Yahoo Finance FTSE 100 Live: London blue-chips close higher despite China deflation, Flutter and Hiscox in results-day falls
European markets have risen despite figures showing China in deflation territory.
The 0.3% year-on-year decline in consumer prices for July comes a day after poor trade figures, when exports and imports both declined by double-digit percentages.
Today’s corporate results include a profitable half year for Paddy Power owner Flutter Entertainment after it benefited from strong growth at its US-based FanDuel sports betting business. Bellway and travel business TUI have also posted updates.
FTSE 100 Live Wednesday
Shares higher despite China deflation
FanDuel owner Flutter back in profit
TUI reveals £21m wildfire cost
End-of-day market snapshot
16:56 , Daniel O'Boyle
Take a look at all the key market data as trading in London closes.
FTSE 100 closes up 0.8%
16:40 , Daniel O'Boyle
The FTSE 100 closed up 0.8% at 7,587 today, despite China reporting deflation this morning.
BP, IHG and Glencore were among the top risers, while Hiscox and Flutter - which both reported results today - led the fallers.
Brokers hope for ‘price war’ as UK’s biggest mortgage lender Halifax latest to cut interest rates
15:59 , Daniel O'Boyle
The UK’s biggest mortgage lender Halifax has become the latest to cut its mortgage rates, in yet another sign that prices are declining again after rising to 15-year highs.
Halifax will bring in new lower rates from Friday, following a wave of other lenders including HSBC, TSB and Nationwide lowering rates earlier this week. For HSBC, the price cut had been the second in just two weeks.
The decline in mortgage rates comes as the Bank of England raised its base rate to 5.25%. While the Bank Rate has a large influence on mortgage rates, banks usually set the price of a fixed-rate mortgage based on City expectations of the rate over the length of the fix, rather than setting it based on the rate at a given moment, and trade financial instruments based on those expected future rates to hedge against the risk that they are wrong.
This means that mortgage rates falling even as the Bank Rate rises is not necessarily unusual if rates had previously been expected to rise to exceptionally high levels.
Brits are poorer than Americans because we spend more on worse homes, think tank says
14:51 , Daniel O'Boyle
Brits are spending more than Americans for smaller homes and it’s making those in the UK worse off than their peers across the Atlantic, influential think tank the Social Market Foundation claims.
In a new report looking at the difference in wealth between the UK and US, the SMF noted that consumption in the US is around 30% higher than in the UK after cost-of-living differences between the countries are accounted for. Much of this difference is in healthcare and transportation, two areas where the SMF said it was not clear whether America’s greater consumption is actually leading to better outcomes.
However, it was a different story for housing.
“The gap in housing is a more direct reflection of dysfunction in the UK housing market,” the SMF said.
E.On reports rise in UK sales and profit as boss urges action on fossil fuels
14:40 , Daniel O'Boyle
Energy giant E.On has reported an eight billion euro (£6.9 billion) increase in its UK sales over the last six months.
The German company said it plans to invest billions across Europe as it revealed a 1% drop in sales there to around 52.4 billion euros (£44.8 billion) over the half year.
But sales in the UK rose at breakneck speed, hitting a little under 21 billion euros (£18.1 billion), up from 12.8 billion (£11 billion) a year earlier, the business said.
Dramatic new roof garden opens at Battersea power station
13:38 , Daniel O'Boyle
One of London’s most dramatic roof gardens has opened next to the chimneys of Battersea Power Station.
The 29,000 sq ft gardens are available to residents of three new apartment buildings that have gone up next to the Grade II* former generator as part of a £9 billion regeneration but are not open to the general public.
The gardens with 29,000 plants and 55 trees sit on the 16th floor of a Foster + Partners designed block with 232 homes and a 164 room hotel.
They were designed by James Corner of Field Operations, which was also behind the New York High Line linear park.
Union predicts ‘severe disruption’ at Gatwick as August strikes announced
13:00 , Daniel O'Boyle
Unite has announced strikes by ground handlers and passenger assistance workers at Gatwick Airport later this month in a row over pay.
The union claims the industrial action will cause “severe disruption”.
The strikes will involve more than 230 workers.
Unite members working for ground handling company Red Handling will walk out for four days from August 18, and a further four days from August 25, which includes the August bank holiday weekend.
Watchdog begins probe into number of customers ‘debanked’ by big banks
12:03 , Daniel O'Boyle
The UK’s financial watchdog is set to find out how many customers have been “debanked” by the UK’s largest banks as part of a probe into account closures and freedom of expression.
