Yahoo Finance FTSE 100 Live: ‘Investors continue to take cautious stance towards UK’; shares fade late; City AM sale
The FTSE 100 has started with modest gains today, led by miners, after a strong finish to an otherwise-disappointing June.
That comes despite a tough start for the blue-chip index’s biggest stock, with AstraZeneca down more than 4%.
Markets will keenly await purchasing managers’ index data from the manufacturing sector for the UK and Europe, which will be released later this morning.
The S&P/CIPS manufacturing Purchasing Managers’ Index (PMI) came to 46.5 for June, compared to the flash figure of 46.2. That’s still well below the 50 mark that separates growth from decline.
City A.M. owners ‘open to a sale’ of London freesheet amid investment talks
Monday 3 July 2023 16:47 , Daniel O'Boyle
London freesheet City A.M. is up for sale, its owners confirmed today.
The owners of the business-focused free morning newspaper said they have been in discussions regarding further investment in the business, which has seen a drop in circulation as the Covid-19 pandemic continues to change working and commuting habits.
However, they added that, “whilst those discussions are continuing, City A.M. is now also open to a sale through its advisors FRP Advisory”.
Guinness triples production of zero-alcohol stout amid shifting consumer tastes
Monday 3 July 2023 16:03 , Daniel O'Boyle
Guinness will almost triple production of its zero-alcohol brand in response to a growing consumer taste for non-alcoholic drinks.
Owners Diageo has invested 25 million euro in a new facility at its St James’s Gate brewery in Dublin to meet a surge in demand for alcohol-free stout in the domestic and global markets.
The new production facility includes six processing vessels with a total capacity of 500,000 hectolitres – almost 90 million pints – and a two-storey building where the alcohol is removed through a cold filtration system to create Guinness 0.0.
City AM up for sale - report
Monday 3 July 2023 15:25 , Daniel O'Boyle
London freesheet City AM is up for sale, according to reports from the Telegraph.
The business-focused free morning newspaper is owned by two companies: the Blue Bull and Nashco.
The newspaper cut the number of days it is printed from five to four earlier this year.
Blue-chip shares fade in afternoon
Monday 3 July 2023 14:36 , Daniel O'Boyle
The FTSE 100’s early gains have been wiped out, with the blue-chip index now down slightly for the day.
Monzo phases out office water coolers and boiling water taps in net zero drive
Monday 3 July 2023 13:59 , Daniel O'Boyle
Digital bank Monzo ha moved to get rid of its office water coolers and boiling water taps, and offset emissions from business trips in a bid to be more environmentally friendly.
The bank is on a drive to reach net zero emissions by 2030 and said all businesses have a part to play in tackling climate change.
Monzo said it already has lower greenhouse gas emissions than high street banks because it does not have to run a branch network.
Petrol expected to drop below £1.40 per litre after CMA cracks down on overcharging
Monday 3 July 2023 13:19 , Daniel O'Boyle
A litre of petrol is expected to cost less than £1.40 by the end of the month, according to Finixio, after the monopolies watchdog cracked down on supermarkets overcharging for fuel.
It would be the first time petrol prices fell below £1.40 since October 2021.
A litre of diesel is expected to fall to about £1.49.
6.25% interest rates fully priced in
Monday 3 July 2023 12:45 , Daniel O'Boyle
Markets have fully priced in interest rates of 6.25% for May 2024, with rates also expected to stay at 6% or higher until November 2024.
The higher interest rate expectations have sent gilt yields even further up.
Take a look at all the key market data.
Oil prices surge on Saudi and Russia cut
Monday 3 July 2023 12:19 , Daniel O'Boyle
Oil prices have jumped after Saudi Arabia and Russia both extended their cuts to oil production.
Saudi Arabia will produce around 9 million barrels of oil per day, while Russia will reduce its production by about half a million barrels a day.
That sent Brent crude prices up by almost 1% to $76.12 a barrel.
That sent shares of London’s oil supermajors up. BP is up 3% to 472.2p, while Shell is up 2.3% to 2,395.3p.
