FTSE 100 Live: FTSE closes at 7764; Ryanair orders $40bn worth of aircraft; house prices down
The FTSE 100 is down slightly this morning, after strong trading so far today in Asia, despite a slowdown in Chinese export growth.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: ‘’Investors are treading carefully ahead of the key US inflation report out tomorrow as economic data becomes king while markets assess what is next for interest rates.”
Halifax also released its latest House Price Index, showing a dip in prices in April after three consecutive months of recovery.
FTSE 100 Live Tuesday
House prices down slightly in April
JD Sports to buy French trainer chain Courir
Shares in PurpleBricks slide after sale update
FTSE closes at 7764
Tuesday 9 May 2023 16:37 , Daniel O'Boyle
The FTSE 100 closed down 0.2% at 7,764.09 today.
Though it started roughly level and briefly entered positive territory, the index of London blue-chips fell in the mid-morning, at one point hitting a low of 7,739.4. Despite a minor rally late in the day, it still finished below where it started.
Unite Group and Ocado were the day’s biggest fallers.
House prices fall in April as mini-Budget recovery hits speedbump — Halifax
Tuesday 9 May 2023 16:25 , Daniel O'Boyle
House prices declined slightly in April, ending the recent trend of mini-Budget recovery, according to the latest data from Halifax.
The average house price in the UK was down 0.3% from March to £286,896, ending a three-month trend of growth. However, this was still up year-on-year and quarter and quarter.
The average price is still £7,000 less than the peak reached in the Summer, before the tumult of the mini-Budget.
NHS boards asked to draw up plans for junior doctors’ strike
Tuesday 9 May 2023 16:00 , Daniel O'Boyle
NHS boards in Scotland have been asked to draw up contingency plans in case junior doctors go on strike, the Health Secretary said.
Michael Matheson told MSPs he is doing “everything in my power” to avoid a junior doctors’ strike, which he said would be “very disruptive”.
Tony Blair says listing of son Euan’s edtech unicorn Multiverse is ‘some way off’
Tuesday 9 May 2023 15:46 , Daniel O'Boyle
Tony Blair says any possible float of his son’s billion-dollar education tech firm Multiverse is still “some way off”, while shying away from an answer on whether he thought the firm should list in London when it does eventually go public.
In an interview with Bloomberg TV, the ex-Prime Minister was asked about whether Multiverse - founded by Euan Blair in 2016 - would float in London or look elsewhere, as UK tech firms shun the City in favour of New York.
New strike announced on the Elizabeth Line in dispute over pay
Tuesday 9 May 2023 15:07 , Daniel O'Boyle
The first anniversary of the opening of the Elizabeth line will be marked by a strike that could force part of the line to close.
The TSSA union announced on Tuesday that its members are due to walk out for the second time this year in a battle to secure pay parity with other workers on the £20bn line.
The union has chosen to take action on Wednesday May 24 – a year to the day the line, which has become the best-used railway in the UK , first opened to passengers under central London.
100,000 homeowners facing mortgage blow in London
Tuesday 9 May 2023 14:54 , Daniel O'Boyle
London homeowners face a £700 million mortgage bombshell this year as thousands of borrowers on cheap fixed deals are forced to refinance them at far higher rates.
More than 100,000 fixed-rate loans secured on homes in the capital are due to expire between now and the end of the year, mostly five and two-year deals taken out in 2018 and 2021 respectively when mortgage rates were at all-time lows of around the two per cent mark.
US shares follow London down
Tuesday 9 May 2023 14:48 , Daniel O'Boyle
Shares in New York followed their London counterparts down today, ahead of tomorrow’s inflation reading.
The S&P 500 is down 0.4% to 4122.30, while the Dow Jones dipped slightly to 33,591.68. The tech-focused Nasdaq is down 0.5% 12,196.68.
Boeing was among the top risers after agreeing a $40 billion deal with Ryanair for 300 737 Max 10 aircraft.
Pearson taking legal action over use of its content to train language models, as it announces own AI plans
Tuesday 9 May 2023 14:33 , Daniel O'Boyle
Textbooks giant Pearson is currently taking legal action over the use of its intellectual property to train AI models, chief executive Andy Bird revealed today as the firm laid out its plans for its own artificial intelligence-powered products.