The move by the Financial Conduct Authority (FCA) follows the scandal sparked by politician Nigel Farage after he revealed that Coutts decided to shut down his bank account.
It resulted in the Government bringing in new rules to clamp down on unexplained bank closures, and culminated in the resignations of the bosses of Coutts and its owner, NatWest Group.
City Comment: Law firm Kingsley Napley is turning the lights off on Fridays. Will it catch on?
11:48 , Daniel O'Boyle
First came “dress down Friday” when suits and brogues were replaced by chinos and loafers in a nod to the start of the weekend.
Now, after the pandemic, are we in the era of “lights-out Friday” when swathes of offices in the City will simply go dark?
Renowned City law firm Kingsley Napley, which occupies six floors at its office on Bonhill Street, has decided it will flick the light switches to “off” in much of its space on Fridays.
According to the website Legal Cheek the firm will simply shut down two-and-a-half floors on the fifth working day of the week. The policy will result in annual savings of around £100,000 in energy, cleaning, and maintenance costs, as well as ticking an ESG carbon footprint box.
Bellway shares slip as builder reveals hit from UK housing slowdown
10:30 , Joanna Bourke
Bellway today became the latest major builder to show how the UK housing slowdown and loss of Help to Buy is hurting, revealing a reservation levels slump and cautioning legal completions are set to decrease “materially” this year.
The FTSE 250 company, one of Britain’s largest housebuilders, said weekly reservation rates tumbled 28.4% in the year to July 31.
It added that the value of its forward order book stood at a lower, “yet still sizeable” £1.2 billion at the year end, down from £2.1 billion 12 months earlier.
Like rivals it has seen soaring mortgage rates pile pressure on would-be buyers already grappling with the cost of living crisis. In addition the Help to Buy scheme ending has also hit the industry.
The shares slipped 16p, or 0.72%, to 2200p.
Read more HERE
European shares rally, Hill & Smith up 10% in FTSE 250
10:20 , Graeme Evans
More worrying statistics from China failed to keep traders on the sidelines today as heavyweights BP and Barclays drove the FTSE 100 index higher.
London’s bigger-than-expected rebound of 0.9% or 64.77 points to 7592.19 came despite China’s slip into deflation as consumer and factory gate prices fell simultaneously in July for the first time since 2020.
A day earlier the country’s statistics bureau revealed double-digit percentage drops in both exports and imports. Hargreaves Lansdown head of equity funds Steve Clayton said: “It is indicative of a significant slowdown in the Chinese economy, which is beset by high levels of indebtedness.”
Despite the slowing of the world’s second largest economy, the focus in Europe was elsewhere after Italy watered down its windfall tax plans for banks. Italy’s FTSE MIB index jumped 1.8% to put back yesterday’s losses, while benchmarks in Frankfurt and Paris were up more than 1%.
In London, Barclays shares rallied 2.9p at 149.9p and Anglo American put back 36p to 2192.5p after the mining sector was hit by China-led weakness yesterday.
BP also rose 10.5p to 490.5p and Shell by a more modest 26p to 2398p after supply-side concerns kept the price of Brent Crude above $86 a barrel.
Elsewhere in the FTSE 100, the favourable reaction to results by Holiday Inn operator IHG rolled into a second session with a further gain of 3% or 174p to 5964p.
They were followed by bottling company Coca-Cola HBC, which rose 52p to 2312p on upgraded revenues guidance and a beat on half-year earnings.
Shares in specialist insurer Hiscox found the going tougher, even though profits of $264.8 million (£207.6 million) were ten times higher after the previous year’s surge in claims.
The Bermuda-based company said it delivered growth in every business unit, but with the profit surplus still short of City estimates the shares fell 6% or 71p to 1042p.
The UK-focused FTSE 250 index rose 0.7% or 142.04 points to 18,983.58, with road safety barriers specialist Hill & Smith up 10% or 160p to 1730p after raising 2023 guidance alongside a 20% jump in operating profit at a half-year record of £62.5 million.
Colefax expects trading conditions to become more challenging
10:13 , Joanna Bourke
Results from AIM-listed fabrics and interior decorating business Colefax showed how the weaker homes market could have a knock on impact to other sectors.
Chief executive David Green cautioned: “The performance of the group lags activity in the high-end housing market and we do expect trading conditions to become progressively more challenging as steep interest rate increases start to have an impact in the US and the UK.” If moves are delayed that could slow down decorating decisions.