Five-year gilt yields top mini-Budget highs
Monday 3 July 2023 12:13 , Daniel O'Boyle
Five-year gilts are yielding 4.73%, exceeding the levels reached during the chaos of last years mini-Budget.
Short-dated gilt yields had already topped mini-Budget levels last month on the back of stronger-than-expected wage growth. But a further surge today has taken medium yields beyond those levels too.
With the latest rise, five-year fixed-rate mortgages, which tend to be priced off the five-year gilt market, appear certain to cross the 6% threshold.
Two-year gilt yields continued to climb too, hitting another 15-year high of 5.35%.
‘Drivers paid nearly £1bn more for fuel after supermarkets increased margins’
Monday 3 July 2023 12:10 , Daniel O'Boyle
Drivers paid nearly £1 billion more for fuel at supermarkets last year due to increased margins, an investigation has found.
Watchdog the Competition and Markets Authority (CMA) said average supermarket fuel margins rose by 6p per litre between 2019 and 2022.
That led to an estimated combined additional cost of “around £900 million” for customers of Asda, Tesco, Sainsbury’s and Morrisons, a report stated.
Two-year gilt yields at yet another 15-year high
Monday 3 July 2023 11:42 , Daniel O'Boyle
Two-year gilt yields have broken through the highs reached last week, hitting 5.33% as investors start to contemplate the slim possibility of interest rates hitting as high as 6.75%.
Five-year yields, meanwhile, are threatening to top the peak reached in the immediate aftermath of last year’s mini-Budget.
Rates of 6.75% are still seen as very unlikely, with the market-implied peak remaining at 6.25%, but the implied probability crossed the 5% threshold today, having previously been a negible possibility.
City comment: Mini-Budget still plays a role in latest round of gilt market chaos
Monday 3 July 2023 11:19 , Daniel O'Boyle
The events throughout the Ashes Test match at Lord’s were truly remarkable. During one of the rare quieter passages of play I was chatting to one of London’s major bond market participants.
Our conversation turned to another extraordinary period of turmoil, the mini-Budget of last September and the financial markets meltdown that followed.
His sobering view was that bond investors will never again view gilts — and the British Government as a borrower — in quite the same way again. Centuries building a reputation as one of the world’s most responsible and prudent issuers of Government bonds had been trashed in days as investors looked on aghast.
IG chief Felix takes a break for medical leave
Monday 3 July 2023 10:43 , Simon English
June Felix, chief executive of IG Group, is to stand down from the business for a “short period” of medical leave.
Felix has led the business for four years, expanding into new markets while retaining its position as the top spread betting house in the City. She is paid around £3.5 million a year.
IG, based on Cannon Street in the City, wasn’t specific about her condition. But it is thought likely she will be off for two to three months.
Charlie Rozes, her chief financial officer, will become acting CEO in the meantime.
Felix is on the board of the London Technology Club. She has had senior roles in finance in Hong Kong, New York and London.
IG is one of the main sponsors of England cricket.
Capita to sell debt collection business
Monday 3 July 2023 10:18 , Daniel O'Boyle
Outsourcing giant Capita is to sell its debt collection business to a group led by private equity business Capricorn and South African insurance firm Shackleton for an undisclosed fee.
The business, which trades under the names Equita and Ross & Roberts in England and Wales, and Stirling Park in Scotland, provides debt collection services for both the public and private sectors.
Jon Lewis, Capita’s chief executive officer, said: “We are pleased to have agreed the sale of our enforcement businesses.
“The sale marks another positive step for our successful disposals programme which has enabled us to significantly strengthen the balance sheet and materially reduce our debt.”
Manufacturing sector declines further, but good news on prices
Monday 3 July 2023 09:37 , Daniel O'Boyle
The UK manufacturing sector remained firmly in decline in June, but there were signs of inflation easing.
Output declined for the fourth straight mont according to the S&P CIPS Purchasing Managers’ Index, which recorded a score of 46.5. Any figure above 50 represents growth.
However, input costs declined at the fastest pace in seven-and-a-half years, thanks to reduced fuel costs and improved supply chains.