The firm laid out its plans on how it would use AI a week after its share price tumbled by 15% as American rival Chegg said its own business had been hurt by the rise of ChatGPT.
Ryanair orders $40bn worth of Boeing 737 Max 10s
Tuesday 9 May 2023 13:56 , Daniel O'Boyle
Irish low-cost airline Ryanair has ordered 300 Boeing 737 Max 10 Aircraft, in an order worth $40 billion.
It is the largest order ever placed by an Irish company for US manufactured goods. The business said the deal will create 10,000 jobs and allow for 80% passenger growth between 2023 and 2034.
“Ryanair is pleased to sign this record aircraft order for up to 300 MAX-10s with our aircraft partner Boeing,” CEO Michael O’Leary said. “These new, fuel efficient, greener technology aircraft offer 21% more seats, burn 20% less fuel and are 50% quieter than our B737-NGs. This order, coupled with our remaining Gamechanger deliveries, will create 10,000 new jobs for highly paid aviation professionals over the next decade, and these jobs will be located across all of Europe’s main economies where Ryanair is currently the No.1 or No.2 airline.
“In addition to delivering significant revenue and traffic growth across Europe, we expect these new, larger, more efficient, greener, aircraft to drive further unit cost savings, which will be passed on to passengers in lower air fares. The extra seats, lower fuel burn and more competitive aircraft pricing supported by our strong balance sheet, will widen the cost gap between Ryanair and competitor EU airlines for many years to come, making the Boeing MAX-10 the ideal growth aircraft order for Ryanair, our passengers, our people and our shareholders.”
Energy bills to drop from July, experts say
Tuesday 9 May 2023 13:37 , Daniel O'Boyle
Energy bills are expected to drop significantly from the start of July, according to new analysis released on Tuesday.
Energy industry consultancy Cornwall Insight said it thinks the price cap on energy bills will fall by more than £1,200 for the average household when it is next updated.
However, because the Government bill support, which has artificially lowered bills, will fall away, households will only be around £437 better off per year on average.
10 days to claim pension credit and qualify for £301 cost-of-living payment
Tuesday 9 May 2023 12:55 , Daniel O'Boyle
Pensioners on low incomes are being urged to check whether they could be eligible for pension credit, worth over £3,500 per year on average.
There are just 10 days to go for people to claim pension credit and still qualify for the latest £301 cost-of-living payment, which they will receive direct into their bank accounts.
Thames Water bosses give up their bonuses after storm over sewage leaks
Tuesday 9 May 2023 12:03 , Daniel O'Boyle
The two top bosses of Thames Water are to give up their bonuses for the last financial year following criticism of its record on sewage discharges into rivers and fixing leaks.
Chief executive Sarah Bentley and chief financial officer Alastair Cochran said it “doesn’t feel right” to accept performance-related payments. In the previous year, Ms Bentley received £496,000 in remuneration linked to performance on top of the base pay of £750,000. Mr Cochran was awarded £298,000 in addition to his salary of £450,000.
City comment: Return of the 100% mortgage isn’t reckless — it’s what London renters need
Tuesday 9 May 2023 11:28 , Daniel O'Boyle
It is hard to read a headline about the “return of the 100% mortgage” without a Pavlovian frisson of alarm.
It was reckless “zero deposit” lending by the likes of Northern Rock in the Noughties that helped pour fuel on the flames of the credit crunch and subsequent financial crisis.
Those of us with longer memories will recall how the negative equity disaster of the early Nineties followed another cycle of bad lending decisions and bunged up the housing market for the best part of a decade.
Sainsbury’s cuts cost of bread and butter to reflect falling commodity prices
Tuesday 9 May 2023 10:46 , Daniel O'Boyle
Sainsbury’s has cut the price of some of its lines of bread and butter in response to falling commodity prices.
The UK’s second-biggest supermarket chain has lowered the price of its own-brand 250g salted and unsalted butter by 5% to £1.89.
