FTSE 100 Live: ‘Expect inflation to fall sharply’; shares drop late in day again as FTSE closes at 7723

 (Evening Standard)
(Evening Standard)

The lacklustre run for the FTSE 100 index is continuing amid uncertainty over whether the United States will avoid a debt default.

Companies reporting results today have included JD Sports Fashion, British Land and the Tesla backer Scottish Mortgage Investment Trust.

There’s also a rare stock market debut after Admiral Acquisition Group raised $550 million through a London listing.

FTSE 100 Live Wednesday

  • JD Sports revenues hit £10bn after US success

  • Online estate agent PurpleBricks sold for £1

  • British Land in the red as portfolio value tumbles

Key market data as trading session comes to close

16:27 , Simon Hunt

As today’s trading session draws to a close, here’s a look at today’s key market data.

Click through the buttons below to view the data.

Another afternoon fall for FTSE

15:54 , Daniel O'Boyle

The FTSE 100 has again lost steam late in the day, and is currently down 0.4% after having been flat an hour and a half ago.

The index also fell off late in the day yesterday. JD Sports and British Land, which both published results today, are among the biggest fallers.

US shares rise as investors hope for debt ceiling progress

15:51 , Daniel O'Boyle

US shares are off to a strong start today, as investors hope for progress in debt ceiling talks.

The Dow Jones is up 0.3% to 33123, while the S&P 500 is also up 0.3%, to 4123. The Nasdaq is up 0.4% to 12,387. The biggest risers of the day include airlines United and Delta on strong Chinese travel statistics, as well as reigonal lenders Comerica and Fifth Third.

Fallers included pharmaceuticals businesses Moderna and Abbvie.

How high street brands are using in-store experiences to keep shops busy

15:46 , Daniel O'Boyle

As online shopping continues to grow, brands are learning to be more creative with their bricks and mortar spaces.

With the focus firmly on digital platforms and delivery during the height of the pandemic, the ease and convenience of e-commerce has continued to prove a big hit with consumers.

Now, with declining footfall in-store, retailers have turned their attention inside.

Read more here

900,000 households received £301 cost-of-living payment in early May

14:51 , Daniel O'Boyle

Around 900,000 households claiming tax credits received cost-of-living payments worth about £300 million in total in early May, according to HM Revenue and Customs (HMRC).

The payments of £301 were made by HMRC between May 2 and 9, in its first round of cost-of-living payments for 2023/24.

Read more here

Mixed start expected on Wall Street

14:16 , Daniel O'Boyle

US shares are set for a mixed start, as mega-cap firms struggle but the remainder of US companies fare better.

Dow Jones futures are down 0.8% to 33146. Yet S&P 500 futures are up 0.4% to 4140 and Nasdaq futures up 0.2% to 13514.

Big risers include regional banks Western Alliance and PacWest, which have been extremely volatile in recent weeks amid feels aboout the country’s mid-sized lenders. Media behemoth News Corp is among the biggest premarket fallers.

ASOS shares jump as Ashley ups stake

13:44 , Daniel O'Boyle

Shares in ASOS have rebounded today, rising by 7.6% after it was revealed that Mike Ashley’s Frasers Group had increased its stake in the business to 7.4%.

The Frasers Group previously held a 5.1% stake.

ASOS’ share price had plummted over the past month, with the sharpest fall as it announced a £290.9 million loss last week. Since then, a number of funds have taken short positions against the fast fashion retailer, betting it will keep falling.

Sage boss says London listing ‘is not holding us back’

13:37 , Daniel O'Boyle

The boss of accounting software firm Sage said he is “very proud” to be listed in London, even as its North American arm grows to bring in almost half of the company’s revenue.

The comments came as Sage’s shares rose today after it revealed its revenue for the year is set to be higher than it had previously expected.

Read more here

The Standard View: The Government must axe the tourist tax harming London

13:06 , Daniel O'Boyle

Ministers often stress that they are here to listen to business. A good place to start would be to axe the tourist tax on foreign shoppers before yet further damage is done to the capital’s global reputation — and economy.

The Evening Standard has long led the campaign against scrapping VAT-free shopping by the then chancellor, now Prime Minister, in January 2021.

This decision instantly made it 20 per cent more expensive for foreign visitors to shop in London.

And it represents a classic false economy — it made the capital more expensive and diverted high-spending tourists to other European cities.

Read more here

‘Scrap the tourist tax that’s harming London’, say business leaders

12:40 , Daniel O'Boyle

Rishi Sunak has been urged by business leaders to take the “no-brainer” decision to scrap his tourist tax on foreign shoppers before irreparable damage is done to London’s global reputation.

