Yahoo Finance FTSE 100 surges to record high as Middle East tensions ease
The FTSE 100 has closed at a record high after fears about an escalating conflict in the Middle East eased.
London’s blue chip index rose 1.6pc on Monday to close at 8,023.87, surpassing the previous record of 8,014 set in February 2023.
The index had climbed as high as 8,042.81 during the session, which was just short of its all-time trading high of 8,047.06.
Shares rallied as heightened tensions in the Middle East eased. Mohit Kumar, chief economist Europe at Jefferies, added: “Overnight, risk sentiment is better on a relief rally that no adverse geopolitical headlines were reported on the weekend.”
Oil prices retreated after Iran on Friday downplayed Israel’s retaliatory drone strike and said it did not plan to respond. A barrel of Brent crude oil dropped 0.3pc to $87.02 on Monday.
Kazuo Kamitani, a strategist at Nomura Securities, said: “It seems neither Israel nor Iran want an escalation in the crisis in the Middle East... and with a subsequent strike from either side not looking like it’s coming, investor concerns have eased somewhat.”
The FTSE 100 was also boosted by a weaker pound. Around 70pc of earnings made by companies on the index are in dollars. A weak pound makes sterling share prices look cheap, given dollar earnings are unaffected, and attracts international buyers.
The pound sunk to $1.23 against the dollar for the first time since November as investors ramped up bets that the US Federal Reserve will keep interest rates higher for longer than European counterparts.
London led the way among major European markets, with Frankfurt’s Dax up 0.7pc and the Cac 40 in Paris rising by 0.2pc.
Retail stocks were among the best performers on the FTSE 100: Marks & Spencer rose by 4.4pc, Sainsbury jumped 3.9pc, Tesco climbed 3.5pc and Ocado moved up 3.2pc.
06:19 PM BST
Signing off
That’s all from us! We’ll be back first thing tomorrow with the latest.
05:07 PM BST
Asda apologises for payroll chaos that left thousands of workers out of pocket
Asda’s finance chief has apologised for a botched IT upgrade that saw thousands of workers paid the wrong amount, as he said the supermarket has not yet found a new chief executive.
Michael Gleeson said the company was sorry for the “anxiety” caused by payroll issues, which is understood to have impacted 30,000 employees. Some were underpaid and others were overpaid because of problems with the changeover.
Payroll issues have been ongoing for two months and were caused by Asda switching away from IT systems used by its previous owner, Walmart.
Business reporter Daniel Woolfson has the full story...
04:35 PM BST
FTSE 100 closes on record high
The FTSE 100 has closed at a record high, kicking off the week as the best performing European market amid an easing of tensions in the Middle East.
The UK’s flagship stock market climbed 1.62pc today to close at 8,023.87, beating its previous record closing high of 8,014 set in February 2023.
04:27 PM BST
UBS downgrades Big Tech stocks amid sector-wide slowdown
Profit growth momentum of the so-called “Big Six” technology stocks could collapse amid a sector-wide slowdown, according to UBS.
UBS Global Research downgraded Apple, Amazon, Alphabet, Meta, Microsoft, and Nvidia stocks from ‘Overweight’ to ‘Neutral’.
Growth in earnings per share for the six tech stocks is expected to slow 42pc in the first quarter of 2024, from 68pc growth in the final quarter of 2023, according to UBS.
The stocks downgrade recognises the “difficult comps and cyclical forces weighing on these stocks,” said Jonathan Golub at UBS.
It is not predicated on extended valuations or doubts about artificial intelligence, he added.
It comes after last week’s tech sector sell-off as investors flocked towards safe investments, such as gold and government bonds.
Nvidia shares dropped 10pc on Friday, wiping out $212bn in market value from the AI chipmaker.
03:58 PM BST
Chill Brands says inside information allegations are ‘without merit’
Callum Sommerton, the chief executive of vape and CBD product manufacturer Chill Brands, said he is “surprised and disappointed” by the inside information allegations made against him.
He was suspended by Chill Brands after allegations were raised about “the use of inside information”.
The UK-listed company has hired law firm Fieldfisher to carry out an investigation following the claims and it has begun the process of appointing an interim boss.
