Yahoo Finance FTSE 100 Live 5 February: Index closes flat amid decreased rate-cut hopes, Government cuts NatWest stake
Struggling Vodafone shares are in focus today after the mobile phone giant published a robust trading update.
The rest of the London market shrugged off geopolitical concerns, with FTSE 100-listed Land Securities, GSK and National Grid also the beneficiaries of broker upgrades.
In other City developments, CMC Markets announced job cuts and shares in Southend Airport owner Esken tumbled another 20%.
Key Points
CMC Markets announces job cuts
Southend Airport owner Esken in debt warning
Vodafone lifted by cloud progress
Closing market snapshot
Monday 5 February 2024 16:58 , Daniel O'Boyle
Take a look at our end-of-day market snapshot as the FTSE 100 closed down 2.6 points.
FTSE 100 closes at 7,612.86
Monday 5 February 2024 16:39 , Daniel O'Boyle
The FTSE 100 closed at 7,612.86 today, 2.7 points below where it started, despite a strong morning.
The index rose as high as 7667 by lunchtime, but in an increasingly familiar pattern, its gains disappeared in the afternoon as US markets opened.
Ocado and GSK were the day's top risers, JD Sport and Ashtead were the biggest fallers.
EV maker Arrival enters administration with 400 jobs at risk
Monday 5 February 2024 16:24 , Daniel O'Boyle
British electric vehicle maker Arrival has entered administration, putting around 400 jobs at risk.
The formerly New York-listed company, which had a manufacturing plant in Oxfordshire, said it had been impacted by tough economic conditions and delays to bringing its prototype vehicles to market.
The firm has appointed EY as administrators.
In a statement, EY said: Arrival's "liquidity position has been impacted by challenging market and macroeconomic conditions resulting in delays in getting the group’s products to market.
"As such, the joint administrators are now exploring options for the sale of the business and assets of the companies, including its electric vehicle platforms, software, intellectual property and R&D assets, for the benefit of creditors."
Big banks up mortgage rates -- unless you are a first time buyer
Monday 5 February 2024 15:13 , Daniel O'Boyle
HSBC and the Halifax today increased the cost of mortgages, despite a widespread expectation that the Bank of England will cut interest rates before the year is out – perhaps as early as the summer.
HSBC said that from tomorrow, Tuesday Feb 6, existing customers who are switching to a new deal or borrowing more will see 2-year fixed rate deals rise. So will the 5-year fixed rate deal
That comes just one month after HSBC introduced a 5-year fix at 3.94% for those with 40% equity in their homes.
Santander UK and Lloyds deny breaching US sanctions over links to Iranian firms
Monday 5 February 2024 15:05
Lloyds and Santander UK have denied breaching US sanctions after new reports claimed the banks had provided accounts to British holding companies linked to an Iran-backed petrochemicals firm.
Petrochemical Commercial Company (PCC), which is linked to the Iranian state, used a web of front companies in the UK to discreetly move money around the world, according to documents seen by the Financial Times (FT).
Lloyds and Santander UK provided bank accounts to two of those companies, the report revealed.
US shares lower
Monday 5 February 2024 15:00 , Daniel O'Boyle
US stocks are lower this morning after Jerome Powell's comments on 60 Minutes last night.
Kathleen Brooks, research director at XTB, says: "Stock markets have opened lower in the US, as the market digests news that there may only be three rate cuts from the Fed this year.
"This is that the Fed said back in December when they released their most recent Dot Plot, and Jerome Powell suggested that the forecasts were unlikely to change in the weeks before the March meeting. The market is now having to recalibrate further its expectations for monetary policy, when it should have listened to the Fed all along. Stock markets in the US are falling as bond yields are rising, there could also be some seasonality at play."
Snapchat owner to cut 500 jobs in 'team restructure'
Monday 5 February 2024 14:24 , Daniel O'Boyle
Snap Inc, the owner of social media app Snapchat is set to cut 10% of its workforce as part of a 'team restructure'
That would amount to more than 500 jobs based on the total global headcount of 5,288 disclosed in its most recent annual report.
In a statement the California-based company unveiled a "a plan to reduce our global headcount by approximately 10% of our global full time employees.
