FTSE 100 Live: FTSE closes up 1%; Ping An finds few friends on HSBC split vote; strong US jobs again

·21-min read
 (Evening Standard)
(Evening Standard)

The FTSE 100 index has recovered some lost ground after losing more than 1% for the second time in three days yesterday.

British Airways owner IAG raised its guidance after strong results, while InterContinental Hotels Group said revenue so far this year had exceeded 2019 levels, though it also announced that its CEO will step down.

Elsewhere, there will be eyes on HSBC’s AGM in Birmingham, as a group of rebel shareholders have tabled a resolution that would require it to plan for a potential split from its huge Asian arm.

FTSE 100 Live Friday

  • British Airways owner IAG lifts profit guidance

  • Pound above $1.26 amid more dollar pressure

  • Apple beats forecasts after strong iPhone sales

FTSE closes 1% higher.

Friday 5 May 2023 16:38 , Daniel O'Boyle

The FTSE 100 closed 1% higher today at 7,778, but remained down for the week.

Shares gained close to 0.7% soon after opening, and although much of thise gains were quickly erased, the index picked up again late in the day.

BBarclays and BP were the biggest winners, up more than 3% each.

City firms see the first signs of a rebound in dealmaking

Friday 5 May 2023 16:23 , Daniel O'Boyle

Numis, the ‘mini-investment bank’ set to be bought by Deutsche Bank, says there are “emerging indications” that market activity will pick up over next six months, after its profits fell by 55% in the past half-year.

Revenue slid by 14%, which the City firm put down to “subdued” market activity. However, the company’s advisory arm performed much better, with revenue up 40%.

While performance in recent months has been disappointing, Numis expects a turnaround. After warning last month that there was “unlikely to be a meaningful change in market conditions”, the firm is now starting to see green shoots.

Read more here

Ping An finds few friends on HSBC split vote

Friday 5 May 2023 15:56 , Daniel O'Boyle

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 its proposal for a strategy review.

Ping An has repeatedly called for HSBC’s Asian arm to be spun off, but the company’s management has argued that this would not represent the best value for shareholders. Both the insurance business and HSBC chair Mark Tucker lobbied shareholders to vote with them ahead of today’s meeting in Birmingham.

Read more here

Only 20% of HSBC shareholders backed activists’ strategy vote

Friday 5 May 2023 15:37 , Daniel O'Boyle

The vast majority of HSBC shareholders sided with its board in a vote over the banking giant’s strategy.

However, voters representing 20.25% of shares rejected its director pay policy.

Ping An, the Asian insurance group that has pushed for HSBC to be split up, represented around 18-19% of votes cast.

Big start for US stocks, little sign of rate-rise fears

Friday 5 May 2023 15:11 , Daniel O'Boyle

US stocks are off to a strong start, as the latest jobs data has made a recession appear less likely.

The S&P 500 is up 1.4% to 4119, while the Dow Jones is also up 1.4% to 33604. There is little sign of a concern about interest rate rises either, with the Nasdaq up 1.5% to 12144.

Among the top gainers are ticketing service Live Nation and Wealth manager Charles Schwab,, alongside a number of regional banks that were hit by massive selling yesterday..

Asos expected to post loss as investors look for signs of growth

Friday 5 May 2023 14:57 , Daniel O'Boyle

Online fashion giant Asos is expected to post another half-year loss and shareholders will hope for signs of improving demand from cash-strapped shoppers.

It is among fast-fashion retailers to have become heavily pressurised over the past year by a brutal combination of rocketing costs, supply chain disruption and weaker consumer spending.

Read more here

More workers at Amazon to be balloted over possible industrial action

Friday 5 May 2023 14:35 , Daniel O'Boyle

More workers at online giant Amazon are to be balloted for strikes over pay.

The GMB said its members at Rugeley, in Staffordshire, and Mansfield, Nottinghamshire, will vote in the next few weeks on whether to launch a campaign of industrial action.

The GMB has already held a series of strikes at Amazon’s site in Coventry, which the union said is having a “domino effect” in other areas.

Read more here

£1bn expected to be withdrawn from ATMs amid bank holiday celebrations

Friday 5 May 2023 14:15 , Daniel O'Boyle

More than £1 billion could be withdrawn from the UK’s ATMs, as the King’s coronation is celebrated over the bank holiday weekend, according to an ATM network.

