Yahoo Finance FTSE 100 Live: Index closes down 1.1% as gilt yields surge again amid 'sticky' inflation, oil price surge
FTSE 100 closes at 7,588.00
Wednesday 18 October 2023 16:40 , Daniel O'Boyle
The FTSE 100 closed at 7,588.00 today, down 1.1%.
Sticky inflation and higher oil prices both contributed to the fall, also causing a further bond sell-off.
AstraZeneca was the biggest faller, losing £10 billion from its market cap.
30-year gilt yields soar near 15-year highs again, FTSE down 1%
Wednesday 18 October 2023 15:52 , Daniel O'Boyle
Gilt yields have surged further and the FTSE 100 is now down more than 1% for the day.
Only 19% of middle income earners aged 32 to 40 ‘feel prepared for retirement’
Wednesday 18 October 2023 15:18 , Daniel O'Boyle
Less than a fifth (19%) of people on middle incomes who are aged between 32 and 40 years old feel prepared for how they will fund their retirement, a survey indicates.
People were defined as being on a middle income if they had a personal income of between £25,000 to £44,999 a year.
Just one in 10 (10%) had taken professional advice, the research for Aviva found.
The pensions provider raised concerns that people could “set and forget” their default choices around their pension contribution levels, retirement age and investments, perhaps under the mistaken belief that this will be guaranteed to meet their retirement expectations.
Rail union steps up campaign to keep ticket offices open
Wednesday 18 October 2023 14:14 , Daniel O'Boyle
A rail union is stepping up a campaign to keep ticket offices open after claiming there have been months of technology failures and customer complaints.
The Transport Salaried Staffs Association (TSSA) said rail operator c2c has been “plagued” with issues in recent months, as ticket machines, Smartcards and online purchases have broken down.
The union said there have been huge queues, with passengers taking to social media to voice their frustrations.
Lunchtime market snapshot
Wednesday 18 October 2023 13:18 , Daniel O'Boyle
Take a look at our latest market snapshot as the price of oil has surged further
‘Urgent intervention’ called for as London rental inflation crisis continues
Wednesday 18 October 2023 13:09 , Daniel O'Boyle
Average UK house prices in August were “little changed” from a year earlier, according to the Office for National Statistics (ONS).
UK house prices increased by 0.2% on average in the 12 months to August 2023.
The average UK house price was £291,000 in August 2023, which was little changed from 12 months earlier, but £9,000 above a recent low point in March 2023, the ONS said.
Ryanair: Air traffic control chaos happened as Nats ‘collapsed their system’
Wednesday 18 October 2023 12:44 , Daniel O'Boyle
The August bank holiday air traffic control chaos happened as Nats “collapsed their system”, Ryanair boss Michael O’Leary told MPs.
Around 2,000 flights at airports across the UK were cancelled when Nats’s system for automatically processing flight plans failed on August 28.
The company has previously said the problem was caused by a flight plan featuring two waypoints – which use letters and numbers to represent locations – with identical names.
Sticky inflation and oil price surge dims hopes for interest rate cuts
Wednesday 18 October 2023 12:29 , Daniel O'Boyle
Fears that interest rates will have to “stay higher for longer” were stoked again today as the official rate of inflation unexpectedly stayed stuck at 6.7% and oil prices surged on the latest tragedy in Gaza.
Higher fuel and hotel prices kept the Consumer Prices Index unchanged in September, confounding City forecasts of a further small reduction on its long journey back towards the 2% target.
Although the CPI is expected to fall sharply next month following a big drop in the household energy bill cap there are also growing concerns about the impact of a major regional conflict in the Middle East. Some analysts fear oil could top $100 a barrel with clear implications for fuel prices and other costs.
Businesses that have held off now raising prices
Wednesday 18 October 2023 11:33 , Daniel O'Boyle
Danni Hewson, AJ Bell head of financial analysis, said the Government's inflation pledge could still pose a major challenge as there are further factors that keep pushing prices up.
“September’s stickiness rather ruins the narrative. UK inflation is not making a slow but sustained backtrack, it’s got trapped between the push and pull of prices at the pump and those on supermarket shelves.
