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FTSE 100 closes in red as Rishi Sunak calls 4 July UK election

A look at how markets are performing this Wednesday

UK prime minister Rishi Sunak is set to announce summer general election on 4 July.
UK prime minister Rishi Sunak is set to announce summer general election on 4 July. (Anadolu via Getty Images)

The FTSE 100 (^FTSE) and European stocks closed in the red on Wednesday, with London's premier index falling amid disappointing inflation figures and Rishi Sunak's announcement that the next general election will be held on 4 July.

  • London’s benchmark index finished 0.6% lower at 8,370 points

  • Germany's DAX (^GDAXI) slipped 0.3% and the CAC (^FCHI) in Paris finished lower 0.6%, following the mood of most European bourses

  • The pan-European STOXX 600 (^STOXX) was 0.3% in the red as the closing bell rang

  • Financial markets have scaled back their expectations for an interest rate cut in June, and August is also looking slightly less likely. Traders are betting in November for a cut

  • Wall Street was muted from near record highs ahead of AI darling Nvidia's results, which will be announced after the US bell. The S&P 500 (^GSPC) was flat, while the Dow Jones Industrial Average (^DJI) slipped roughly 0.1%. The Nasdaq Composite (^IXIC) rose nearly 0.1%.

  • The pound (GBPUSD=X) was higher against the dollar at 1.2727.

How it happened:

LIVE COVERAGE IS OVER19 updates
  • Featured

    Rishi Sunak calls 4 July election

    Britain's Prime Minister Rishi Sunak leaves Downing Street in London, Britain, May 22, 2024. REUTERS/Hollie Adams
    Prime minister Rishi Sunak (REUTERS / Reuters)

    Rishi Sunak has called UK general elections for the 4th of July, touting stable economy, in his speech from the 10 Downing Street lectern on Wednesday evening.

    The prime minister listed the Conservative government achievements. "We’ve tackled inflation, controlled debt, cut workers’ taxes, and increased the state pension by £900."

    He said "on the 5th of July, either Keir Starmer or I will be prime minister."

    Opinions polls have for months predicted a heavy defeat for the Conservative party. In less than two months it will be clear if Labour is able to wrest the control of 10 Downing Street after a long hiatus.

    My colleagues at Yahoo News are running a live blog to bring you the latest about what is happening at Downing Street.

  • That is all from us but if you're keen to follow what's moving markets across the pond, including Nvidia's latest, check out our US Finance blog.

    Hope you'll join us again tomorrow for more on what investors need to know to make smart decisions.

    Thanks,

  • Raspberry Pi to list in London

    UK budget computer firm Raspberry Pi has confirmed aims to list in London next month in a boost to the capital’s flagging stock market.

    The Cambridge-based firm – known for affordable credit card-sized computers designed to boost coding skills among children – has revealed plans to raise $40m (£31.4m) in new money as part of the initial public offering (IPO) on London’s main market.

    The IPO is a welcome victory for the London market, which has been hit by a swathe of UK-listed firms being bought out or defecting abroad.

    Paddy Power owner Flutter has moved its main stock market listing to New York, while German-owned Tui approved a plan to delist from London in February, and in another blow UK chip maker Arm Holdings chose Wall Street in a "kick in the teeth" for London for its stock market return.

  • Anglo American rejects BHP's 'final' offer but gives one-week extension

    This photo taken on April 11, 2024 shows unmanned trucks at an iron ore mine branch of Pangang Group in Panzhihua City, southwest China's Sichuan Province. Pangang Group Co., Ltd. is an extra-large vanadium, titanium and  steel enterprise in southwest China. In recent years, the company has continuously promoted high-end, intelligent and green development.Our reporters recently visited various production branches of Pangang Group Co., Ltd. to observe its efforts to develop new quality productive forces and promote high-quality development. (Photo by Zhang Haofu/Xinhua via Getty Images)
    Anglo American refused the £38.6bn offer by rival BHP (Xinhua News Agency via Getty Images)

    Anglo American has rejected a “final” offer from Australian rival BHP which valued the miner at £38.6bn but but opened the door to its rival by agreeing to a one-week extension to table a binding offer.

    The board of the London-listed miner, which owns the De Beers diamond empire, said it was confident in the company’s “standalone future prospects” as it shunned a bid worth £29.34 per share.

    This is the third unsuccessful bid in a month from NHP, the world's biggest mining group. BHP chief executive Mike Henry said the merger offered a “compelling opportunity”, which would have given would Anglo American shareholders 17.8% of a new combined venture.

    Anglo American has announced a group restructuring that includes the sale of several assets to boost its portfolio.

    Meanwhile, there have been reports in Australian media that Glencore might be considering its own approach.