The London-based company produces and distributes nicotine-free vapes under the Chill Zero brand, and has announced plans to launch its own online marketplace for third-party products.
Mr Sommerton’s suspension does not constitute disciplinary action or a disciplinary penalty and does not imply any assumption that he is guilty of any misconduct or that any decision has been made.
His full response is below:
STATEMENT
I am surprised and disappointed by the allegations made against me, which I believe are without merit. I am confident that I will be vindicated. I will avoid further comment at this time to allow the process to progress.— Callum Sommerton (@callumsomm) April 22, 2024
03:32 PM BST
Handing over
I’ll duck out at this point and, in a blast from the past, hand over the reins to Adam Mawardi, who will provide the latest updates from here.
I will leave you with these images of a driver carrying paddy straw in Bangladesh.
The straw is used by farmers as food and bedding for their livestock.
03:21 PM BST
FTSE rises as ‘interest rate cuts spied on the horizon’
As the FTSE 100 remained on track for a new record high, Susannah Streeter, head of money and markets at Hargreaves Lansdown, said:
London’s blue-chip index has had a surge of power as heightened geopolitical tensions have eased, and investors assessed the brighter prospects for the UK economy, with interest rate cuts spied on the horizon.
It’s tantalisingly close to breaching the all-time intraday high of 8,047 and it’s been trading above its record closing value of 8,014.
Gold, a safe haven asset, has slipped back slightly in the absence of fresh attacks by Iran or Israel. However, the precious metal is still hovering close to record highs.
Brent crude has also fallen back slightly as the focus turns to the prospects of weakening demand in the US if high interest rates linger for longer.
However, it’s not had much effect on the share prices of the big energy giants. Tensions are still simmering in the Middle East and there are ongoing concerns about the potential that they could flare up again, causing fresh disruption to supplies.
03:11 PM BST
US shares rise after Netflix fuelled sell-off
Wall Street stocks bounced as markets attempt to rebound from last week’s losses amid worries about earnings and geopolitical troubles.
The Nasdaq on Friday sank more than 2pc as traders feared a rout in Netflix shares after earnings would be repeated this week when Amazon, Microsoft and other tech giants report results.
Investors are also edgy about the brittle situation in the Middle East and they are facing fewer potential interest rate cuts this year than previously thought.
The Dow Jones Industrial Average was up 0.3pc, the broad-based S&P gained 0.5pc, while the tech-rich Nasdaq Composite Index advanced 0.8pc.
Among individual companies, Tesla fell as much as 3.2pc following another round of price cuts in the latest sign of intensifying competition among electric vehicles. The company will report results this week.
Nike slid 0.4pc after disclosing to state officials in Oregon that it plans to cut 740 jobs from its headquarters. It quickly recovered to be flat on the day.
Jay Hatfield, chief executive at InfraCap said:
The market got over-sold on Friday because of Netflix earnings, it was primarily a tech-driven decline.
We’re headed into megacap earnings and so people are starting to realize that Netflix is not very indicative of what’s going to happen with other megacap stocks.
02:52 PM BST
Ocado jumps amid pressure to switch to New York listing
Ocado shares climbed as the retail technology comes under pressure from shareholders to consider abandoning London for New York, threatening another severe blow to the beleaguered UK stock market.
The Sunday Telegraph revealed that it is understood face-to-face conversations have been held with investors in recent weeks in which the idea of shifting its listing to America was discussed in detail.
At a private dinner around the time that its annual results were published last month, at least one leading fund manager told management that it would like to see the prospect of a trans-Atlantic shift explored properly.
Shares in Ocado moved 4.4pc higher to 362.4p as investors welcomed the prospect.
Ocado Group declined to comment.
02:38 PM BST
Wall Street bounces back from steep losses
The main US stock markets have opened higher amid easing tensions in the Middle East.
The Dow Jones Industrial Average rose 130.5 points, or 0.3pc, at the open to 38,116.89 as investors also look ahead to an action-packed week with major tech earnings and key inflation data.
The S&P 500 rose 20.1 points, or 0.4pc, at the open to 4,987.33​, while the Nasdaq Composite rose 114.1 points, or 0.8pc, to 15,396.13 at the opening bell.