Sales in the year to April improved 3% to £104.8 million but pre-tax profits fell 21% to £8.5 million due to a lower contribution from the decorating division and compared with a bumper performance during the pandemic.
22% of UK employees report facing discrimination in the workplace – survey
10:06 , Daniel O'Boyle
More than a fifth of UK employees said they have faced discrimination in the workplace because of their identity but the figure was lower than in the US and other European countries, according to new research.
People from black and Asian backgrounds, as well as those belonging to the LGBT+ community were more likely to have experienced such issues, the survey suggested.
Some 4,973 people from the US, UK, France, Sweden, Germany and the Netherlands were surveyed online in May and June this year by data and market research company Savanta.
TP ICAP cuts broker headcount in bid to free up cash
10:05 , Simon Hunt
City broker TP ICAP today revealed it had cut nearly 180 jobs as it sought to free up cash to pay down debts.
The Bishopsgate-based business said it had cut its broker headcount by 7% as part of cost management measures and “a greater focus on contribution.”
CEO Nicolas Breteau said he will “continue to assess opportunities to free up cash to further invest in the business [and] pay down more debt.”
Revenue for the first half of the year rose 4.8% to £1.1 billion. Pre-tax profits were up 26.4% to £91 million.
Market snapshot
09:38 , Daniel O'Boyle
Take a look at the key market data as miners led the FTSE 100’’s rise this morning.
FTSE 100 higher as miners recover, Flutter shares down 5%
08:36 , Graeme Evans
London shares are on the front foot, with the FTSE 100 index up 0.6% or 46.54 points to 7573.96 and the FTSE 250 index 0.7% or 138.32 points higher at 18,979.86.
Blue-chip risers included bottling business Coca-Cola HBC, which is up 3% or 58p to 2318p after its half-year results. Gambling group Flutter Entertainment moved in the opposite direction despite its return to profit, falling 5% or 725p to 14,180p.
Other big moves came from the mining sector as Glencore reversed yesterday’s decline by adding 9.75p to 454.35p and Anglo American rose 39.5p to 2196p.
Interdealer broker TP ICAP leads the FTSE 250, jumping 14% or 21.5p to 176p following half-year results.
Hiscox profits rocket with claims coming in as modelled
08:15 , Daniel O'Boyle
Profits rocketed at Lloyd’s of London insurer Hiscox as its losses to claims came in within its models.
Profit in the first half came to $264.8m, more than ten times the amount made a year earlier when Russia’s invasion of Ukraine led to a surge in claims. It said its estimate of the net loss from the war remains unchanged.
“Large and attritional losses across the group are within our expectations,” Hiscox said.
"Our business has delivered growth in revenues and profits in every business unit, as our proactive and disciplined underwriting and favourable market conditions come together,” CEO Aki Hussain said. “Our portfolio of businesses, our people and innovation to meet the changing needs of our customers position us well to continue delivering high-quality growth and earnings.”
Hussain added that the business had made some “disciplined” decisions to turn down growth opportunities, including exiting some UK opportunities “outside of our risk appetite”, in order to maintain the “quality” of the company’s earnings.
Wildfire evacuations cost Tui €25 million but it expects a strong summer and returns to quarterly profit
08:02 , Michael Hunter
Tui is back in quarterly profit and expects a strong summer getaway season, after almost 6 million people went on holiday with the tour operator in the third quarter.
It also said it was watching the wildfires in southern Europe, having evacuated 8,000 guests from the parts of Rhodes hit by wildfires, although 80% of its customers remained unaffected. There were 12 “repatriation flights”.
It added: “The financial impact of the wildfires in recent weeks covering cancellations & lost margin, customer compensation as well as repatriation flights & welfare costs has added [around] €25m (£21 million) of cost to our full year 2023 results.”
Group revenue rose by a fifth to €5.3 billion and profit rose to €169.4 million in the third quarter, from a loss of €27 million in the same period a year ago.
It said summer bookings were close to pre-pandemic levels, at about 95% of the level before Covid struck, saying:
“We confirm our expectations for a strong Summer. Bookings total 12.5m for the season, a 6% increase versus Summer 2022 and an increase of 4.3m guests since our Half-Year Financial Report H1 2023.”
Coca-Cola HBC profits energised by coffee sales
07:50 , Michael Hunter
Profits at Coca-Cola HBC, the Swiss-based bottler of the world-famous soft drink, fizzed higher for the first half of the year, given a pick-me-up by the timing of the way it accounted for its departure from Russian markets.