  • Wall Street muted ahead of Nvidia results

    Across the pond, US stocks hovered near record highs on Wednesday as investors waited for AI bellwether Nvidia's (NVDA) pivotal earnings and for more clues to the Federal Reserve's thinking on interest-rate cuts.

    The S&P 500 (^GSPC) fell about 0.1% while the Dow Jones Industrial Average (^DJI) slipped roughly 0.1%. The Nasdaq Composite (^IXIC) popped nearly 0.1%.

  • Citi fined after 'fat finger' trade error

    London, United Kingdom - February 26, 2024: Citi Bank is one of the world's largest financial services providers for private customers
    Citi headquarters in London (David Taljat)

    Citi has been fined £62m by UK regulators after a “fat finger” trade triggered a flash crash on the European stock market.

    The trader had intended to sell equities to the value of $58m (£46m) on 2 May 2022. However, the banker made an inputting error while entering the transaction into Citigroup’s order management system, so a giant equities basket of $444bn was created – and $1.4bn was then sold into the market.

    “Firms involved in trading must have effective controls in place in order to manage the risks involved. CGML [Citigroup Global Markets Limited] failed to meet the standards we expect in this area, resulting in today’s fine,” said Sam Woods, chief executive of the PRA.

  • Trending tickers: Tesla, Nvidia, Marks & Spencer and SSE

    Tesla (TSLA) - Shares in the EV maker were higher in pre-market trading after it gave an update on its long awaited project to develop electric semi trucks.

    Nvidia (NVDA) - Nvidia is set to report its first quarter earnings after the US bell on Wednesday in what will be one of the most consequential reports for investors this year.

    Marks & Spencer (MKS.L) - Marks & Spencer has revealed a better-than-expected surge in annual profits as its turnaround pays off, but ramped up cost-cutting in the face of a soaring wage bill.

    SSE (SSE.L) - SSE has reported a 4% drop in adjusted operating profit to £2.4bn for the year, sending shares into the red this session.

  • Data regulator looking into Microsoft’s AI Recall feature amid privacy fears

    The UK’s data protection watchdog is “making inquiries” with Microsoft over a new feature that can take screenshots of a user’s computer every few seconds.

    It is part of a new tool called Recall, which uses the screenshots and artificial intelligence to look back through a user’s past activity to offer an enhanced way to search through a device.

    Microsoft has said users have privacy control options around the tool – which will be exclusive to its new AI-powered Copilot+ PCs – that can limit the screenshots collected, but it has still raised privacy concerns.

    The Information Commissioner’s Office (ICO) told the BBC that firms must “rigorously assess and mitigate risks to peoples’ rights and freedoms” before bringing new products to market.

    The data protection regulator said it was “making inquiries with Microsoft to understand the safeguards in place to protect user privacy”.

  • NIESR expects Bank of England to hold interest rates

    Paula Bejarano Carbo, an economist at the National Institute of Economic and Social Research, a respected think tank, also expects the Bank of England to hold interest rates in June.

  • UK house prices increase by 1.8% in annual terms in March

    Average UK house prices increased by 1.8% in the 12 months to March, according to official figures.

    The Office for National Statistics (ONS) said it lifted the average house price across the UK to £283,000.

    It represented a recovery in pricing after house prices had fallen by 0.2% in the 12 months to February.

    The ONS also revealed that UK private rents increased by 8.9% in the 12 months to April, as house price inflation slowed slightly from 9.2% growth in the year to March.

  • Rate cut in June is “still in play”

    Markets are now betting that the first - and probably only - interest rate cut will happen in November but there are still economists who believe in a June cut.

    Julian Jessop, economics fellow at the Institute of Economic Affairs think tank, said he believed a rate cut in June is “still in play”.

    Suren Thiru, ICAEW economics director, commented: “Lingering concerns over underlying inflationary pressures mean a June rate cut is unlikely.

    “However, these figures may convince more rate setters to vote to ease policy, providing a signal that a summer rate cut is still possible.”

  • Severn Trent hikes dividend despite increasing bills

    Severn Trent has hiked its dividend to shareholders after profits rose by a fifth last year, despite sewage spills by the company rising by a third in 2023.

    The FTSE-listed firm, which provides water to homes and businesses in the Midlands, lifted its final dividend 9% to 70.1p per share, while profit rose to £201.3 million.

    Severn Trent was responsible for more than 60,000 sewage spills last year, with those spill events lasting for more than 440,000 hours – equivalent to about 50 years.

    The water firm said it had successfully raised £1 billion from investors, having announced the raise in 2023.

    It said it is investing £450 million to improve 900 storm overflow points, about a third of the total across its infrastructure network, as part of a push to halve its average spill rate by 2030.

    Severn also said it had invested £1.2 billion this year to “continue improving performance levels”.