02:29 PM BST
Hornby hit by Red Sea shipping delays
Model trains maker Hornby has said some deliveries have been delayed as a result of shipping attacks in the Red Sea.
Margate-based Hornby, a more than 100-year-old business which specialises in toys and collectibles, said its sales have fallen in recent months.
Shares fell nearly 12pc after it said group sales over the first three months of the year were 8pc less than the same quarter a year ago.
This decline was partly driven by delays to deliveries via the Red Sea, with the movement of some container ships being pushed back from March to April.
Ongoing attacks along key trade routes in the Suez Canal have had a knock-on effect to international shipping, forcing some container ships to re-route and driving up freight costs.
Iran-backed Houthi rebels are behind the attacks in what they say is a campaign of solidarity with Palestinians in Gaza amid the Israel-Hamas conflict.
Other retailers like Pepco Group, which owns Poundland, and fashion chain Next have flagged heightened freight charges and delays due to disruption in the Middle East.
02:13 PM BST
Pound falls close to £1.23
The pound has fallen to its lowest level since November amid growing speculation that the Bank of England could cut interest rates before the US Federal Reserve.
Sterling was last down 0.5pc to just over $1.23, its lowest level since November 14 last year.
David Morrison, senior market analyst at FCA, said:
Sterling is under pressure once again. Comments last week from Bank of England Governor Andrew Bailey, have encouraged some selling as he kept alive the prospect of an earlier-than-expected rate cut, thanks to the prospect of a sharp fall in inflation.
Despite this, there’s still speculation that the Bank won’t move until November.
02:02 PM BST
Heathrow refuelling staff to go on strike
Workers who refuel aircraft at Heathrow Airport are to strike in a dispute over terms and conditions during the May bank holiday weekend.
Members of Unite employed by AFS will walk out for 72 hours from Saturday, May 4.
The union said AFS, a joint venture between oil and gas companies, was planning to cut pension and sickness benefits.
Heathrow Airport is working on contingencies with AFS to manage any potential disruption, saying it has “robust” measures planned, adding that passengers can book flights from Heathrow with confidence.
01:44 PM BST
FTSE leaps ahead of European rivals in ‘relief rally’
The FTSE 100 has kicked off the week as the best performing European market amid an easing of tensions in the Middle East.
The UK’s flagship stock market has gained as much as 1.8pc today to more than 8,030 - putting on track to beat its record closing high of 8,014 set in February 2023.
Miners gained 1pc on the commodity-heavy index as they were boosted by the price of tin hitting its highest level in two and a half years and nickel prices hitting seven-month highs.
The FTSE 100 remains a whisker away from its intraday record of 8,047.06 sit in February 2023.
The FTSE 100 led the way among major European markets, with Germany’s Dax up 0.6pc and the Cac 40 in France rising by 0.2pc as oil and gold prices dipped.
The FTSE 100 has also been boosted by the falling value of the pound, which has dropped 0.9pc over the last three days below $1.24 for the first time since November amid signs that US interest rates will stay high for longer than previously expected.
01:35 PM BST
US buyer swoops on door handle maker Tyman in fresh blow for London market
London’s stock market is losing another company after a door handle maker agreed to a £790m takeover by an American suitor.
Our reporter Michael Bow has the details:
Tyman, which makes parts for door and window handles, has struck a deal to be bought by US rival Quanex.
It marks the latest blow for the London Stock Exchange, which has struggled to stem a wave of companies fleeing the market in recent months.
Analysts at Peel Hunt have previously warned that the small cap index could cease to exist by 2028 at the current pace of takeovers.
There were 160 companies in the small cap index in 2018 but this is expected to fall to only 100 by the end of the year.
Only last week lighting supplier TClarke, one of London’s oldest listed stocks, agreed a £160m takeover by UK gas supplier Regent.
Other businesses leaving the market through takeovers recently include Spirent Communications, Wincanton, Accrol Group, Mattioli Woods and SmartSpace Software.
Tyman chairman Nicky Hartery said a sale was the best way to benefit shareholders.