It is also cutting the price of its 800g Soft White Medium, Wholemeal Medium, Wholemeal Thick and Toastie White loaves of bread by 11% to 75p.
New zero-deposit mortgage launched for renters aspiring to be homeowners
Tuesday 9 May 2023 10:29
Renters who lack savings or financial support from their family can potentially make the jump on to the housing ladder with a new zero-deposit mortgage.
Skipton Building Society’s new “track record” mortgage could give a helping hand to people with a strong history of paying their rent but who have been only able to save a little or nothing for a deposit to buy their first home.
The deal is available for first-time buyers across Britain. Tenants aged 21 and over may be able to take out mortgages at between 95% to 100% of the value of the property they want to buy.
Direct Line shares under pressure, upgrade boosts IAG
Tuesday 9 May 2023 10:24 , Graeme Evans
Direct Line shares are back under pressure after it revealed a further squeeze from higher claims costs.
The warning follows the FTSE 250 company’s shock decision in January to scrap its prized dividend after weather-related claims came in double previous expectations.
Today, interim boss Jon Greenwood told investors the earnings outlook remained challenging amid pressure from damage-related costs in motor insurance.
He also reported a 2.5% fall in the number of in-force policies as Direct Line focused on margins by increasing average motor renewal premiums 19% year-on-year in the first quarter.
The trading update dented a recent recovery for shares, which fell back 6% or 9.25p to 155.2p. They had been 233p prior to January’s warning.
Other insurers took the Direct Line update in their stride, however, with Admiral and Aviva shares both trading close to their opening marks in the FTSE 100 index.
The wider top flight fell 22.12 points to 7756.26, with rate sensitive property stocks including British Land and Segro among those more than 2% lower as investors anticipate another quarter point hike in borrowing costs by the Bank of England on Thursday.
On the risers board, education publisher Pearson led the way with a gain of 22.2p to 846.8p while banking heavyweights NatWest and Barclays were 2.5p and 1.4p higher at 261.8p and 154.7p respectively.
British Airways owner IAG lifted 1.6p to 152.1p after last week’s strong first quarter trading update prompted broker Liberum to make big upgrades to its short-term forecasts.
The City firm also raised its price target from 240p to 350p as it reflected the more favourable fuel cost outlook and signs of resilient demand.
Other travel stocks attracted buying interest in the FTSE 250 as cruise ship company Carnival lifted 5% or 34.8p to 737.2p and holidays giant TUI rallied 23p to 554p.
Their momentum failed to prevent the FTSE 250 index from falling 0.6% or 113.14 points to 19,339.36, with property firms Derwent London and Sirius Real Estate among the stocks down by more than 3%.
Pearson shares surge as it teases AI plans
Tuesday 9 May 2023 10:05 , Daniel O'Boyle
Shares in textbooks giant Pearson surged today as it teased plans for new AI-powered products.
The firm will hold a call later today to announce how it intends to use artificial intelligence.
Pearson shares fell by 15% in a single day last week after US-listed education business Chegg warned of the impact of ChatGPT on new user take-up. While it recovered much of those losses, it is still below where it started last week.
“AI has played an important role across our product portfolio for many years,” Pearson CEO Andy Bird said. “As generative AI develops, we expect it to create significant positive opportunities for Pearson, due to our unrivalled depth of content and data.
“Learners and educators place enormous trust in us so we have a responsibility to be thoughtful and considered in how we use this technology, whilst continuing to move at pace to enhance our products.”
“Pearson has adopted an AI strategy that will embed this technology across key products throughout the portfolio in a way that enhances the teaching and learning experience. With several projects well underway, Pearson is actively focused on the significant opportunities across the company, especially those using its trusted, proprietary, learning content. The company has been working to embed generative AI across a number of key products.”
Shares are up 3.4% to 845.6p today.
Credit Suisse boss to join UBS board after rescue takeover closes
Tuesday 9 May 2023 09:58 , Daniel O'Boyle
UBS said the boss of Credit Suisse will join its board after it closes its rescue takeover of the Swiss banking rival.
It is part of a major leadership reshuffle two months after the Government-led rescue takeover of Credit Suisse in a 3.25 billion US dollar (£2.64 billion) deal by UBS.