There is growing alarm that over the first summer peak holiday season without any Covid restrictions millions of visitors will return to their home countries with the message that the capital is too expensive compared with rival destinations such as Paris, Milan or Madrid.

On Wednsday, the boss of luxury retailer Watches of Switzerland added his voice to the chorus of pleas calling for a change of heart from the Government “the sooner the better”.

Read more here

Bank governor signals further rate hikes if inflation ‘persistent’

12:28

The governor of the Bank of England has warned the central bank will continue to increase interest rates if there are signs that inflation is remaining persistent.

However, Andrew Bailey also revealed that pressure from Britain’s tight labour market has loosened.

Read more here

Bailey: Bank could not have pre-empted inflation without double-digit interest rates

12:14 , Daniel O'Boyle

Bank of England governor Andrew Bailey hit back at critics today, arguing that the Bank could not have pre-empted the current wave of punishing inflation without hiking interest rates “well into double-digits” in the middle of the Covid-19 pandemic

The Bank has faced criticism from those who argue its looser monetary policy during the pandemic has caused the cost-of-living crisis.

However, Bailey said that these critics ignored the fact that Russia’s invasion of Ukraine played an especially large role in price rises, and without it, the Bank may have drastically undershot on inflation. This echoed similar comments from deputy governor for monetary policy Ben Broadbent.

He went on to say that even if the Bank could have predicted the war, the actions the Bank would have to have taken to prevent the current inflation crisis would have involved interest rates well above 10%, likely creating its own crisis.

Read more here

Hunt suggests businesses abandoning work-from-home as it stifles creativity

11:38 , Daniel O'Boyle

The “default” location for workers should be in the office, Jeremy Hunt suggested as he warned that logging on from home could stifle creativity.

The Chancellor said he believed that the shift to home working during the coronavirus pandemic was being reversed by firms.

Speaking at the British Chambers of Commerce conference in London he suggested workers would return to offices unless they had a “good reason not to”.

Read more here

Watches of Switzerland to open Tudor flagship on Bond Street

11:22 , Daniel O'Boyle

Luxury retailer Watches of Switzerland Group has cheered a sales surge, alongside revealing plans to open a new Tudor flagship store on Old Bond Street.

The company will convert its Mappin & Webb Bond Street branch into a standalone Tudor shop.

Watches of Switzerland’s boss Brian Duffy said the brand, which counts David Beckham as an ambassador, has “great momentum and following”.

Read more here

City Voices: Scrapping tourism tax breaks a spectacular own goal

11:16 , Daniel O'Boyle

One of Rishi Sunak’s pet phrases is that he is“listening”.

He said it repeatedly at his Business Connect event last month, billed as the Tories’ re-engagement with business leaders after the dismal Boris Johnson era.

The suits, though, are getting rather tired of Sunak’s smile and earnest nodding and assurances. What is the point of saying you’re listening, then doing nothing?

Read more here

Bailey: ‘Good reasons to expect inflation to fall sharply’

11:08 , Daniel O'Boyle

Bank of England Governor Andrew Bailey says that there are “good reasons” to think that inflation will fall sharply over the next few months.

Bailey was speaking at the British Chamber of Commerce’s conference, where Jeremy Hunt also spoke earlier today.

“We do have good reasons to expect inflation to fall sharply over the coming months, beginning with the April number to be released on 24 May,” he said.”

“Energy prices have fallen from their peaks, and that will now start to come through as lower inflation.”

He said that energy will go from contributing three percentage points to headline inflation to contributing just one percentage point.

Hunt: ‘Inflation has to be overwhelming priority’

10:54 , Daniel O'Boyle

Chancellor Jeremy Hunt said that bringing down inflation has to be the Government’s top target before it can bring down taxes.

Speaking at the British Chamber of Commerce, Hunt said he understood that many were worried about their tax burden, but that inflation was effectively a tax as well.

“We have to get our taxes down, particularly our busness taxes,” he said. “But the worst tax of all is inflation. Inflation is a tax that you get nothing back from.

“That has to be the overwhelming priority for us.”

Sage leads FTSE 100 index, LSE shares lower after placing

10:21 , Graeme Evans

Tesla-to-Amazon backer Scottish Mortgage today insisted that short-term headwinds won’t shift its approach.

Annual results from the FTSE 100-listed investment trust revealed a 17.8% decline in net asset value (NAV) alongside a share price fall of 33%, reflecting economic headwinds and pressure on high growth companies from rising interest rates.