01:18 PM BST
Telegraph readers: We are victims of Thames Water
Many of you have voiced your opinion on Thames Water’s latest business plan in our comments section.
Here are a selection of reader views and you can join the debate here.
01:00 PM BST
Stagnant Britain is becoming like France, says World Bank chief economist
Britain’s bloated state has made the country look more like France than America in a trend that is hurting economic growth, according to the chief economist of the World Bank.
Our economics editor Szu Ping Chan has the interview:
Indermit Gill said a recent increase in public spending had put the size of the British state on a trajectory that made it look more like its Gallic neighbour.
Speaking to The Telegraph, Mr Gill said: “The country that used to be the most like the United States in all of Europe was the UK. And you guys decided to go and become a lot more like continental Europe.
“Take a look at the share of government spending to GDP. You look like France, not like the US.”
These three charts show why he thinks so.
12:29 PM BST
When will the train strikes take place and which lines are affected?
Members of Aslef will walk out from Tuesday, May 7 to Thursday, May 9 at different operators and ban overtime for six days from the Bank Holiday Monday, May 6.
Drivers will strike on May 7 at c2c, Greater Anglia, GTR Great Northern Thameslink, Southeastern, Southern, Gatwick Express and South Western Railway.
On May 8 there will be strikes at Avanti West Coast, Chiltern Railways, CrossCountry, East Midlands Railway, Great Western Railway and West Midlands Trains.
Aslef members at LNER, Northern Trains and TransPennine Express will strike on May 9.
12:18 PM BST
Train drivers to go on fresh strikes
Train drivers at 16 rail companies will stage a series of fresh strikes in their long-running pay dispute, the Aslef union has announced.
The latest action will take place after the Spring Bank Holiday from Tuesday, May 7 to Thursday, May 9.
12:17 PM BST
Royal Mail owner pushes for cuts to delivery obligations in takeover fight
The owner of Royal Mail has urged regulators to approve its plan to cut back its obligation to deliver letters six days a week as it faces a takeover attempt by Czech billionaire Daniel Křetínský.
International Distributions Services (IDS) has published its submission to Ofcom seeking changes to the universal service obligation (USO) which it says will save the company as much as £300m a year.
It comes as the board braces for a fresh approach from Mr Křetínský, who is expected to make a fresh swoop before a deadline of May 15 imposed under City takeover rules after his initial £3.1bn bid was rebuffed.
The IDS plan includes cutting deliveries of second-class letters — and standard business letters such as bills — to every other weekday. IDS said:
Royal Mail has developed a clear and detailed proposal for USO reform based on extensive modelling and analysis of customer needs.
These changes should be enacted quickly by Ofcom through changes to postal regulations and conditions and do not require legislation.
Mr Křetínský is “very serious” about a takeover, a source close to negotiations has said.
11:58 AM BST
Apple ‘scraps vegan iPhone cases’ after backlash
Apple has reportedly suspended production of vegan phone cases it started selling less than a year ago.
Our technology editor James Titcomb has the details:
The tech giant is said to have stopped making its FineWoven cases and watch straps following complaints that the £59 cases would become easily scratched and worn out.
Apple introduced the material, a “microtwill” made up of recycled textiles and other fibres, last September when it announced that it would no longer produce leather accessories as part of an environmental push.
The business has committed to its supply chain being completely carbon neutral by 2030.
When it introduced the FineWoven cases and watch bands, which cost between £99 and £149, Apple said they had a “sophisticated look” and a “significantly lower carbon footprint than leather”.
Read why consumers have complained about them.
11:38 AM BST
Wall Street on track to open higher in ‘relief rally’
US stock indexes have risen as easing Middle East tensions boosted the mood among investors.
The Nasdaq and the S&P 500 ended lower on Friday as Netflix shares fell after a dour quarterly earnings report.
Both the indexes had suffered six straight sessions of declines, their longest losing streak since October 2022.
Nvidia led gains across megacap growth stocks with a 2.4pc rise in premarket trading, rebounding from a 10pc drop in the last session.
Other stocks such as Meta Platforms, Amazon.com and Alphabet edged higher between 0.3pc and 0.9pc.