Rob Dobson, director at S&P Global Market Intelligence, said: “Although some respite is being offered in the short-term by reduced pressures on supply chains and costs, these remain a symptom of the current weakness of demand faced by the sector and are therefore unlikely to play a role in boosting production moving forward. Manufacturers therefore remain in defence mode, looking to cut back spending on purchasing and employment wherever possible and release capital tied up in stocks”
The report said: “The end of the second quarter saw the UK manufacturing sector remain in contraction territory, with levels of output, new orders and employment suffering further declines. This was despite signs of price and supply chain pressures easing, as client uncertainty and subdued conditions in domestic and export markets continued to weigh on order books.”
Five-year mortgage fixes get ever-closer to 6%
Monday 3 July 2023 09:27 , Daniel O'Boyle
Average mortgage rates rose yet again today, while the number of products on the market fell to a four-month low.
According to stats from Moneyfacts, the average 2-year fixed residential mortgage rate today is 6.42%. That’s up from Friday’s average of 6.39%.
The average 5-year rate is 5.97%, up from 5.96%.
The number of products on the market dropped below 4,400 for the first time since early March.
‘Profound’ impact: Higher interest rates send central London office sales down
Monday 3 July 2023 09:17 , Joanna Hodgson
The impact from soaring interest rates on central London’s huge office market has been laid bare, as figures showed investor spend on buildings has slumped by more than 50%.
Provisional figures from property consultancy JLL for the Evening Standard show a “profound” slowdown in transaction activity in the first half of the year.
Rising borrowing costs will add further pressure to a commercial real estate sector many commentators have observed is undergoing big change as hybrid working remains popular.
Key market data as FTSE 100 gains
Monday 3 July 2023 08:58 , Daniel O'Boyle
Take a look at all the key market data as the FTSE 100 staerted 0.2% higher today.
Minsers led the rise, while AstraZeneca - the largest component of the index - has been the biggest loser.
Short and medium gilt yields edged further upwards, but remain below midweek highs from last week.
Miners and banks help FTSE 100 make a steady start to the second quarter
Monday 3 July 2023 08:39 , Michael Hunter
The FTSE 100 made a steady start to the second quarter of 2023 today, helped by a strong showing for two of its index’s biggest sectors.
Mining and banking stocks took up notable positions on the leaderboard. The demand for them came amid hopes that there was ground to make up for the main London index after a relatively muted first half of the year, particularly compared to its US rivals, which fared better to the halfway point.
Richard Hunter, head of markets at Interactive Investor, said: “The first half of 2023 can be viewed as a success for investors. Quite apart from the Nasdaq having notched such a strong gain, the technology-exposed S&P500 also added 16%, while the more traditional Dow Jones index rallied at the last to finish up by 3.8% so far this year.”
Looking at London, he said: “The tentative return to something of a risk-on approach was reflected by buying interest in the miners, while banks saw some relief after a recently turbulent time and ahead of their half-year reporting season at the end of this month.”
Victoria Scholar, Head of Investment, interactive investor says, “The FTSE 100 was the sharp underperformer in H1, higher by 1% versus the DAX up almost 16% and the CAC up 14% as investors continue to take a cautious stance towards the UK. Meanwhile the Nasdaq Composite enjoyed its best first half since 1983 while Apple reached a $3 trillion market cap.”
As July trading got underway, the FTSE 100 was up 9 points at 7549.92, a rise of 0.1%.
Multinational miner Anglo American topped the leaderboard, up 56p to 2283p. BP gained 9p to 467p. Glencore, the commodities trader and miner, was up 9p at 453p. NatWest was the best performing bank, up 4p to 245p. Barclays gained 2p to 156p.
The mood will face a test from data that will feed into the outlook for the UK’s hard-fought battle with inflation. The forward-looking Purchasing Managers’ Index for the manufacturing sector is set to fall further under the 50-line than separates expansion from contraction at 46.2 from 47.1.