Ulrich Korner, who joined Credit Suisse as chief executive officer last summer, will now join the UBS group executive board.
Supermarkets under fire in growing row over soaring cost of food
Tuesday 9 May 2023 09:35
Supermarkets came under fire on Tuesday in a growing war of words over the soaring cost of food for millions of shoppers.
They were accused of hiking up prices by up to 46 per cent for some fruit while producers were hardly seeing what they get paid go up.
The claim came from Ali Capper, chair of the National Farmers’ Union’s horticultural board and of English Apples and Pears.
PurpleBricks aims to find a buyer as soon as possible as payment provider withholds funds
Tuesday 9 May 2023 08:45 , Daniel O'Boyle
Floundering online estate agent PurpleBricks is looking to find a buyer as soon as possible after its payment provider started withholding a portion of the funds it would ordinarily pass on to the firm.
PurpleBricks said the number of properties it had been instructed to sell did not grow as expected over the last three months. This led to its payment provider for ‘pay now’ sales withholding funds.
The business now has only £9.1 million in cash left, and no longer sees a path to be profitable again.
After a February profit warning, PurpleBricks put itself up for sale. But now it says it was aiming to speed up the sale process because of its precarious cash position.
The board has engaged with “a significant number of potential offerors”, but so far the shareholder returns for all existing offers would be “materially below the company’s current share price”.
Shares in the estate agent plummeted by more than 50% on the back of the news.
JD Sports leads FTSE 100, Marshalls down 14%
Tuesday 9 May 2023 08:35 , Graeme Evans
Shares in JD Sports Fashion top the FTSE 100 index, rising 3% or 5.25p to 167.2p on the back of its deal to acquire French trainer chain Courir for £283 million.
British Airways owner IAG is also doing well after Liberum upgraded its price target from 240p to 350p due to a more favourable fuel cost outlook and resilient demand. The shares were 2.45p higher at 152.45p.
The FTSE 100 index was 6.88 points higher at 7784.85, while the FTSE 250 index dipped 21.49 points to 19,431.
Big fallers in the second tier included car insurer Direct Line, which fell 11.5p to 152.9p after reporting further pressure on claims costs. A focus on profitability also led to a reduction of in-force motor insurance policies of 2.5% across the first quarter.
Pavings supplier Marshalls fell 14% or 40.5p to 251.8p after revealing that trading in the year to date has been weaker than originally anticipated.
Watchdog opens probe into audit of Joules by Deloitte
Tuesday 9 May 2023 07:57 , Michael Hunter
London’s accountancy watchdog, the Financial Reporting Council announced today that it has opened an investigation into the audit of the collapsed fashion retailer Joules by Deloitte LLP.
The FRC said the investigation concerned the work carried out by Deloitte for the year ended on May 30 2021.
The decision to take the action was made at the FRC’s Conduct Committee on 20 March 2023. The investigation will be conducted by the FRC’s Enforcement Division under the Audit Enforcement Procedure.
Joules. famous for its range of designer women’s wear, was bought out of administration by Next in December 2022 for £34 million.
A Deloitte UK spokesperson said: “We will co-operate fully with the Financial Reporting Council’s investigation and remain committed to the highest standards of audit quality.”
JD Sports to buy French trainer chain Courir for £283 million
Tuesday 9 May 2023 07:38 , Michael Hunter
High street clothing chain JD Sports has announced a major expansion into European markets via a €325 million (£283 million) deal to buy Courir of France.
JD said Courir is “a business that is held in high regard in the European sportswear community,” and that part of the appeal of the deal was Courir’s stores that operate “with a primary focus on a female consumer.”
The move follows JD’s recent strategy overhaul, in which it outlined intentions to increase growth
JD said today that for 2022, Courir had consolidated revenues of €609.8 million.
Courir has 313 stores in six European countries, including 191 in France and 24 in Spain.
Sterling above $1.26, US inflation in focus
Tuesday 9 May 2023 07:28 , Graeme Evans
Sterling remains above $1.26 - near its highest level in a year - as traders bet that the Bank of England will hike interest rates by at least another quarter point on Thursday.