Mohit Kumar, chief economist Europe at Jefferies, said:
Overnight, risk sentiment is better on relief rally that no adverse geopolitical headlines were reported on the weekend.
Our cautious stance continues this week, though the repricing from last week, particularly in tech stocks would give an opportunity to buy the dip.
In premarket trading, the Dow Jones Industrial Average was up 0.5pc, the S&P 500 had gained 0.6pc and the Nasdaq 100 was 0.7pc higher.
11:26 AM BST
Chill Brands boss suspended amid ‘inside information’ allegations
Vape and CBD product manufacturer Chill Brands has suspended its chief executive Callum Sommerton after allegations were raised about “the use of inside information”.
The UK-listed company has hired law firm Fieldfisher to carry out an investigation following the claims and it has begun the process of appointing an interim boss.
Chill Brands’ share price plunged as much as 31pc in morning trading after the announcement.
Chill Brands said: “This suspension does not constitute disciplinary action or a disciplinary penalty and does not imply any assumption that Mr Sommerton is guilty of any misconduct or that any decision has been made.”
The company added that it will engage with the Financial Conduct Authority over the investigation, and the findings will be reported “in due course”.
It assured customers and shareholders that the company will continue operating as normal in the meantime.
The London-based company produces and distributes nicotine-free vapes under the Chill Zero brand, and has announced plans to launch its own online marketplace for third-party products.
11:11 AM BST
Oil prices slump as Middle East tensions ease
Oil prices have fallen as investors have taken profits amid fading tensions in the Middle East.
Brent slipped as much as 1.7pc below $86 a barrel after posting the biggest drop since early February last week. Gold also fell, in a sign that demand for safe havens is easing.
An uneasy calm has descended over the market after prices initially leapt on Friday before Iran downplayed Israel’s retaliatory attack.
On Monday, addressing the tensions, Tehran said Israel has received the “necessary response at this stage”.
The US House has passed new sanctions on Iran’s oil sector following the hostilities, putting the measure on track to pass the Senate in days. The country also approved fresh funding for Ukraine in its war against Russia.
Oil is around 12pc higher this year due to the geopolitical tensions and supply cuts by the Opec cartel and its allies, which have tightened the market.
Results are due this week from the world’s largest oil majors including TotalEnergies, Chevron and Exxon Mobil.
10:49 AM BST
Customers should not pay for Thames’ poor performance, says Defra
After Thames Water published its latest spending plans, a spokesman for the Department for Environment, Food & Rural Affairs said:
Customers cannot be expected to pay the price for Thames Water’s poor performance, which is why Ofwat should use their full powers to protect customers and ensure value for money in their bills.
As with all water company plans, this is not yet final and Ofwat will now independently scrutinise this latest version to ensure it delivers for customers and meets the company’s legal requirements and government targets.
10:37 AM BST
FTSE 100 leads European peers as fears ease about Middle East conflict
The FTSE 100 has kicked off the week as the best performing European market amid an easing of tensions in the Middle East.
The UK’s flagship stock market has gained 1.4pc as the price of tin hit its highest level in two and a half years.
Miners gained 1pc on the commodity-heavy index as they were also boosted by nickel prices hitting seven-month highs.
Meanwhile, Germany’s Dax added 0.5pc while the Cac 40 in France was up 0.2pc as oil and gold prices dipped.
Investors have reversed some of their more defensive positions taken going into the weekend on fears of a wider Middle East conflict.
Kazuo Kamitani, a strategist at Nomura Securities, said: “It seems neither Israel nor Iran want an escalation in the crisis in the Middle East ... and with a subsequent strike from either side not looking like it’s coming, investor concerns have eased somewhat.”
10:18 AM BST
Thames Water admits update includes only ‘small changes’ to business plan
Thames Water has now published its revised business plan on its website, setting out how average bills could rise over the next five years to £608 or £627.
The £627 figure - which would put bills up by more than £50 a month - would be met if it is allowed by Ofwat to invest an extra £1.9bn in fixing storm overflows and pollution.
Under its initial plan published in October, it would now only raise bills to £608 a year by 2030, compared to £611 originally forecast, after removing some operational expenditure.
This would still be a £175 a year increase compared to the £433 paid on average 2023 to 2024.