The forecast, covering the period from Friday to Monday, was made by ATM network Link.

Read more here

Pound recedes on US job data

Friday 5 May 2023 13:42 , Daniel O'Boyle

The pound fell back below $1.26 as the dollar gained ground on the back of today’s US jobs data.

Sterling had risen above $1.26 and towards the highest level in a year, after the Federal Reserve signalled it planned to pause its rate hikes.

But today’s data showing little signs of a labour slowdown raised questions about a pause, restoring some of the dollar’s strength.

US jobs hotter than expected again

Friday 5 May 2023 13:34 , Daniel O'Boyle

The US added 253,000 non-farm jobs in April, with the figure coming in higher than economists predicted yet again.

The hotter-than-expected market may raise some questions about the Federal Reserve’s plans to pause its current cycle of interest rate hikes.

Jobs data from the Bureau of Labor Statistics has repeatedly confounded economists, who have expected a much sharper slowdown than the one that has been seen.

Seema Shah, Chief Global Strategist at Principal Asset Management said:

“How can the market be speculating about a potential Fed cut as early as June when the unemployment rate has dropped to 3.4% and average hourly earnings growth is picking up? As long as the labour market continues to run extraordinarily hot, the important core services ex housing segment of the CPI number cannot decelerate to a pace the Fed can be comfortable with.

“The Fed’s dilemma of price stability versus financial stability continues to heat up. The economy is showing minimal signs of slowing even as the regional banking space faces significant stress. Markets have been hoping for slower economic data, in the hope that it will give the Fed space to cut rates. Today’s jobs report has delivered the exact opposite.”

HSBC breakup vote fails

Friday 5 May 2023 13:31 , Daniel O'Boyle

HSBC shareholders rejected a resolution from activist investors who wished to see the business broken up, according to indicitave voting.

Regional banks poised to lead Wall Street rebound

Friday 5 May 2023 13:08 , Daniel O'Boyle

Shares on Wall Street are expected to open higher, with regional banks leading the way after yesterday’s battering.

However, a surprise in the Bureau for Labor Statistics’ imminent jobs data could get in the way of a recovery.

The Dow Jones is set to open 0.5% higher at 33641, while the S&P 500 is expected to rise by 0.7% to 4103.. The Nasdaq is also set to rise by 0.7%, to 13128.

After its share price was cut in half yesterday, California-based lender PacWest is set for a big rebound, with shares up 18.9% premarket.

HSBC chair urges shareholders to reject breakup resolution

Friday 5 May 2023 12:59 , Daniel O'Boyle

HSBC chairman Mark Tucker used his speech at the bank’s AGM to tell shareholders to vote against the proposed resolution for a break-up of the bank. The break-up plans are led by minority shareholder Ping An, which wishes to see the lender’s Asian arm split off from its remaining business.

“Our current strategy is working,” Tucvker said. It is improving our performance and increasing your dividends. You should not put this at risk.

“We respect the views and opinions of our shareholders. But we would only ever pursue suggestions if they offered material net benefits for all our shareholders. It is our unanimous view that these resolutions do not do that.

“The Board has a clear responsibility to protect and grow shareholder value. And the best way to do that is to continue with our current strategy.”

Bookings to Dublin and Rome soar as Britons head abroad for coronation weekend

Friday 5 May 2023 12:28 , Daniel O'Boyle

Britons are looking to make use of the extra bank holiday for the King’s coronation and escape the UK for a weekend getaway, new figures suggest.

Accommodation search website Trivago said it has seen a doubling of UK bookings in Rome and nearly a doubling in Dublin over the coronation weekend, up 101% and 77% respectively.

Read more here

The Vurger Co. narrowly avoids collapse as new investors step in at ‘the eleventh hour’

Friday 5 May 2023 12:04 , Daniel O'Boyle

Vegan burger group The Vurger Co. has appointed administrators after “a painful few years of trading.”

The business started out in 2016 as a small stall in Tottenham, north London, and now has sites in Shoreditch, Brighton, and Manchester.

A fourth branch in Canary Wharf, which opened in 2019, has since closed.