    However, it comes after the water company asked to increase bills by 35.7% over the next five years.

  • Oil prices slip for third session straight

    Oil prices extended their downward trajectory for a third consecutive session on Wednesday, amid fears that Federal Reserve might prolong higher interest rates to contain inflationary pressures.

    Brent (BZ=F) was trading below $82 a barrel, while West Texas Intermediate (CL=F) was near $75.

    Fed policymakers said on Tuesday the US central bank should wait several more months to ensure that inflation really is back on track toward its 2% target before cutting interest rates.

  • Asia stocks slide overnight despite high hopes for Nvidia

    Asia stocks slipped after the S&P 500 crept to another record ahead of results from giant chipmaker Nvidia Corp. that traders see as a gauge for the sustainability of the bull market.

    The Hang Seng (^HSI) in Hong Kong slipped 0.2% to 19,184 points, while the Shanghai Composite (000001.SS) close basically flat at 3,158 points. Tokyo’s Nikkei 225 (^N225) lost 0.85% to 38,617 points as data showed a weak yen was boosting exports but also stoking imported inflation and weighing on business sentiment.

  • US closed higher as Wall Street waits for Nvidia earnings

    US stocks closed in a sea of green on Tuesday with record highs for both the tech-heavy Nasdaq Composite (^IXIC) and benchmark S&P 500 (^GSPC), my colleague Karen Friar writes.

    The positive moves come as investors await heavily anticipated earnings results from Nvidia (NVDA), set for release after the bell on Wednesday.

    The Nasdaq recovered from earlier session lows to rise about 0.2%, capping off Tuesday's trading day with another consecutive record close. The S&P 500 (^GSPC), which also reached a record, rose about 0.3% while the Dow Jones Industrial Average (^DJI) climbed roughly 0.2%.

  • BT fined millions for failing to give customers contract information

    Telecoms giant BT has been fined £2.8m by the industry watchdog after its EE and Plusnet businesses failed to provide clear and simple contract information to more than a million customers before they signed up.

    Ofcom said EE and Plusnet made more than 1.3 million sales without providing customers with a contract summary and information documents since June 2022, which impacted at least 1.1 million customers.

    This meant that BT broke the regulator’s consumer protection rules, which are designed to ensure customers get clear, comparable information about the services they are considering buying.

    Ofcom said the fine “reflects the seriousness of this breach”.

  • Government borrows more than expected in April

    FILE PHOTO: British Finance Minister Jeremy Hunt leaves Downing Street, in London, Britain, March 19, 2024. REUTERS/Toby Melville/File Photo
    Chancellor Jeremy Hunt (REUTERS / Reuters)

    Chancellor Jeremy Hunt has been dealt a blow after official figures revealed borrowing for April overshot forecasts, hitting £20.5bn, in the fourth-highest April since records began in 1993.

    The Office for National Statistics (ONS) estimated that public sector net borrowing was £1.5bn more than in 2023, partly pushed up by falling national insurance contributions.

    Britain’s official forecaster, the Office for Budget Responsibility (OBR), had estimated borrowing would come in at £19.3 billion for April.

    It comes after borrowing of £11.9bn in March, which was £4.7bn less than a year ago, but higher than economists expected.

    Economists watch borrowing figures closely to see how much fiscal space the UK government has for measures such as tax cuts.

  • Marks & Spencer sees profits jump 58%

    Marks & Spencer has revealed a better-than-expected surge in annual profits as its turnaround pays off, but ramped up cost-cutting in the face of a soaring wage bill.

    The retail bellwether reported a 58% hike in underlying pre-tax profits to £716.4m for the year to March 30.

    It notched up an 11.3% hike in like-for-like food sales over the year, with growth of 5.2% across its clothing and home arm.

    The group said it was upping its cost-cutting target by another £100m to £500m by 2027-28 as it looks to offset rising staff wages.

    “With continuing cost headwinds, notably from investment in colleague pay, the structural cost programme is critical to our profit progression,” the firm said.

  • UK inflation falls to 2.3% in April inching closer to Bank of England target

    Inflation in the UK has slowed to an annual rate of 2.3% on lower energy costs, the lowest in nearly three years and closer to the Bank of England's target of 2%.

    It marks a sharp fall from 3.2% in March, according to the Office for National Statistics. Economists, however, had expected a larger slowdown to 2.1%.

    Still, the sharp decline in inflation may not be enough to trigger an early interest rate cut by its Monetary Policy Committee (MPC).

    Financial markets have scaled back their expectations for an interest rate cut in June, and August is also looking slightly less likely.

    Before today’s inflation data, which showed services inflation is more stubborn than expected, markets had fully priced in a rate cut by August.

    Read the full story here

Watch: Nvidia could be 'ultimate winner of the AI race': Strategist

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