The company admitted these are “some small changes to parts of our plan”.
09:51 AM BST
Pound falls as US rates expected to stay high
The pound dipped to its lowest level against the dollar in five months amid expectations that US Federal Reserve will keep interest rates higher for longer.
Sterling was down 0.1pc at $1.236 having dropped below $1.24 for the first time since November last week.
Sterling has lost around 3pc in value against the dollar in 2024, mostly due to traders drastically reassessing how much US interest rates might fall by this year.
Investors are pricing in roughly two quarter-point cuts from the Bank of England this year, compared with fewer than two from the Federal Reserve and with nearly three from the European Central Bank.
Against the euro, the pound is still up 0.4pc, but its advantage over the single European currency has eroded sharply in the last week or so.
The euro was up 0.1pc against the pound at 86p.
09:30 AM BST
Gas prices slip as cold snap barely dents supplies
Gas prices have dropped to their lowest level in more than a week after stock were barely touched during a cold snap across Europe.
Europe’s benchmark contract was down as much as 4.4pc as the easing tensions in the Middle East also boosted confidence that the continent can cope with shocks to its energy supplies.
The UK’s equivalent contract fell as much as 4.9pc.
Supplies across Europe remain abundant despite cold temperatures over the last week, sitting above the usual levels for the time of year and with milder temperatures forecast.
09:10 AM BST
Asda profits boosted by loyalty scheme
Asda has revealed its underlying earnings swelled by a quarter last year with growth in food and clothing sales boosted by its rewards scheme for shoppers.
The UK’s third-biggest supermarket chain said its underlying earnings, before additional costs like tax and interest, rose by 24pc to £1.1bn over 2023, compared with 2022.
It came as supermarket sales, excluding fuel, grew 5.4pc on a like-for-like basis, which excludes the impact of new stores opening during the year.
Total sales, excluding fuel, hit nearly £22bn during the year, as the chain said it had benefited from about six million customers now using its loyalty app to shop with the retailer.
Around half of all sales are linked to its reward programme, Asda Rewards, which it described as a “key revenue driver” for the business.
The group, which runs fashion retailer George, said clothing sales edged up by 3.4pc to total £1.5bn.
Mohsin Issa, Asda’s co-owner, said: “We continue to strengthen the business by expanding in the growing convenience and food-to-go sectors, leveraging our loyalty app and driving innovation in online grocery where we are the UK’s second-largest supermarket.”
The publication of its annual results comes amid reports that Mr Issa’s brother, Zuber Issa, is getting ready to sell his stake in the group to private equity group TDR Capital.
The Issa brothers joined forces with TDR to buy Asda three years ago for £6.8bn.
08:53 AM BST
Ofwat cannot allow Thames bill hikes, say Lib Dems
Liberal Democrat Treasury spokeswoman Sarah Olney said:
It would be an absolute disgrace if customers are forced to foot the bill for Thames Water’s shambolic failings.
Ofwat cannot allow these bill hikes to go ahead.
She said the Liberal Democrats will be tabling a Bill in Parliament today, which would immediately put Thames Water into special administration.
08:51 AM BST
FTSE jumps as concerns ease about Middle East crisis
London stocks rose over 1pc following a sharp selloff last week, as fears of escalating tensions in the Middle East eased.
The benchmark FTSE 100 rose 1.2pc, while the mid-cap FTSE 250 gained 0.8pc.
Life insurers were the top gainers, up as much as 2.6pc, led by a 2.4pc jump in Prudential.
On the flipside, precious metal miners was the only sector in the red, slipping as much as 1.7pc as gold prices eased after Iran downplayed the risks of an escalation.
Markets will be focussed on Tuesday’s comments from Bank of England’s chief economist Huw Pill for hints on future rate cuts and the manufacturing and services data for performance of the UK economy.
Shares of Ocado topped the FTSE 100 with a more than 7pc jump after the Sunday Telegraph revealed it has come under pressure from shareholders to consider abandoning London for New York.
Meanwhile, Marks & Spencer rose 3.8pc after Jefferies raised its rating of the retailer to “Buy” from “Hold”. M&S is in a joint retail venture with Ocado.