Read more here

London first-time buyer monthly mortgage payments up £363 in a year

Friday 5 May 2023 11:51 , Daniel O'Boyle

The monthly cost of buying the smallest homes in London has soared by £363 in the last year, according to new figures.

Rightmove research found a typical mortagage repayment on a property in the capital with two bedrooms or fewer was £2,340 in April.

This is up from £1,977 a year ago — despite the average asking price on these homes, which the listing portal classifies as being targeted by first-time buyers — actually falling slightly in that time.

Read more here

‘Momentum is building’ for a ‘chunky' GDP upgrade

Friday 5 May 2023 11:31 , Daniel O'Boyle

Andrew Goodwin, chief UK economist at Oxford Economics, says signs this week pointed towards the Bank of England significantly upgrading its forecasts for the UK economy.

“The GDP data for Q2 is likely to be much softer than the business surveys imply because of the extra bank holiday for the King's coronation and the impact of ongoing industrial action,” he said. “But it's clear that underlying momentum is building, and the BoE is likely to make a chunky upgrade to its 2023 GDP forecast in next week's Monetary Policy Report.

He added, though, that this strengthening also meant an interest hike was now effectivley certain.

“If there was ever any doubt that the MPC would raise Bank Rate at next week's meeting, this week's UK data quickly dispelled it,” he said. “Further evidence of strengthening activity – particularly in consumer-facing sectors – and inflation persistence mean the MPC's criteria for raising interest rates have been unambiguously met.”

Royal Warrant holders vie for majestic sales growth

Friday 5 May 2023 11:01 , Joanna Hodgson

With the Coronation of King Charles III fast approaching one small group of companies will be watching events with particular interest and wondering what will follow: Royal Warrant holders.

They are the 800 companies and brands that supply goods or services to the Royal Household and are permitted to use the Royal Arms in connection with their business.

Such companies are part of a tradition that can be traced back to medieval times “when competition for Royal favour was intense and the Monarch had the pick of the country’s best tradespeople”, according to the Royal Warrant Holders Association’s website.

Read more here

TSB warns about scams on platforms such as Facebook, WhatsApp and Instagram

Friday 5 May 2023 10:43 , Daniel O'Boyle

TSB has issued a warning on the scale of social media scams taking place through services such as Facebook, WhatsApp and Instagram, as the bank says a significant proportion of the cases it sees have been coming through these platforms.

The bank said that its own internal data indicates scams that come through these Meta-owned companies account for around 80% of fraud cases within the three biggest fraud categories at TSB.

Read more here

Banks and commodity stocks higher as FTSE 100 rallies

Friday 5 May 2023 10:05 , Graeme Evans

A recovery for the FTSE 100 index has lifted spirits for London investors at the end of a turbulent week.

The improvement of 0.4% or 30.76 points to 7733.40 came after worries in the US regional banking sector triggered another session in the red for Wall Street on Thursday as the VIX index of volatility traded above 20 for the first time since March.

Tech giant Apple helped the mood after the closing bell, however, as it overcame supply chain disruption to beat expectations with a record March quarter performance for iPhone revenues.

Its resilience set the tone for a stronger session in Europe as heavyweights Adidas and British Airways owner IAG also pitched in with confidence-boosting updates.

A recovery for Brent Crude after losses nearing 9% earlier this week added to London’s momentum as BP shares rose 3% or 12.85p to 489.35p. Rio Tinto led a stronger mining sector with a gain of 71.5p to 4941.5p and there was also a much-needed boost for banking stocks as NatWest cheered 3.7p to 256.1p.

Others on the risers board included JD Sports Fashion, which improved a penny to 160.8p on the read-across from the consensus beating sales figures by sportswear giant Adidas.

The UK-focused FTSE 250 index climbed 66 points to 19,310.91 with risers including Aston Martin Lagonda after a gain of 2% or 5p to 222p.

Housebuilding declines at sharpest pace for almost three years

Friday 5 May 2023 10:04 , Daniel O'Boyle

UK housebuilding fell sharply in April, but overall construction still increased, according to the S&P Global / CIPS UK Construction PMI.