Despite the below-par performance, the 114-year-old Baillie Gifford trust highlighted a 10-year NAV growth record of 432% following its success as an early investor in the likes of biotech Moderna and Chinese e-commerce firm Tencent.

Manager Tom Slater urged patience today: “We know this has been painful for shareholders, but history shows that periods of poor performance are inevitable.

“Our approach will never be consistently in favour, and we should not deviate from it to avoid short-term headwinds. If patient ownership of growth companies was easy, there would be far more competition.”

Scottish Mortgage shares drifted 1.6p to 619.4p in a session when two other tech-focused stocks enjoyed success.

Accounting software group Sage led the FTSE 100 index after it upgraded guidance on full-year recurring revenues growth to 11%. Shares jumped 4% or 32.2p, their highest level since early 2022 at 853.2p.

There was also a bounce for Auction Technology Group following a 7% rise in annual operating profits to £9.8 million. Notable lots in the year included a metal endoskeleton arm from the movie Terminator 2: Judgment Day, which sold for £55,000.

Auction’s shares jumped 8% or 53p to 723p but its performance failed to lift the FTSE 250 index as the benchmark weakened 0.5% or 97.43 points to 19,175.29.

The lacklustre run for the FTSE 100 index also continued, up 3.28 points to 7,754.36. Fallers included London Stock Exchange, which retreated 328p to 8144p after Thomson Reuters and other investors raised £2.7 billion through a placing of shares at 8050p.

Auction Technology Group shares find buyers as profit rises

10:17 , Michael Hunter

An arm from the killer robot that starred in Terminator 2 and a shirt worn by Manchester United legend Bobby Charlton helped Auction Technology Group report a rise in profit of almost a fifth today.

The unique items were sold using the London-listed firm’s online marketplaces for curated auctions, which typically bring a virtual hammer down on around 20 million items a year. As well as antiques and cultural curios, it also sells industrial equipment and farm machinery.

ATG, which runs around 74,000 auctions a year, reported adjusted earnings of £31.5 million, up 18% from revenue of £67.3 million, up 17%.

The Southwark-based company operates a range of websites, including thesaleroom.com and bidspotter.com, and deals with 3,800 auction houses globally. It publishes the Antiques Trade Gazette.

ATG’s shares were also finding buyers, rising 38p to 708p, a gain of almost 6%.

Lioness Leah Williamson invests in Toca to inspire women’s football

10:13 , Daniel O'Boyle

Football entertainment group Toca Football has won investment from England women’s football captain Leah Williamson, following in the footsteps of men’s team captain Harry Kane.

Williamson said she has become a stakeholder in Toca to help drive female participation in the sport, in her first foray into the business world.

Read more here

Strike buys PurpleBricks for £1

09:38 , Daniel O'Boyle

Troubled online estate agent PurpleBricks, once worth £1.4 billion, has been sold to rival Strike for £1.

PurpleBricks put itself up for sale in February, with CEO Helen Martson saying that the estate agent’s upside potential was “not reflected in our market valuation”. At the time, its market cap was £30 million.

It sped up the sale process last week despite a lack of interest at the board’s intended price, after warning it could run out of cash if it wasn’t sold soon.

Now, the estate agent has been sold to Charles Dunstone’s Strike, which will assume “substantially all” of PurpleBricks’ liabilities.

PurleBricks expects to be left with £2 million after the sale, to be given back to its shareholders.

Chairman Paul Pindar said: “I am disappointed with the financial value outcome… however, there was no other proposal or offer which provided a better return.”

Shares are down 41.6% to 0.77p.

City Comment

09:24 , Simon English

Just one year ago – April 4 2022 to be exact – the government unveiled plans to make the UK a “global cryptoasset technology hub”.

We would be at “the cutting edge” of this new tech and encourage “further development of the…market”.

This sounded like a sop to fashion then and looks plain daft now.

Sure enough, the Treasury select committee now says we should ditch plans to regulate crypto as if it were a legitimate part of the financial services industry and treat it as if it were just another form of gambling. Which it is.

There were whines today from predictable quarters, folk with job titles like “Crypto & Digital Assets Technical Director”, that the MPs just don’t get bitcoin.

Maybe they get it well enough.

The way to think about bitcoin and the rest is as an equity. If you buy some – I own about £500 worth, at least it used to be £500 – what you are paying for is a share in a company that has no real revenues.

It is a speculative dotcom stock, like many of those that failed in the original internet boom and bust back in the early 2000s.

Fans baulk at this description, but they are blinded by belief. They think bitcoin is going to save the world, or at least rescue it from the clutches of the evil central bankers.