“For households the current situation probably feels a bit like being given a bonus then having it all taxed away. Anyone who’s had to fill up their vehicle in the last few weeks can be forgiven for uttering a few expletives as the numbers kept climbing up, whilst those who’ve stocked up on milk, eggs and cheese should have had a more pleasant experience.
“Price volatility happens all the time but at the moment it’s raising big questions about whether the government will meet its target of halving inflation by the end of the year and, more importantly, how it might impact Bank of England policymakers ahead of their next interest rate decision.
“There are no easy answers here. On the one hand we know the impact of energy price hikes should finally wash through next month, but the question is how much of that cooling affect will be tempered by continued global uncertainty which is pushing up the price of oil.
“And with wage growth now outstripping inflation people might feel they’ve got a bit more cash to splash on a night out at the theatre or a night in a hotel – a decision which could give the green light for these sectors to raise prices once again.
“Because there is a lag, some businesses held off on raising prices and are now finding they have no choice but to do so, especially if customers keep on coming.
Sunak 'on course' to meet inflation target
Wednesday 18 October 2023 11:07 , Daniel O'Boyle
Rishi Sunak is still on course to fulfill his promise of halving inflation by the end of the year, though it is likely to be a close call, Panmure Gordon economist Simon French says.
Market snapshot with FTSE down again
Wednesday 18 October 2023 11:03 , Daniel O'Boyle
The FTSE 100 is lower again after briefly rebounding, with AstraZeneca the top faller.
Scottish Mortgage under pressure in FTSE 100, Marshalls rallies
Wednesday 18 October 2023 10:30 , Graeme Evans
Pressure on Nvidia shares after the Biden administration unveiled new curbs on China chip exports left its mark on London-listed Scottish Mortgage today.
Nvidia accounts for 5.3% of the popular Baillie Gifford investment trust, which first took a stake in the high-flying semiconductor firm back in 2016.
Wall Street-listed Nvidia lost 5% of its value last night as it said the restrictions will impact the sale of two artificial intelligence chips tailored for the China market.
Despite the drop, Nvidia shares are still more than 200% higher this year as excitement for generative AI creates buoyant trading conditions.
Scottish Mortgage, whose other investments include Tesla, Moderna and Amazon.com, initially fell 2% before settling 5.5p lower at 672.3p. Shares had topped 1400p prior to tech valuations being squeezed by rising interest rates.
Its China holdings include ByteDance, Tencent and online marketplace Meituan, with today’s figures from Beijing showing GDP growth of 4.9% in the third quarter offering some cheer.China’s better-than-expected performance helped underpin the wider FTSE 100 index, which recovered from a weak start to stand 8.69 points lower at 7666.52.
The FTSE 250 index fell 0.7% or 130.81 points to 17,558.65, with Wizz Air down 57p to 1639p after Citigroup gave the low-cost airline a “sell” recommendation and slashed its price target to 1400p.
Paving supplier Marshalls topped the leaderboard, up 13.6p to 211.6p as it recouped some of the past month’s 25% slide. Alongside a reassuring trading update, it said actions to rightsize the business were complete.
Sheds giant Segro eyes rental growth
Wednesday 18 October 2023 09:51 , Joanna Hodgson
Warehouses landlord Segro said it is on track for a “strong year” of rent roll growth as demand for space looks solid.
The company, which as at June 30 owned or managed 110 million square feet of space valued at £21 billion, said growth will also be aided by active asset management of properties.
In the first nine months it signed £58 million of new headline rent, which was down from £76 million in the same period in 2022.
Chief executive David Sleath said: “Occupier market conditions remain supportive with demand in line with longer-term trends and supply constrained in our chosen sub-markets. This is resulting in continued rental growth.”
The boss added that Segro has made good progress with disposals in recent months, “although the overall volume of investment market transactions remains subdued due to the evolving macro-economic environment”.
Digital consultancy Kin + Carta agrees £203m takeover
Wednesday 18 October 2023 09:23 , Daniel O'Boyle
Digital consultancy Kin + Carta is to become the latest quoted company to depart the London public markets, having agreed a £203 million private equity takeover.