JD Sports to open 50 stores in Middle East with new licensing deal
Monday 3 July 2023 08:12 , Daniel O'Boyle
JD Sports has agreed a new licensing deal that will see 50 new stores open in the Middle East under the sportswear brand’s name.
JD, which plans to open between 200 and 300 new stores over the next five years, will partner with Dubai-headquartered GMG, which will license its brand in the UAE, Saudi Arabia, Kuwait and Egypt.
Régis Schultz, CEO of JD Sports, said: “We are very pleased to be delivering this historic deal, the first franchise agreement JD has entered, in partnership with GMG.
“Through my own career, I have seen firsthand the massive untapped potential for retailers in the Middle East, and I am certain that GMG – with their expansive retail expertise and a local understanding of the customer – are the best partners for us in the region.”
Data wiping firm says profits will be well ahead of expectations
Monday 3 July 2023 08:01 , Daniel O'Boyle
Data wiping firm Blancco technology says profit will be “comfortably higher” than market expectations, as more companies focus on sustainability and governance.
Matt Jones, chief executive officer of Blancco, said:
"Demand for Blancco’s best-in-class products and services is strong with the tailwinds of governance and sustainability giving us confidence in continued growth in the years ahead. With various legislation on data security and now increasingly on sustainability emerging, Blancco is well placed for continued growth as a beneficiary of these structural market drivers."
Peel Hunt analyst Damindu Jayaweera said: “Today’s update, that geographically broad-based Enterprise and ITAD growth came in ahead in terms of revenue, and given operational gearing, adjusted EBIT, is of no big surprise.”
FTSE 100 expected to tick higher as more inflation numbers loom
Monday 3 July 2023 07:30 , Michael Hunter
London’s FTSE 100 is expected to make some more modest progress today, after it finished a downbeat second quarter with gains at the end of last week.
According to opening calls, the main UK stock index will add 27 points to 7,558, a gain of about 0.4%. It finished the second quarter almost entirely flat, having risen 60 points on Friday.
There were hopes that the the FTSE has some scope to catch up after its relatively underwhelming run for 2023 so far.
Michael Hewsomn market analyst at CMC Markets, said:
“Despite the records highs being set by European markets in the first half of this year, one index above all the others has disappointed, that being the FTSE 100, which managed to get off to a flier in the early part of the year, hitting a record high above 8,000, before sinking to a six-month low in the space of 4 weeks. Of all the major indices its greater weighting towards banks, and commodities has seen it underperform, largely due to the weakness of the rebound in the Chinese economy, and the fall in oil and gas prices.”
Attention will turn back to inflation, with purchasing managers’ index data from the manufacturing sector due from the UK and the Europe throughout the morning.
Tesco confirms Murphy will lead board as he exits Tate & Lyle post
Monday 3 July 2023 07:15 , Daniel O'Boyle
Gerry Murphy will become the new chair of Tesco and exit the same role at Tate & Lyle.
As was reported over the weekend, Murphy, who is also chair of Burberry, will replace John Allan. Allan announced his departure in May after he was accused of inappropriate behaviour. Allan said the claims were “baseless” but Tesco said they risked “becoming a distraction.
Murphy will leave the Tate & Lyle role but remain chair of Burberry.
Gerry Murphy said: “I am delighted to join the Tesco Board as its Chair. Tesco has a very important role to play in its markets, serving customers, communities and the planet a little better every day. I'm fully committed to helping Ken and the Tesco team deliver on this purpose and very excited about the strategic opportunities for growth across the Tesco group. I also want to pay tribute to my predecessor, John Allan, whom I have known for many years. John has left Tesco with its business, management and Board in great shape and fit for the future.”
Friday’s top stories
Monday 3 July 2023 07:05 , Daniel O'Boyle
Good morning, here is a selection of Friday’s top stories:
Severn Trent boss Liv Garfield is attempting to bring together a group of utilities CEOs to fend off nationalisation, a secret email obtained by the Standard has shown
The FTSE 100 finished the first six months of the year almost perfectly flat after strong gains on Friday
Inflation in the Eurozone fell to just 5.1%, making the UK’s 8.7% figure appear more of an outlier among rich nations