Committee chair Harriet Baldwin has it right. Crypto has “no intrinsic value, huge price volatility and no discernible social good”.

In other words, it’s like a William Hill shop and should be treated as such.

We can leave the global crypto tech hub to somewhere else

All Bar One owner warns Square Mile pubs may not recover to pre-Covid levels any time soon

09:19 , Simon Hunt

The boss of one of Britain’s biggest pub groups has said trading in the Square Mile remains down on pre-pandemic levels and would not make a full recovery for the foreseeable future.

CEO of Mitchells and Butlers, Phil Urban, told the Standard: “There are more people working at home than there used to be so if you own a pub in the Square Mile or Canary Wharf, you’re not going to be as busy as you were three or four years ago. That doesn’t mean those businesses aren’t growing year-on-year and beginning to get stronger.”

Sales at the company, which operates the Nicholson’s, All Bar One and Harvester brands, climbed 10.6% to £1.3 billion in the six months to the beginning of April, but pre-tax profits slipped back 30% to £40 million amid a surge in costs and an end to the temporary reduction in VAT relief.

Urban said he had seen early signs of easing cost inflation, and future price rises at the pub chain would be expected to be less steep, while staff shortages and pressures on hiring affecting the industry were also easing off.

M&B shares fell 2% to 191p.

All Bar One owner Mitchells & Butlers has said it is seeing “early signs” of easing cost pressures as it revealed a pick up in recent sales growth. (PA Media)
All Bar One owner Mitchells & Butlers has said it is seeing “early signs” of easing cost pressures as it revealed a pick up in recent sales growth. (PA Media)

British Land swings into the red as property portfolio value tumbles

09:14 , Daniel O'Boyle

Sliding values across British Land’s huge estate has pushed the property giant to a statutory £1 billion pre-tax loss in a “volatile” economic and political year, but the landlord cheered a flurry of new lettings and rental growth.

The developer, which is behind schemes such as Broadgate next to Liverpool Street station, also owns retail parks, life sciences space and warehouses.

Chief executive Simon Roberts said there was plenty to be upbeat about, from a underlying profit rise of 7% to retail parks recording rental growth for the first time in four years. He added: “Whilst we remain mindful of ongoing macroeconomic challenges, the upward yield pressure appears to be easing and there are early signs of yield compression for retail parks.”

Read more here

Shares in JD Sports fall after results, Sage higher

08:19 , Graeme Evans

JD Sports Fashion shares have opened 1.5% lower, despite the sportswear chain racking up over £10 billion of sales and adjusted full-year profits of £991 million. The company is also reassured by current trading and expects a surplus in the current financial year above £1 billion, but shares still fell 2.7p to 167.55p.

Other results-day fallers included British Land and Experian, with their shares down 3% and 5% respectively.

Blue-chip stocks moving in the right direction included accounting software group Sage after it said it now expects organic recurring revenue growth of 11% for this year. The stock rose 3% or 24.4p to 845.5p.

The FTSE 100 index weakened 17.18 points to 7,733.90, while the FTSE 250 index fell 72.46 points to 19,200.26.

JD Sports cracks the US

08:13 , Simon English

JD Sports sales raced past £10 billion for the first time this year, as the trainers and leisure wear giant cemented its position as one of the most successful retailers in the UK.

With the high street flailing and internet competition intense, JD continues to grow, including in America, where many UK retailers including Tesco and M&S have fallen flat in the past.

JD shares, up almost 2000% in the last ten years, could keep rising say analysts.

The business is now valued at £8.8 billion, more than Next, generally regarded as the best run retailer in Britain.

For the year to January sales jumped from £8.5 billion to £10.1 billion. Profits are nearing the £1 billion mark at £991 million, up from £947 million. It is one of the biggest global sellers of Adidas, Puma and New Balance goods.

New chief executive Régis Schultz, the replacement for industry legend Peter Cowgill, said this morning: “The beauty of JD, the magic of JD, is that our buyers are the best in the world. We don’t rely on one brand, we don’t rely on one product…there is always something new coming.”

read more here

Return of the SPAC? Admiral Acquisition Group IPOs in London

08:07 , Daniel O'Boyle

A Special Purpose Acquisition Group (SPAC) has listed on the London Stock Exchange after raising $550 million.

Admiral Acquisition Group aims to buy a private company in order to allow them to list on the London Stock Exchange.

SPACs surged in popularity in 2021, mainly on Wall Street, with online car retailer Cazoo and payments giant Paysafe among the companies being taken public.