City Comment: Hunt knows he must scrap the ‘tourist tax’. But the politics are tricky
Monday 5 February 2024 13:57 , Jonathan Prynn
News that Jeremy Hunt has asked the Office for Budget Responsibility (OBR) to run the rule over the abolition of VAT-free shopping for foreign tourists should not come as a great surprise.
It did not get much attention at the time, but in the Commons debate that followed the Autumn Statement in November the Chancellor promised Tory MP Sir Geoffrey Clifton-Brown, leader of the Scrap the Tourism Tax campaign, that “we are looking again at the numbers”.
Things have now moved on. The “we” — that is, the Government that took the decision in the first place — is now the “they” of the independent OBR.
Market snapshot: FTSE 100 keeps climbing
Monday 5 February 2024 12:58 , Daniel O'Boyle
Diminished hopes of rate cuts have not stopped the FTSE 100 from climbing further.
Travel-related spending up 12% compared with last January, says bank
Monday 5 February 2024 12:28 , Daniel O'Boyle
UK consumers soaked up warmer weather with trips to Spain last month, while fewer people spent money in pubs and bars on home territory, according to new data from digital bank Monzo.
Spending data from across the digital bank’s more than eight million customers revealed an increase in purchases on trips away in January.
Travel-related spending rose by 12% during the month compared with the same period last year, with budget airline Ryanair the most popular provider, Monzo said.
Data still suggests 'worsening trend in layoffs'
Monday 5 February 2024 11:31 , Daniel O'Boyle
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, says that while the latest Labour Force Survey data suggests the job market is strong, more recent stats paint a less optimistic picture.
Market snapshot with FTSE 100 higher
Monday 5 February 2024 11:04 , Daniel O'Boyle
Take a look at the latest market snapshot.
Gilt yields have risen today after Federal Reserve chair Jerome Powell said the Fed was wary of cutting rates too soon, while new data showed the UK labour market might be tighter than previously thought.
Kurt Geiger breaks records as celebrities flock to its London range of handbags
Monday 5 February 2024 11:00 , Daniel O'Boyle
London fashion house Kurt Geiger broke records over the peak sales season, helped by a stellar range of celebrities seen wearing the brand.
Jennifer Lopez, Julia Roberts, Kylie Jenner and Paris Hilton were among the fashionistas who helped power sales 15% higher to £45 million. It made for the most profitable month in the Clerkenwell-based designer’s history, with handbags and accessories leading the trend.
Store sales in the UK, including at its 2,900-square-foot Oxford Street flagship, rose 12%, with online sales up 45%. But the growth was powered by the US, where sales were up 60% overall.
US economy 'to grow three times as fast as UK’s' in 2024
Monday 5 February 2024 10:12 , Daniel O'Boyle
America’s economy is set to grow three times as fast as the UK’s this year as both countries go to the polls to elect a new leader, senior economists forecast on Monday.
The Organisation for Economic Co-operation and Development predicted the US economy will expand by 2.1 per cent in 2024, an upgrade of 0.6 percentage points on its November forecast, while Britain will see growth of 0.7 per cent, an unchanged figure.
The OECD’s latest report laid bare the economic background for the US election, where Joe Biden appears set to face Donald Trump with solid growth.
Vodafone shares struggle despite UK growth, upgrade lifts Land Securities
Monday 5 February 2024 10:09 , Graeme Evans
Vodafone shares eased 0.9p to 67.7p today as the mobile phone giant offset strong UK growth with a flat performance in its largest market.
Service revenues in the UK improved 5.2% as chief executive Margherita Della Valle hailed momentum in several markets in Europe and Africa as well as cloud and Internet of Things growth.
However, investors are worried a dividend cut looms as the company works through a strategic overhaul. And in Germany, which accounts for about 30% of business, service revenues today edged up by just 0.3%.
The weak performance by Vodafone shares came in a robust session for the London market after Friday’s strong jobs figures boosted confidence in the US economy.
The FTSE 100 index improved 10.76 points to 7,626.30, with Ocado the top riser after a gain of 4% or 18p to 523p.
City upgrades benefited several stocks, including Land Securities after Morgan Stanley’s 730p target price lifted the Piccadilly Lights owner by 8.8p to 659.8p.