The pound’s recent strength against the US dollar also reflects signs that the Federal Reserve may be near the peak of its tightening cycle.
Elsewhere, oil prices have slipped back after a stronger session yesterday saw Brent Crude futures shake off last week’s economy-led weakness to top $77 a barrel.
The oil benchmark stood at $76.47 this morning, while gold was slightly stronger at $2026 an ounce.
US stock markets were flat on Monday as attention turns to tomorrow’s inflation reading, with economists looking for an unchanged annual rate of 5% in April.
CMC Markets expects the FTSE 100 index to open 25 points higher at 7803 as London shares catch up with Friday’s strong finish on Wall Street, when robust jobs figures eased jitters over the US economy.
WANdisco appoints former sage boss Stephen Kelly as interim CEO
Tuesday 9 May 2023 07:20 , Simon Hunt
Beleaguered tech firm WANdisco has appointed the former boss of Sage Stephen Kelly to become its interim CEO as it continues to deal with an internal investigation into potential fraud by an employee.
Kelly was CEO of Sage from 2014 to 2018 before he was abruptly ousted and put on gardening leave for nine months.
Kelly said: “As a passionate champion of UK Tech companies striving to become Number 1 on the global stage, I am excited by the prospect of joining WANdisco.
“I am a firm believer in the potential of WANdisco’s technology to become a market leader and, whilst there is much work to be done, I have relished my previous UK listed turnaround roles.”
Kelly previously blasted the board of WANdisco for the firm’s “dramatic demise” after it found a huge hole in its financial statements.
He said: “The ‘best case’ conclusion is this dramatic demise has resulted from poor governance and a woeful control environment. The Board, Chair/CEO, CFO are all conflicted in the crisis. Now the Board should be helping an external investigation and NOT leading it internally.”
The ‘best case’ conclusion is this dramatic demise has resulted from poor governance and a woeful control environment. The Board, Chair/CEO, CFO are all conflicted in the crisis. Now the Board should be helping an external investigation and NOT leading it internally.
— Stephen Kelly (@SKellyCEO) March 14, 2023
House prices down slightly in April
Tuesday 9 May 2023 07:07 , Daniel O'Boyle
House prices declined slightly in April, according to the latest data from Halifax.
The average house price was down 0.3% from March to £286,896, ending a three-month trend of growth. However, this was still up year-on-year and quarter and quarter.
The average price is still £7,000 less than the peak reached in the Summer, before the tumult of the mini-Budget.
“The economy has proven to be resilient, with a robust labour market and consumer price inflation predicted to decelerate sharply in the coming months,” Kim Kinnaird, director of Halifax Mortgages, said. “Mortgage rates are now stabilising, and though they remain well above the average of recent years, this gives important certainty to would-be buyers. While the housing market as a whole remains subdued, the number of properties for sale is also slowly increasing, as sellers adapt to market conditions.”
Friday’s top stories
Tuesday 9 May 2023 06:53 , Daniel O'Boyle
Good morning. Here are some of Friday’s top stories:
A take-off in demand for leisure travel helped the owner of British Airways return to quarterly profit for the first time since Covid, as the industry prepares for the crucial summer getaway season.
Insurance group and activist HSBC investor Ping An found few allies in its plan to force a breakup of the London-headquartered banking giant, with more than 80% of shareholders voting against a pro-split proposal.
InterContinental Hotels Group (IHG) boss Keith Barr is to check out at the end of June so he can return to the US
Export growth slows in China
Tuesday 9 May 2023 06:52 , Simon Hunt
Export growth slid from 14.8% to 8.5% in China in April, coming in slightly ahead of analyst expectations of 8% according to a Reuters poll, in fresh signs the country’s economy continues to struggle despite the lifting of Covid restrictions.
Imports fell 7.9% compared to last year in a mark of weak domestic demand.
Zichun Huang, China economist at Capital Economics, said: “Given the gloomy outlook for external demand, we think exports will decline further before bottoming out later this year.
“We still think reopening rebound in domestic demand will drive a recovery in imports over the coming months.”