Hipgnosis Songs Fund boosted the midcap index with a 10.6pc gain as Blackstone made a potential offer to buy the company that owns rights to music by artists including Shakira and Red Hot Chilli Peppers for about $1.5bn (£1.2bn).
08:30 AM BST
European markets rebound as Middle East tensions fade
European stock markets have rallied at the start of trading amid declining concerns about a war in the Middle East.
Oil prices have fallen sharply, easing concerns among investors about a threat to inflation which could have kept interest rates higher for longer.
The FTSE 100 index jumped 1.2pc to 7,986.32 points as the price of Brent crude slumped 1.6pc below $86 a barrel.
In the eurozone, the Paris Cac 40 index gained 0.6pc to 8,068.48 points and Frankfurt’s Dax rose 0.7pc to 17,872.91.
Markets in Asia apart from Shanghai’s were broadly higher, with Hong Kong’s Hang Seng leading the region, gaining 1.8pc to 16,516.63.
Tokyo’s Nikkei 225 added 1pc to 37,438.61 and the yen weakened further, while the Kospi in South Korea jumped 1.3pc to 2,626.55.
Australia’s S&P/ASX 200 surged 0.9pc to 7,638.30.
The Shanghai Composite index shed 0.4pc to 3,051.76 after the People’s Bank of China kept its 1-year and 5-year loan prime rates unchanged.
08:12 AM BST
Ofwat: Water companies required to revise their expenditure forecasts
Statement just in from Ofwat after Thames Water published its revised business plan. A spokesman said:
Since October we have been in discussions with all companies, checking on their proposed plans and seeking further information.
There has also been further information published in the last few months clarifying companies’ statutory commitments.
Both these factors have required companies to review their proposed plans and revise their expenditure forecasts to reflect what would be required to fully comply with all statutory requirements.
We note that Thames Water has now published an update to its business plan. We will publish our draft view on companies’ plans on 12 June.
08:10 AM BST
UK markets leap higher at the open
The FTSE 100 has surged higher in a rebound from sharp losses suffered last week.
The UK’s blue-chip stock index rose 1.1pc to 7,985.16 while the midcap FTSE 250 gained 0.5pc to 19,489.74.
08:07 AM BST
Thames Water plan to increase bills now in regulator’s hands
If Ofwat were to give the full plans the Thames Water go ahead, this would see customer bills rise to £627 a year by 2030.
However, the regulator is thought to have previously refused to countenance a previous proposal of a 40pc rise in bills from Thames. That would have seen the amount paid per household rise from an average of £436 per year to £609.
When Thames revealed last month that its shareholders had refused to inject another £500m into the business, Ofwat said the utility company “must now pursue all options to seek further equity for the business to turn around”.
A spokesman said at the time that customer and the environment must be “at the heart” of the sector’s priorities, adding:
In order to drive this change, we need to ensure that the sector attracts investment and is fair to bill payers.
Since 2020 nearly £4.6bn new equity has been injected into the sector. We will set out our draft determinations in June this year.
We also need to see companies deliver the performance that customers expect and that they are run in a way that meets customers’ expectations.
07:54 AM BST
Thames Water paid out dividends for ‘delivering services efficiently’, says former executive
A former Thames Water executive has said dividends were paid out to the shareholders of the beleaguered supplier because it was thought to be “delivering services efficiently” in the years before its £18bn debt mountain left if on the verge of collapse.
Colm Gibson was head of economic regulation and a member of Thames Water’s executive leadership group from 2012 to 2018, during which time it paid out nearly £1.2bn in dividends.
The beleaguered water supplier, which has 15m customers, has revealed plans to increase water bills by 45pc over the next five years as it seeks to avoid a costly nationalisation, which would mean its lenders lose as much as 40pc of their money.
However, there has been a disagreement with watchdog Ofwat over fines, dividends and how much Thames could charge its customers.
Mr Gibson said Thames’ ownership were “quite hands on” when he was at the company, adding: “I am assuming that has continued.”
He was asked on BBC Radio 4’s Today programme about the huge dividends paid out during that time and whether it was right that the ownership should also be asking Ofwat to be allowed to ask customers to pay more.