National Grid also cheered 13.5p to 1054p after Jefferies valued shares at 1330p, while GSK gained 20.4p to 1631.6p following Deutsche Bank’s upgrade to 1950p.
The FTSE 250 index added 16.30 points to 19,188.94, led by Watches of Switzerland as shares rallied 3% or 10.8p to 370.4p.
CBI settles legal action with ousted boss Tony Danker
Monday 5 February 2024 10:03 , Daniel O'Boyle
The Confederation of British Industry (CBI) has settled legal action brought by its former director-general who was fired last year following allegations about his behaviour.
The business group said it and Tony Danker have agreed an “undisclosed settlement” following his sacking from the post in April 2023.
Mr Danker’s sacking came after he faced allegations about his behaviour in the workplace.
Strong growth for private sector in January
Monday 5 February 2024 09:39 , Daniel O'Boyle
The UK private sector grew faster than previously thought in January, according to the S&P Global UK Services PMI
The composite PMI for the month came to 52.9, putting it firmly ahead of the 50 mark which separates growth from decline. The figure is up from the ‘flash’ reading of 52.5 published during the month.
The figures provide more hope that, if the UK did enter a recession at the end of 2023, it would likely be the shortest and shallowest one in history.
The dominant service sector grew at its fastest pace in May 2023.
Tim Moore, Economics Director at S&P Global Market Intelligence, which compiles the survey, said: "The revival in UK service sector performance gained momentum at the start of 2024, with output growth accelerating to its fastest for eight months amid stronger business and consumer spending. New orders have also rebounded this winter as receding recession risks and looser financial conditions led to greater willingness to spend among clients.”
Government sells more of NatWest
Monday 5 February 2024 09:33 , Daniel O'Boyle
The Government has sold down its stake in NatWest further, disposing of another 1% of the banking giant.
The taxpayer now owns 35% of the bank, which was bailed out after the Global Financial Crisis. It has gradually sold down its stake in recent years, and its ownership of the banking giant came under heightened attention last year amid the controversy over Nigel Farage's account with Coutts, which is owned by NatWest.
In his Autumn Statement, Jeremy Hunt revealed plans for a retail share offer, allowing the public to buy NatWest shares.
NatWest shares are down 1.3p to 219.6p today.
More trouble at Southend Airport as owner proposes settlement over debt battle
Monday 5 February 2024 08:46 , Simon Hunt
Shares in Southend Airport owner Esken tumbled another 20% this morning after the firm formerly known as Stobart Group warned its legal tussle with lender Carlyle was making it difficult to secure further finance in the latest twist in the battle for the airport’s future.
Carlyle last month demanded that just under £200 million in loans be urgently repaid after accusing Esken of breaching the terms of the debt deal. Esken refuted this but is now proposing a settlement.
Esken said its plans to extend an exchangeable bond “disrupted significantly” adding “the terms …may now be different than those which the company was previously hoping to achieve."
FTSE 100 higher as upgrades lift GSK and National Grid, Vodafone lower
Monday 5 February 2024 08:37 , Graeme Evans
The pressure on Vodafone shares continued today after the mobile phone giant’s third quarter update received a mixed reaction in the City.
Service revenues growth came in at 4.7% but Vodafone's performance in the key market of Germany slowed compared with the previous three months.
Vodafone shares fell 0.8p to 67.8p in a session when the FTSE 100 index improved 31.47 points to 7,647.01.
Land Securities rose 8.6p to 659.6p after Morgan Stanley improved its price target on the Lakeside retail park and Piccadilly Lights owner to 730p.
National Grid rose 17p to 1057.5p after Jefferies upped its valuation of the shares to 1330p, while GSK lifted 19.2p to 1630.4p following Deutsche Bank’s upgrade to 1950p.
The FTSE 250 index added 37.36 points to 19,210, led by Watches of Switzerland as shares rallied 5% or 16.7p to 376.3p.
Market snapshot as FTSE 100 makes slight gains
Monday 5 February 2024 08:23 , Daniel O'Boyle
Shares are close to flat in early trading this morning.
Take a look at today's market snapshot.