Private equity group Apax will pay 110p per share of Kin + Carta.
The Kings Cross firm traces its origins to printing company St Ives, which acquired a number of consultancies in the 2010s and sold off its printing arm in 2018. It has worked on projects including a marketing campaign for Heathrow Airport and building Cazoo’s web platform.
Shares in the firm tumbled this year as earnings fell short of expectations. While today’s offer price is a 41% premium on Kin + Carta’s closing share price yesterday, it is half of the value of its shares to start the year.
Market snapshot as FSTE opens lower
Wednesday 18 October 2023 08:45 , Daniel O'Boyle
The FTSE 100 fell by more than expected this morning, after the overnight oil price rise and this morning's stickier-than-expected inflation figures.
Take a look at our full market snapshot:
Barratt drops in weaker FTSE 100, Whitbread up 4%
Wednesday 18 October 2023 08:43 , Graeme Evans
The FTSE 100 index is down by a bigger-than-expected 0.5% or 38.70 points to 7636.51, with Barratt Developments the leading faller after its latest trading update.
The UK’s biggest housebuilder fell 2% or 8p to 415.6p, alongside declines of 1.5% for Rolls-Royce, Smith & Nephew and copper miner Antofagasta.
Nvidia backer Scottish Mortgage Investment Trust lost 11.65p at 666.15p as Wall Street tech names struggled following the Biden administration’s move to curb chip exports to China.
Whitbread led the FTSE 100 risers board, up 4% or 123p to 3446p after the Premier Inn owner impressed with its half-year results. Retail stocks also fared well, with JD Sports Fashion up 2% and Next also higher.
The FTSE 250 index dropped 0.8% or 139.36 points to 17,550.10, with Wizz Air the biggest faller after Citigroup gave the low-cost airline a “sell ” recommendation and slashed its price target to 1400p. Shares slumped 62.5p to 1633.5p.
However, pavings supplier Marshalls rallied 13.6p to 211.6p thanks to a reassuring trading update.
Just Eat shares jump on earnings updgrade
Wednesday 18 October 2023 08:34 , Simon Hunt
Shares in Just Eat rose 6.4% to 1,105p this morning after the food delivery service upped its earnings guidance for the year.
The firm said its Adjusted EBITDA was set to rise to approximately €310 million in 2023, up from a previous forecast of €275 million.
Gross transaction value, a measure of the size of orders, rose 5% in the UK but slipped back more than 10% in North America. The company continues to plan to sell its US delivery business GrubHub.
CEO Jitse Groen said he saw "particular strong momentum in Northern Europe and the UK and Ireland segments.
"Within the UK and Ireland we continue to invest significantly whilst at the same time increasing profitability."
Whitbread to return £300 million to investors and expand Premier Inn chain as profit jumps
Wednesday 18 October 2023 07:59 , Michael Hunter
Whitbread, the owner of the Premier Inn budget hotels, is to return £300 million to investors and boost the number of rooms in the chain after profit rose 44%.
The company reported half-year profit before tax of £391 million, up from £272 million.
It will buy back shares worth £300 million from October. It also upped its dividend by 40% to 34.1p.
Inflation figures confirm pay sets pension triple lock
Wednesday 18 October 2023 07:34 , Daniel O'Boyle
Today’s inflation release confirms that state pensions are set to increase in line with earnings under the “triple lock”.
Under the triple lock system, pensions rise in pace with inflation, wage growth or by 2.5%, whichever is the highest. After July pay growth came in at record highs, it was all but certain to be used as the benchmark, but today’s inflation reading confirms that.
Stephen Lowe, group communications director at retirement specialist Just Group, said: “All eyes have been on today’s inflation figure to see if earnings or inflation will be the determining factor for uprating the State Pension via the triple lock next year.
“The winner is earnings - the days feel long gone when the third element of the triple lock, a standard 2.5% rise, was a serious consideration.”
Lowe noted that the Government could consider suspending the triple lock, but that it “won’t be an easy choice”.