The FTSE 100 company said today that its reported net profit “more than doubled” to almost €386 million (£333 million) “as we cycled the impairment charges relating to our operations in Russia taken in 2022”.
Coca-Cola, which owns around a fifth of the company that bottles its famous brands across much of Europe, pulled its main branded drinks out of Russia after Vladimir Putin’s invasion of Ukraine.
HBC said its comparable net profit was €388.9 million, up almost 23%. Sales of sparkling and energy drinks and coffee rose, led by a 22% rise in coffee, offset a drop of over 11% in still drinks volumes, with the decline led by water.
Flutter sets timeline for US listing as it bounces back to profit
07:26 , Daniel O'Boyle
Paddy Power and Sky Bet owner Flutter’s American arm pushed it back into profit for the first half of the year, as it said it plans to list in the US at the end of this year or the start of next.
The group said it had reached an “inflection point” with US betting business FanDuel, bought for $158 million in 2018 and now dominating the recently legalised American betting market. After years of spending hundreds of millions on ads and bonuses, the division made a £49 million profit in the first half.
Flutter is set to list its shares in the US alongside London. The business said this will happen in “late Q4 2023 or early Q1 2024”.
In the UK and Ireland, profit was up 24% to £396 million thanks to a record number of customers, and a record level of conversion from sports betting to casino games.
CEO Peter Jackson said: Peter Jackson said: “The first half of 2023 marks a pivotal moment for the group, with our US business now at a profitability inflection point, helping transform the earnings profile of the group and significantly enhance our financial flexibility.”
Amazon in talks to be anchor investor in Arm: reports
07:25 , Simon Hunt
British chip designer Arm could soon see Amazon become one of its biggest shareholders after its bumper IPO.
The tech giant is in talks to become a lead investor ahead of the listing, according to the Reuters news agency.
Cambridge-based Arm, which is owned by SoftBank, is seeking to raise as much as $10 billion and could join the Nasdaq stock exchange as soon as next month.
China deflation and US banks downgraded but FTSE 100 seen higher
07:22 , Graeme Evans
The focus on China’s economy is continuing after it emerged consumer prices (CPI) dropped 0.3% in July, the first decrease since February 2021.
China’s move into deflation territory comes a day after trade figures showed double-digit percentage declines in both exports and imports.
It also emerged today that producer prices (PPI) fell 4.4% year-on-year, more than the 4.1% forecast and the tenth month in a row the figure has been negative.
It is the first time since 2020 that both the CPI and the PPI measures have fallen at the same time, increrasing pressure for China’s policymakers to announce furher stimulus measures.
Asia markets were marginally in the red following the China releases, with the Hang Seng index in Hong Kong down another 0.15% after a big fall yesterday.
US indices were lower yesterday after credit ratings agency Moody’s downgraded ten small and mid-sized banks and signalled it may do so for six larger institutions.
The Dow Jones Industrial Average and the S&P 500 index rallied towards the end of the session but still finished down 0.4%, while the Nasdaq was 0.8% lower.
CMC Markets expects the FTSE 100 index to open 32 points higher at 7559, having fallen 0.4% by the end of yesterday’s session.
Morning refresh: What you need to know to start the day
Tuesday 8 August 2023 21:18 , Simon Hunt
Good morning from the City desk of the Evening Standard.
Are exorbitant London property prices damaging the City’s economy? That seemed to be the view of the billionaire IWG CEO Mark Dixon, who told the Standard a lack of affordable housing in central London coupled with steep commuting costs was putting people off working in the city. Dixon said other major global cities had realised this was a problem, but London had some catching up to do -- in the mean time he is opening most new London office space in the suburbs to keep pace with new working patterns.
Overnight, bank shares fell after ratings agency Moody’s downgraded a number of small and medium-sized US banks and warned it was putting bigger ones under review amid squeezed profitability and the prospect of a 2024 recession.
Here’s look at some of our other headlines from yesterday:
Hotels giant IHG cheered a London hotels boom in second quarter with revenue per available room up 22% in second quarter
Pawnbroker H&T plans to open more stores as demand for pawnbroking services rises
Fund management giant ABRDN sees £4 billion in outflows as investors move from stocks to bonds
Glencore says commodities markets “normalising” after shock of the Ukraine war
This morning we’re expecting results from betting firm Flutter, travel company Tui and bottling business Coca Cola HBC.
In the afternoon we’ll get data from the US on the balance of trade.