'Dichotomy' in UK jobs market
Monday 5 February 2024 08:06 , Daniel O'Boyle
Kathleen Brooks, research director at XTB, says the new Labour Force Survey says the latest Labour Force Survey data from the ONS shows a ‘dichotomy’ in the UK jobs market.
“While the unemployment rate was revised down, the economic inactivity rate was higher than previous estimates and average hours worked were also revised down to 31.6 hours per week, from 31.7 hours.
“This highlights the dichotomy in the post pandemic labour market: there are less people working, those who are working are working fewer hours, and yet there is a huge demand for labour. The revised survey suggests that wage pressure could remain elevated for some time, which supports the BOE’s caution when it comes to cutting rates and instead focussing on inflation risks.”
Naked Wines promotes UK executive Maza to group CEO
Monday 5 February 2024 07:47 , Michael Hunter
Naked Wines has promoted the executive running its UK business to become CEO of the group.
Rodrigo Maza, its UK managing director since September, will step up to the top job. The company said today he will "work side-by-side with Rowan Gormley", Naked's founder and executive chairman.
The troubled tipple-by-subscription business warned in September that it could even go bust, as it swung to a loss and revealed a plunge in sales. Its peak Christmas period sales, revealed in mid-January, also fell, but in line with its forecasts.
After a transition period, Gormley will "resume his previous role as non-executive chairman," the company said today.
Maza said: " I look forward to working with the team across Naked and getting this amazing company to achieve its full potential."
CMC cuts 200 as job cull fears grow
Monday 5 February 2024 07:45 , Simon English
Growing fears of a mass City jobs cull rose today when spread betting house CMC Markets said it would axe 200 jobs -- 17% of its headcount. Replicated across the Square Mile that would be tens of thousands of jobs.
A statement to the stock market today said:
"In its interim results announcement on 16 November 2023, CMC indicated that the business was reaching the peak of its investment cycle and a cost review was planned for H2 focused on driving efficiency through its global operations. The review has been successfully completed and as a result the Group will be reducing global headcount by approximately 200 positions, representing circa 17% of existing headcount. "
CMC, founded by Tory donor and Boris Johnson backer Sir Peter Cruddas, expects £21 million of savings from the cuts.
Larger banks, including Deutsche, have already announced similar cuts.
Banks and trading houses have been hit by a dearth of deals and lower trading by investors,.
CMC said: "Cost reductions have been primarily achieved by merging support functions across multiple business lines, streamlining reporting lines and automating processes. The Group will continue to seek opportunities to drive efficiencies and control costs while remaining committed to investing in growth opportunities and ensuring its technology remains market leading. "
Shares in City firms will be watched closely today.
Monday 5 February 2024 07:42 , Daniel O'Boyle
The Hipgnosis Songs Fund (HSF) is seeking an indemnity from its founder Merck Mercuriadis, amid a lawsuit accusing him of stealing the idea for the music rights fund.
Mercuriadis is accused of the “unlawful diversion of business opportunity” from a collapsed business named Hipgnosis Music Limited (HML), transferring the business to a separate company.
On Friday, Mercuriadis stepped down as chairman of Hipgnosis Songs Management (HSM) which is the investment adviser for HSF.
Now the fund says it has appointed its own solicitors to review the claim, and is seeking indemnity “against any liability that might be incurred by the Company resulting from the actions of Mr Mercuriadis or Hipgnosis Songs Management”.
Asia stocks recover after early slump, China services growth slows
Monday 5 February 2024 07:41 , Graeme Evans
Volatility in China stock markets continued today, with the Shanghai Composite down 3.5% at one point before a recovery to 1% lower.
Hong Kong’s Hang Seng index also rallied after opening 1.5% lower.
It emerged earlier that China's services activity expanded at a slightly slower pace in January, with a decline in new orders leaving the Caixin services PMI at 52.7 compared with December's five-month high of 52.9.
Japan’s Nikkei 225 rose 0.5% after figures showed an acceleration in the pace of business activity.
Vodafone hails the growth of the cloud and internet of things as Q3 revenues rise
Monday 5 February 2024 07:36 , Michael Hunter
Connected devices in the internet of things helped Vodafone's Cloud Services business increase revenue by a fifth in the third quarter.