But the trend sharply fell off as the vast majority of these companies ended up producing negative returns for shareholders.

Admiral Acquisition Corp is led by Sir Martin Franklin, nephew of DNA pioneer Rosalind Franklin.

Savills “materially impacted” by property price drops in Europe

07:51 , Daniel O'Boyle

Estate agent Savills says its performance for the first half of the year has been “materially impacted” by the “ongoing recalibration” of investment markets.

Its UK performance has been largely in line with expectations, as property prices corrected more quickly than elsewhere.

However, in continental Europe and the Middle East, volumes have been “significantly reduced”.

“ Leasing momentum remains subdued and across capital markets, yields have moved out considerably, and the correction, although not yet complete, is well underway,” the estate agent said.

CEO Mark Ridley said: “During this period of adjustment, I am delighted with the response of our people both in helping clients facing challenging circumstances and in seeking longer term business development initiatives, which our strong balance sheet enables us to pursue at this opportune time.”

Big-name energy suppliers fined for delayed compensation payments to customers switching accounts

07:49 , Michael Hunter

Three major energy suppliers have been fined a total of £8 million by regulators for late or failed compensation payments due to customers relating to people who switched their accounts

E.On Next, Good Energy and Octopus Energy were slapped with the fines by Ofgem after it said they “either missed or unduly delayed” compensation payments due when the suppliers did not provide a final bill within six weeks of a customer switching to another provider.

Ofgem said the fines came after it tightened the rules in May 2020 to cut delays in sending the final bill after customers changed suppliers. It is the first time it has issued fines since the change, and the action came at a time when higher prices for gas and electricity followedRussia’s invasion of Ukraine and led the cost-of-living crisis.

The regulator’s director for strategy, Neil Kenward, pointed out that more customers are likely to switch accounts as the energy market returns to more normal levels.

“This action is a reminder to suppliers that they need to make switching as easy and convenient as possible for their customers, and where they cause undue delay, pay compensation swiftly,” he added.

City watchdog says over 3 million more people struggle with credit

07:32 , Michael Hunter

The main City watchdog has said that there are over 3 million more adults struggling with their credit commitments and bills, taking the total to almost 11 million people.

The number of adults who missed repayments or failed to settle bills in at least three of the last six months hit 5.6 million, up by 1.4 million, as the cost-of-living crisis bit.

The Financial Conduct Authority said that it reminded 3,500 lenders of how they should be supporting borrowers in financial difficulty. It told 32 lenders to make changes to the way they treat customers, with £29 million in compensation being secured for over 80,000 customers.

Read more

US markets struggle amid debt default focus, FTSE 100 seen lower

07:32 , Graeme Evans

Wall Street traders continue to sit on the sidelines while they await developments on the US debt ceiling talks between President Joe Biden and congressional leaders.

The negotiations began last night, with Treasury secretary Janet Yellen reiterating that the country is in danger of a debt default by 1 June.

The Dow Jones Industrial Average fell 1% yesterday after DIY retailer Home Depot dampened the mood with a downbeat assessment on the demand outlook.

The S&P 500 index dropped 0.6% but the Nasdaq was more resilient as the recent progress for mega cap tech stocks continued on hopes that US interest rates have peaked.

Trading in US futures points to a flat start to today’s Wall Street session, while CMC Markets expects the FTSE 100 index to open 11 points lower at 7740. This continues the recent performance after the top flight yesterday drifted 0.3% in a light session for trading volumes.

Japan shares boosted by GDP surprise

07:11 , Graeme Evans

The Japanese economy’s better-than-expected start to 2023 today contributed to a milestone session for the country’s stock market.

The Nikkei 225 broke through the 30,000 threshold for the first time since September 2021, while the domestic-focused Topix Index reached its highest level in three decades.

The stock market rally came as the latest Japan GDP numbers showed the economy grew by 0.4% in the first quarter, with the weaker yen and a strong rebound in services activity after the pandemic helping to drive the performance.

Economists had been expecting a quarter-on-quarter growth rate closer to 0.1%. The annualised rate came in at 1.6%, compared with forecasts for 0.8%.

Recap: Yesterday’s top stories

06:47 , Simon Hunt

Good morning. Here’s a summary of our top stories from yesterday:

  1. Vodafone is to lay off 11,000 staff as its new CEO unveiled fresh turnaround plans.

  2. Boohoo plunged to a £90 million loss but its CEO vowed to return the company to growth.

  3. Landsec saw the value of its London properties fall by £500 million.

  4. Greggs abandoned its legal battle with Westminster City Council over late-night sausage rolls.