Total construction was up for the third straight month, as the Purchasing Managers’ Index hit 51.1, with anything over 50 representing growth. But the growth was entirely driven by the commercial sector, as housebuilding PMI fell to 43.0, the lowest figure since the heights of the Covid-19 pandemic ground most building projects to a halt.

“The return to growth for UK construction output appears worryingly lopsided as residential work decreased for the fifth successive month,” Tim Moore, economics director at S&P Global Market Intelligence said. “Extended delays on new housing starts were reported again in April, due to a considerable headwind from elevated mortgage rates and weak demand.”

City Comment: Forget the GDP hit and enjoy the Coronation fun

Friday 5 May 2023 09:53 , Jonathan Prynn

Landmark royal events like tomorrow’s Coronation are, economically speaking, a cross between an ngland World Cup final and a train strike.

While they certainly set off a sugar rush of spending on bunting, buns and beer, they are also massively disruptive to output, just like a total shutdown of the rail system. In fact a lot worse, as the impact of a walkout on the trains or Tubes is considerably softened these days by the working-from-home revolution.

Read more here

Numis begins to see green shoots

Friday 5 May 2023 09:32 , Daniel O'Boyle

Numis, the ‘mini-investment bank’ to be bought by Deutsche, says there are “emerging indications” that market activity will pick up over next six months, after its profits fell by 55% in the past half-year.

Revenue slid by 14%, which the City firm put down to “subdued” market activity. However, the company’s advisory arm performed much better, with revenue up 40%.

While performance in recent months has been disappointing, Numis expects a turnaround. After warning last month that there was “unlikely to be a meaningful change in market conditions”, the firm is now starting to see green shoots.

“We have started to see emerging indications that the second half may see relatively better conditions,” co-CEOs Alex Ham and Ross Mitchinson said.

FTSE 100 in recovery mode, Aston Martin shares up 3%

Friday 5 May 2023 08:55 , Graeme Evans

The FTSE 100 index is 0.6% or 48.76 points higher at 7751.40, with a broad range of stocks on the risers board.

Shares in British Airways owner IAG lifted 6.1p to 153.1p, with its upgraded guidance also boosting confidence in Rolls-Royce as the engines giant added 2.1p to 151.35p.

Banking stocks enjoyed a stronger session as Lloyds rose 0.8p to 46.1p and Barclays cheered 3.7p to 151.9p, while Anglo American and BP led a rebound for the commodities sector after their shares improved 49.5p to 2426.5p and 14.25p to 490.75p respectively.

The read-across from better-than-expected results by sportswear giant Adidas meant shares in JD Sports Fashion improved 2.4p to 162.25p.

The FTSE 250 index climbed 76.59 points to 19,321.50, with notable risers including Aston Martin Lagonda after a gain of 3% or 6.4p to 223.4p.

Pound nears one-year high

Friday 5 May 2023 08:25 , Daniel O'Boyle

The pound is close to its highest level against the dollar in more than a year, as the US currency continues to weaken after the Federal Reserve signaled it would pause rate rises.

A pound now buys $1.2621, just slightly below the highs it reached in late May of last year. A pound buys €1.1438.

International sales help Bentley profits approach record highs

Friday 5 May 2023 08:15 , Daniel O'Boyle

UK luxury car maker Bentley reported the second-best quarter in its 103-year history today, as strong sales abroad helped profit rise by 27% to €216 million.

Sales in the UK slipped by 2%, but Bentley - which made the state limousine that is likely to bring King Charles III around London over the Coronation weekend -  made up for this with 39% growth in the Americas and 66% growth in the Middle East.

Read more here

Aquazzurra steps into Bond Street

Friday 5 May 2023 08:11 , Daniel O'Boyle

Aquazzurra, the luxury shoe brand that has been worn by stars including Nicole Kidman, Rihanna and Dua Lipa, is stepping into Bond Street and joining a host of retailers opening new stores there in 2023.

The Florence-based company founded by Edgardo Osorio has agreed a 10-year lease for a 2,000 square feet store where it is set to trade over three floors at 26 New Bond Street. It will neighbour existing retailers Jimmy Choo and Balenciaga.

The deal comes at a busy time for 11-year-old Aquazzura, which in March launched its first bag collection. It runs a number of stores as well as being stocked at over 300 retailers in 58 countries and online.