It led an overall rise of almost 5% in organic revenue at the Newbury-based multinational. Total revenue slipped by around 2% to €11.4 billion (£9.7 billion).
Margherita Della Valle, Vodafone CEO, said:
"We maintained good service revenue momentum in the third quarter across both Europe and Africa, supported by a further acceleration of Vodafone Business, with our Cloud and Internet of Things services growing over 20%."
ONS survey suggests jobless rate may be lower than thought
Monday 5 February 2024 07:22 , Daniel O'Boyle
The ONS has brought back its labour force survey unemployment stats, which suggest the jobless rate could be significantly lower than previously thought at just 3.9%.
However, the lower rate is mostly due to higher economic inactivity rather than more people in work.
The figures for September to November show an unemployment rate of 3.9%, compared to the 4.2% figure published by the ONS using PAYE data.
The ONS said: “The reweighted estimates suggest that over the last five months, though the employment rate has remained broadly flat, the unemployment rate may have fallen, offset by an increase in the rate of economic inactivity; however, some uncertainty remains in these estimates.”
Revolution Beauty reaches £3m legal settlement with founder
Monday 5 February 2024 07:22 , Simon Hunt
Revolution Beauty has reached a £3 million legal settlement with its founder Adam Minto after a protracted dispute over his management of the company.
Under the terms of the deal, Minto will pay a sum just under £500k annually for the next six years, with interest of up to 8% for any late payments.
A letter of claim sent to Mr Minto said: "The claim alleges that Mr Minto breached his fiduciary, statutory, contractual and/or tortious duties to the company.
"The company is looking to recover material sums relating to the exceptional costs the company incurred as a result of the matters alleged."Minto left the company in 2022.
FTSE 100 seen higher after US jobs cheer, Asia markets struggle
Monday 5 February 2024 07:13 , Graeme Evans
European markets are forecast to make a steady start to the week after strong jobs figures meant Wall Street finished Friday’s session sharply higher.
Non-farm payrolls jumped by 353,000 in January, up from an upwardly revised 333,000 in December in a further sign of resilience in the US economy.
Even though the figures ended any hopes of a March interest rate cut, the Nasdaq Composite finished the session 1.7% higher and the S&P 500 index up by 1.1%. Meta Platforms jumped 20% after announcing its first ever dividend.
Slower growth in China’s services sector after January’s PMI reading edged down to 52.7 meant a mixed session for Asia markets this morning, with the Shanghai Composite down 1.1% and the Hang Seng index slightly lower.
The FTSE 100 index closed down 6.6 points on Friday but is forecast by CMC Markets to open today’s session 11 points higher at 7626.
Recap: Friday's top stories
Monday 5 February 2024 06:36 , Simon Hunt
Good morning from the Standard City desk.
You’d be forgiven for thinking that London’s lacklustre stock market activity is a sign there’s scant new business springing up to whet investor appetites.
The reality is anything but. A brief peer into developments in the fintech industry shows the capital is teeming with innovation.
Speak to the founders of tech start-ups in London and they’ll tell you that early-stage funding for their ideas is plentiful. But getting the cash to scale up – the so-called series B and C rounds – is much harder in Britain, and that’s when they pick up the phone to investors in the US – sometimes relocating the business in the process.
That is the gap that the public markets could and should fill – but neither of these firms look keen to float. As the boss of one of them tells me, they don’t want to take a big knock to their valuation, which is what joining the LSE entails. As small investors continue yanking money out of UK stocks at record pace, that attitude looks set to persist – and we all suffer as a result.
Here's a summary of our other top stories from Friday:
Billionaire co-owner of Asda has confirmed he had a relationship with a partner at EY after it was revealed EY resigned as Asda auditor last year.
Households tapped up for 6% bill hike by water firms - Industry body Water UK reveals the plans for 2024/25, alongside pledge for £14.4 billion investment for the year in response to scandal over mains leaks and sewage in rivers.
Tech firms splashing out on market research help YouGov stand by profit forecasts as other sectors struggle and there are "FX headwinds" from the stronger pound.
Ryanair traffic in January down from 2023 - Wizz Air traffic up but load factor down in further signs safety and geopolitical concerns are putting people off travel
And in City Spy...