Brent Crude at two week high, gold price higher
Wednesday 18 October 2023 07:31 , Graeme Evans
Brent Crude is trading more than 2% higher at $91.76 a barrel amid growing concern over the impact of the Middle East conflict on the outlook for global oil supplies.
Figures showing a bigger-than-expected drop in weekly US oil inventories added to the pressure to leave Brent Crude at its highest level in two weeks.
Investors have alo moved into safe haven assets, with gold up 0.8% to a one month high of $1938 an ounce this morning.
Barratt reservation levels drop as "difficult" conditions persist
Wednesday 18 October 2023 07:27 , Joanna Bourke
A “uncertain” outlook in the housing market is set to persist, building giant Barratt Developments warned as it reported a fall in reservation numbers and in the value of its forward order book.
David Thomas, chief executive of Barratt which is Britain’s largest housebuilder, said: “The trading environment remains difficult, with potential homebuyers still facing mortgage challenges.”
Between July 1 and October 8 the FTSE 100 company saw net private reservations (excluding joint venture sites) per average week of 169. That was down from 188.
Forward sales, including through joint ventures, stood at £2.36 billion (9221 homes) at the period end, compared with £3.6 billion (13,314 homes) a year earlier.
Much of the industry has seen demand dented this year as would-be buyers are squeezed by much higher mortgage costs and interest rates, and after the withdrawal of the Help to Buy scheme made affordability even harder for many first time purchasers.
China economy beats hopes, Asia markets lower
Wednesday 18 October 2023 07:19 , Graeme Evans
China’s better-than-expected GDP figures today failed to prevent selling pressure on Asia markets, with the Shanghai Composite down 0.7% and the Hang Seng index in the red.
On the day world leaders gathered in Beijing for the start of the Belt and Road Initiative summit, China revealed that its economy grew by 4.9% year-on-year in the third quarter.
This was better than market forecasts of 4.4% and follows growth of 6.3% in the previous quarter. China’s target for this year is annual growth in the region of 5%.
Separate figures showed China’s retail sales rose by a faster-than-expected 5.5% in September, having posted a rate of 4.6% the previous month. Industrial production was unchanged at 4.5%.
The downbeat performance for Asia markets mirrored Wall Street’s showing after the Nasdaq Composite and S&P 500 finished marginally lower.
The FTSE 100 index outperformed yesterday by posting a gain of 0.6% or 44.58 points to 7675.25, with CMC Markets expecting a further rise of 10 points this morning.
Inflation stuck at 6.7%
Wednesday 18 October 2023 07:03 , Daniel O'Boyle
UK inflation remained at 6.7% in September, official ONS figures show.
Inflation had been expected to dip to 6.6%.
Core inflation, which strips out food and energy prices, ticked down slightly to 6.1%.
The continued stickiness of inflation suggests the Government may still struggle to meet Rishi Sunak’s target of halving the rate of price rises by the year’s end.
ONS Chief Economist Grant Fitzner said:⯓After last month’s fall, annual inflation was unchanged in September. Food and non-alcoholic drinks prices eased again across a range of items with the cost of household appliances and airfares also falling this month.
“These were offset by rising prices for motor fuels and the cost of hotel stays.
“The annual rate of core inflation has slowed again this month, driven by a slowdown in the cost of many goods though services prices did rise a little this month.”
Recap: Yesterday's top stories
Tuesday 17 October 2023 23:42 , Simon Hunt
Good morning. Here's a summary of our top headlines from yesterday:
Vacancies fall below one million as economy slows while business survey shows job hiring in London weakened over the summer
Boardroom diversity takes a hit in tough times with only 3 women - and none from an ethnic minority background - among the last 20 CEO appointments by top British companies
Housebuilder Bellway warns of big fall in completions as mortgage rises bite
Job cuts at F1 Manager maker Frontier Developments as it prepares for big loss
Late night hospitality operator Revolution Bars sees like for like sales down 8% as drinkers cut back on spending, particularly Fridays
Jupiter sees net outflows of £1 billion in “challenging” market
And...why the founder of Europe's biggest tech conference apologised over his Israel comments