Mr Gibson said:
If dividends are paid out the company it is because it has delivered services efficiently.
Ofwat has never been particularly sympathetic to dividends for shareholders in terms of setting prices.
It has always tried to determine what prices should be if the company was efficient and delivering the services it ought to be delivering.
07:43 AM BST
Thames Water plots bills of more than £50 a month
Thames Water aims to increase bills by 45pc over the next five years to more than £50 a month as its £18bn debt mountain leaves it on the verge of collapse.
The beleaguered utility company has set out plans to spend nearly £20bn fixing leaks and sewage spills under a new business plan sent to regulators.
It is battling to avoid a costly nationalisation, which would mean its lenders lose as much as 40pc of their money.
However, its new plan, known as PR24, is subject to approval by the regulator Ofwat, which aims to shield customers from unnecessary bill increases. It will issue its draft decision in June.
Thames Water aims to increase typical bills from £433 a year in 2023 to 2024 to £627 by 2029 to 2030, an increase of 45pc to an average of £52.25 a month.
It comes after shareholders last month said they would not give the company a promised £500m lifeline which had been part of a planned £3.75bn funding package designed to see the company through to 2030.
Chief executive Chris Weston said: “Our business plan focuses on our customers’ priorities.
“As part of the usual ongoing discussions relating to PR24, we’ve now updated it to deliver more projects that will benefit the environment. We will continue to discuss this with our regulators and stakeholders.”
07:34 AM BST
Good morning
Thanks for joining me. Thames Water plans to spend nearly £20bn fixing leaks and sewage spills under a new business plan sent to regulators.
The beleaguered water supplier, which has £18bn of debt, wants to spend £1.1bn more than previously thought under proposals sent to the regulator Ofwat, known as PR24.
It is battling to avoid a costly nationalisation, which would mean its lenders lose as much as 40pc of their money.
Shareholders last month said they would not give the company a promised £500m lifeline which had been part of a planned £3.75bn funding package designed to see the company through to 2030.
Chief executive Chris Weston said: “Our business plan focuses on our customers’ priorities.
“As part of the usual ongoing discussions relating to PR24, we’ve now updated it to deliver more projects that will benefit the environment. We will continue to discuss this with our regulators and stakeholders.”
5 things to start your day
1) Dover races to prepare for mandatory fingerprint checks | Ferry passengers face higher fares as port launches hiring spree
2) Households face £400 net zero hit from higher interest rates | Heightened borrowing costs will make investment in renewables more expensive
3) Employers plot fightback against Britain’s sick day scourge | Some corporations hire private detectives as absences threaten £66bn economic hit
4) Former Thames Water owner Macquarie mulls sale of KCOM | Australian bank believes broadband provider is well-positioned for wave of consolidation
5) Blacklisted Chinese telecom company investigated by HMRC | Chinese tech company may owe as much as £1.5m to the taxman
What happened overnight
The S&P 500 and Nasdaq are both on six-day losing streaks, falling by 3.05pc and 5.52pc last week after a tech sell-off.
The Nasdaq fell by 2pc on Friday alone, driven by a 10pc plunge in chip-maker Nvidia.
In the UK, the FTSE 100 fell by 1.25pc last week as tensions in the Middle East hit sentiment.
But oil markets have remained calm after Iranian state media downplayed a retaliatory air strike from Israel on Friday. Brent crude prices closed at around $87 per barrel on Friday, down from $90 a week earlier.
Markets in Asia apart from Shanghai’s were broadly higher Monday, shrugging off the blues on Wall Street after big technology stocks logged their worst week since the COVID crash in 2020.
Hong Kong’s Hang Seng led the region, gaining 1.6pc to 16489.08. But the Shanghai Composite index shed 0.5pc to 3,050.89 after the People’s Bank of China kept its 1-year and 5-year loan prime rates unchanged.
Tokyo’s Nikkei 225 added 0.4pc to 37,219.47 and the yen weakened further. The US. dollar rose to 154.69 yen from 154.59 yen, trading at levels not seen since 1990.
The Kospi in South Korea jumped 0.8pc to 2,613.61.
Australia’s S&P/ASX 200 surged 1pc to 7,640.30.
