move its share listing from London to New York.
According to weekend reports in the Sunday Telegraph, one of Ocado’s top shareholders, an undisclosed “leading fund manager”, asked Ocado’s board to properly explore the idea.
Ocado’s share price has collapsed nearly 90% since early 2021, when the grocery delivery and grocery technology licensor became a darling of the Covid era.
Ocado has yet to make a comment on the reports.
Ocado, which currently has six fulfilment centres in the US, could fetch a premium through a New York listing compared to London given its technology focus.
Another British technology company, the microchip designer Arm, snubbed London in favour of a US listing in 2023, while many smaller cap companies have also been lured by superior valuations across the Atlantic.
7.30am: Blackstone swoops for Hipgnosis
Distressed music royalties fund Hipgnosis, which owns the rights to back catalogs ranging from Beyonce to Neil Young, has received a rival takeover proposal from private equity firm Blackstone.
Hipgnosis, which just on Friday agreed to a US$1.4 billion/US$1.16 per share bid from Nashville-based music rights owner Concord, said it “would be minded to recommend to its shareholders should Blackstone announce a firm intention to make an offer”.
Blackstone’s proposal improves on Concord’s bid by 6 cents per share, implying an approximate valuation of US$1.5 billion.
Blackstone is already the majority owner of Hipgnosis’ investment advisor, Hipgnosis Song Management.
Until Blackstone puts a formal offer in writing, Hipgnosis’ directors recommend that shareholders continue to support Concord’s offer.
7.11am: Stocks to recover
Stocks are expected to partially recover when markets open this morning as tensions between Iran and Israel appear to have momentarily simmered down.
Though the FTSE 100 staged a late-day recovery on Friday, the blue-chip index still closed the week 10 points in the red as traders became nervous about escalating Middle East tensions.
On today’s macroeconomic calendar, the CBI Business Optimism Index should give a gauge of the state of manufacturing optimism in the UK; it is expected to lightly recover after deteriorating to the lowest point in a year in the fourth quarter of 2023.
A smattering of small-cap trading updates from the likes of Brave Bison (AIM:BBSN) Group, Elixirr International and Frenkel Topping Group (AIM:FEN) is due, while Verizon is reporting out of the US later in the day.
Futures contracts have the FTSE 100 index opening 76 points higher at 7,975.
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