Its new branch is set to open in June, and Anthony Selwyn who is co-head of prime global retail at Savills, acting on behalf of the landlord, a private Hong Kong investor, said: “This area of the street has seen significant recent activity, and is currently the most desirable location for luxury fashion apparel and accessory brands.”

Apple beats forecasts after strong iPhone sales

Friday 5 May 2023 08:00 , Graeme Evans

Apple’s second quarter results pleased Wall Street last night as the tech giant showed resilient trading in the face of supply chain pressures and slower consumer demand.

Revenues of $94.8 billion (£75.1 billion) for the three months to 1 April were down 3% on a year earlier , but better than expected after a record March quarter performance for iPhone sales.

In a sign of Apple’s confidence, it also announced an additional $90 billion (£71.3 billion) of share buybacks and is also raising its quarterly dividend for the 11th year in a row.

Shares were 2.5% higher in extended hours trading, having fallen earlier in the week.

Hargreaves Lansdown analyst Sophie Lund-Yates said: “Apple is one of the very few big tech companies that hasn’t announced sweeping job cuts, which is partly linked to the less bloated business model.

“The group’s impenetrable brand is also holding it in good stead, but the overarching theme of these numbers is that consumers are very much starting to pull back on buying bigger-ticket items.”

British Airways owner IAG lifts profit guidance as demand for leisure travel takes off

Friday 5 May 2023 07:33 , Michael Hunter

The owner of British Airways, IAG, has lifted its profit guidance for 2023 after the rebound in demand for leisure travel.

It said the summer peak season looked “encouraging” with “around 80%” of expected revenue for the second quarter already booked. Business travel is also coming back, it said, but at a slower pace.

The company, which also owns Iberia of Spain and Ireland’s Are Lingus, said it now expects annual profit to top the upper end of its previous guidance at €2.3 billion (£2 billion).

For the first quarter, it returned to an operating profit, of €9 million from a loss of €718 million in the same period a year ago.

Luis Gallego, IAG’s CEO said: “ We are seeing healthy forward bookings with leisure demand particularly strong while business travel continues to recover more slowly.

Lower fuel prices in the period also helped.

US market sell-off continues, FTSE 100 seen higher

Friday 5 May 2023 07:24 , Graeme Evans

Gold touched a record high of $2070 an ounce last night as traders reacted to the US banking turmoil and pressure on the dollar after this week’s Federal Reserve meeting.

The safe haven asset later fell back to stand at $2046 this morning, while Brent crude futures stood near to $73 a barrel after losses of around 9% so far this week.

Oil prices are under pressure as fears grow that this week’s latest rate rises by the Federal Reserve and European Central Bank will make a global recession more likely.

US markets endured another tough session after jobless claims came in higher than expected and regional banking stocks were hit by more heavy selling.

The Dow Jones Industrial Average finished down 0.9% and the S&P 500 index ended lower for the fourth session in a row with a decline of 0.7%. The VIX index of volatility closed above 20-mark for the first time since March, while the KBW Nasdaq Banks index dropped nearly 4% to its lowest point in over two years.

Apple helped the mood after the closing bell, with its shares up more than 2% in extended hours thanks to better-than-expected second quarter results.

The FTSE 100 index dropped 1% on Thursday but CMC Markets expects London’s top flight to open 34 points higher at 7736.

IHG boss Barr to check out

Friday 5 May 2023 07:20 , Daniel O'Boyle

InterContinental Hotels Group boss Keith Barr is to step down at the end of June so he can return to the US, the company revealed today.

Barr will be replaced by Elie Maalouf, who was previously head of IHG’s Americas arm.

"It has been a pleasure to work with Keith, and on behalf of the Board and our colleagues I want to thank him for his successful leadership of IHG and congratulate him on his remarkable contribution,” IHG chair Deanna Oppenheimer said.

It comes as the business also reported a 33% growth in revenue per available room for the first three months of 2023. Growth was strongest in Asia thanks to the easing of China’s covid-19 measures, but revenue per room was up by more than 15% in all regions.

Yesterday’s top stories

Friday 5 May 2023 07:06 , Daniel O'Boyle

Good morning. Here are some of yesterday’s top stories: