FTSE 100 Live: London shares set to finish week highest since May, strong Chinese sales, Arm to rise further
Developers were among the main domestic beneficiaries of the FTSE 100’s sustained rally today, on growing hopes that the end of the house market slowdown could soon move into view.
Some of the biggest names in the sector took up residence on the leaderboard as investors continued to bet on the prospect that interest rates are near their peak, which would bring some clarity to the mortgage market.
Persimmon led the way, adding 18p to 1089p. Barratt Developments was 7p stronger at 458p. Taylor Wimpey gained 1.4p to 120p.
Overall, the FTSE 100 rose another 52 points to 7725.16, having gained almost 150 points over the previous session.
The rally came after the European Central Bank implied it had finished lifting rates. That sparked talk across global markets that the current cycle of tighter monetary policy was near its end.
The advance faces a stern test next week, with the Bank of England’s interest rate decision due on Thursday. City experts expect the fifteenth consecutive hike to take base rates to 5.5%. But they are also watching for signs it may be the last of the rises, which began in December 2021 to tame inflation.
Joshua Mahony at Scope Markets said: “Strength for UK housebuilders in the face of falling prices does signal a feeling that the BoE will follow their ECB counterparts when they meet next week.”
Next set to reveal sales outlook after early summer boost
Friday 15 September 2023 14:49 , Daniel O'Boyle
Fashion chain Next will give a glimpse into how the UK high street has fared this summer after a sunny June boosted sales earlier in the season.
The retail giant has nudged up its profit expectations throughout the year after benefitting from stronger online sales.
But investors will be looking to see what the outlook is for the group when it reveals its half-year financial results on Thursday.
Next last month said it had been buoyed by full-price trading and a strong end-of-season sale in the latest quarter, leading it to upgrade its profit target by £10 million to £845 million for the full year.
‘Limited’ evidence that pay rises are to blame for inflation of goods, ONS says
Friday 15 September 2023 14:02 , Daniel O'Boyle
There is “limited” evidence that rising wages are responsible for the higher cost of goods, the ONS said today, though it warned that pay may be to blame for rising costs of certain services.
Fast-rising wages have been a major subject of concern for the Bank of England, which fears the public’s pay is rising too fast to bring inflation back down to the 2% target.
In the spring, the Bank’s chief economist Huw Pill urged the public to not ask for raises. Since then, the pace of pay rises has only surged faster, to 8.5% year-on-year in the three months to July.
Bond Street set for bumper year of store lettings as vacancy rate falls
Friday 15 September 2023 13:38 , Daniel O'Boyle
Bond Street is having another bumper year with store lettings closing in on last year’s record and the vacancy rate falling back to pre-Covid levels, new data reveals.
In a boost for the capital’s status as a top high end shopping destination, just as London Fashion Week starts, it shows a host of retailers have committed to Bond Street stores. That is despite high business rates, economic uncertainty and concerns about the loss of VAT-free shopping impacting trade.
Real estate consultancy Savills said so far six deals have been signed this year, including high heels maker Aquazzura, and Danish jewellery designer Georg Jensen. A further four sites are currently under offer.
Lunchtime market snapshot
Friday 15 September 2023 13:00 , Daniel O'Boyle
Take a look at all the latest market data wqith the FTSE set to finish the week well ahead.
Slow revival for London office occupancy levels
Friday 15 September 2023 12:58 , Daniel O'Boyle
London offices are filling up again after the holiday season but occupancy is still no higher than it was at the start of the summer with workers still reluctant to give up their new hybrid working habits, new data shows.
Office occupancy levels in the capital stood at 32.9% in the week ending September 8 according to new research from Remit Consulting, which tracks figures provided by building managers,
That was up from 24.7% in the prior seven days, and growth came as many workers returned from holidays and school term started.
Public confidence in Bank of England plunges to record low
Friday 15 September 2023 12:33 , Daniel O'Boyle
Public confidence in the Bank of England’s ability to bring inflation back under control plunged to a new low today, according to the Bank’s quarterly public survey.
The Bank’s net satisfaction rate, when members of the public were asked whether it was ‘doing its job to set interest rates to control inflation’, was minus 21%. That is down from minus 13% in May 2023, and easily the lowest rate since records began in 1999, soon after the Bank became independent.
Net satisfaction rates had been positive, at between 20-30%, for most of the decade up to 2022, until inflation began to surge.
When respondents were asked what would be “best for the economy”, the largest cohort, at 40%, said that interest rates should go down. Only 13% said they should go up, despite the fact that the Bank is widely expected to raise rates further, to 5.5% or higher, before it will think about bringing them down again. 26% thought interest rates should “stay where they are”.
Thousands of jobs at risk at Port Talbot steelworks despite £500m state aid
Friday 15 September 2023 11:58 , Daniel O'Boyle
The Government is to pump up to £500 million into Britain’s biggest steelworks as part of plans to produce “greener” steel which could also hit thousands of jobs, sources have said.
Tata, the Indian conglomerate that owns the Port Talbot steelworks in South Wales, will use the funding to help switch the plant’s two coal-fired blast furnaces to electric arc versions that can run on zero-carbon electricity.
However, the company will also caution on Friday that the plans will lead to consultations over a “deep potential restructuring”.
The £1.25 billion furnaces are expected to be up and running within three years of getting regulatory and planning approvals, Tata Steel is expected to announce.
15 years on from Lehman Brothers, the fallout is still with us
Friday 15 September 2023 11:32 , Daniel O'Boyle
It is exactly 15 years since that never-to-be-forgotten day of high drama on 15 September 2008.
It began for me with a 4.30am call to be told that Lehman Brothers — one of the biggest, oldest and most respected names in Wall Street investment banking — had filed for bankruptcy.
Within hours bewildered staff were spilling out of the bank’s European headquarters in Canary Wharf clutching their possessions in cardboard boxes.
The collapse lit a fuse that detonated the biggest explosion in western financial capitalism since the Wall Street Crash. Within weeks the entire British banking system was on the brink of collapse.
Concerns thousands of jobs at Britain’s biggest steelworks could be lost
Friday 15 September 2023 10:45 , Daniel O'Boyle
There are concerns that thousands of job losses are set to be announced at Britain’s biggest steelworks under plans to produce “greener” steel.
Tata, the Indian conglomerate that owns the Port Talbot steelworks in south Wales, has been in talks with the Government for months over state aid worth hundreds of millions of pounds to help switch the plant’s two coal-fired blast furnaces to electric arc versions that can run on zero-carbon electricity.
The move could lead to around 3,000 job losses, mainly at Port Talbot, unions fear.
FTSE 100 has best week in 10 months
Friday 15 September 2023 09:31 , Simon English
HOPES that the global economy could shrug off long standing sluggishness and move into growth increased today with some decent economic statistics from China.
In the UK, the stock market ended a strong week on a high and economists bet that interest rates are peaking and inflation is tamed.
China’s financial lethargy has been seen as a drain on global confidence since it is the world’s second biggest economy.
Overnight, it reported that factory output and retail sales grew faster than expected in August.
The National Bureau of Statistics said industrial output rose 4.5% year-on-year, much stronger than the expected 3.9% rise.
Retail sales are also up -- 4.6% in August. And unemployment fell.
The FTSE 100 rose 50 points to 7724. It is up nearly 250 points this week and buyers are back in the market suggesting it could pass 8000 in a few weeks.
In New York, the flotation of Arm got off to a flyer, giving cause for optimism that the moribund market for new flotations could soon see an injection of life.
On its first trading day, Arm shares rose 25% leaving it valued at $65 billion.
The FTSE had its best week in 10 months.
H&M disappoints with ‘flattish’ sales
Friday 15 September 2023 09:19 , Daniel O'Boyle
Fast fashion giant H&M disappointed investors today as it revealed sales in the three months to 31 August were “flattish” compared to 2022 at SEK60.9 billion (£4.4 billion).
The Swedish business said its sales would have been up by 8% if not for its exits from Russia, Belarus and Ukraine. But the figures still fell short of the €63.5 billion expected by analysts.
It comes just days after Inditex, which owns rival Zara, posted much stronger results as first-half sales jumped by 13.5%.
Victoria Scholar, head of investment at Interactive Investor, said the difference came down to the two retailers’ supply chains: “Zara has a competitive advantage over H&M partly because it owns its factories, meaning it has a stronger ability to deliver the latest fashion trends to consumers and can adapt more quickly to changing demand.”
H&M Shares lost 4.5% to SEK164.4 in Stockholm this morning.
Arm’s Nasdaq debut impresses
Friday 15 September 2023 08:56 , Simon Hunt
British chipmaker Arm has made a strong debut on the Nasdaq exchange, with shares closing up at $63.59 late last night, some 25% higher than its $51 opening price.
The closing price gave the firm a market cap of $65 billion, the mid-point of the $60-70 billion range owner SoftBank is understood to have forecast it would be worth earlier in the year.
But today the company was poised to see its shares rise higher still, with the stock up another 7% to $68 in after-market trading overnight, indicating its value would rise to $70 billion.
Had Arm decided to list on the London Stock Exchange, that rise would have pushed it into the top 10 most valuable companies in the FTSE 100. The billions of dollars collected by SoftBank in the IPO would also have pushed the exchange up a notch, from 6th to 5th, in global rankings by total capital raised. But the decision to instead list in the US hangs doubts over the firm’s long-term future in the UK.
Charles Sturman, chair of Techworks, the Semiconductor trade association, said: “[SoftBank CEO] Masayoshi Son is certainly a good businessman but it’s a shame it’s not a UK-listed business.
“My concern is that any company that is foreign-owned is probably looking at investment decisions and prioritising its home country over satellite offices. It would have been helpful to have had a dual listing so at least the corporate structure remained committed to the UK.”
Market snapshot as FTSE climbs
Friday 15 September 2023 08:50 , Daniel O'Boyle
Take a look at today’s market snapshot as the FTSE rises higher after yesterday’s gains.
Housebuilders light up FTSE 100 as rally continues on hopes for peak interest rates
Friday 15 September 2023 08:25 , Michael Hunter
London’s main stock market made more progress on Friday, on growing hope that global central banks were near the end of their series of rate hikes, while concern about an economic slowdown in China also eased
The FTSE 100 rose over 60 points to 7,735.09 , extending its rally after one of the strongest rises of the year over the previous session, which came after the European Central Bank implied its interest rate rises were over.
The prospect of peak rates having arrived or being near faces a test next week from the Bank of England. which votes on the cost of borrowing on Thursday. A quarter-point rise from the current 15-year high of 5.25% is expected, with City experts on watch for signs that it could take base rates to their current peak.
In the meantime, some of the companies most sensitive to rising rates were at the top of the leaderboard. Housebuilders appeared across the leaderboard. Taylor Wimpey was up 3.6p at 122p. Persimmon gained 30p to 1101p. Online estate agency Rightmove was up 10p at 569p.
Games Workshop beats expectations again
Friday 15 September 2023 07:30 , Daniel O'Boyle
Games Workshop’s remarkable run of success continues, as trading in the three months to 27 August beat expectations yet again.
Revenue rose by 16.5% year-on-year to £127 million at the maker of Warhammer 40,000, and profit rocketed by 46% to £57 million.
Games workshop said the rise was “driven by healthy growth across all channels”.
Shareholders will receive a 50p dividend, bringing the amount paid so far this year to £1.95.
Before today, shares were already up 46% in the last year. Their value has grown 20-fold in the last seven years, valuing the business at £3.4 billion.
London rally expected to continue on growing hopes for interest rate peak
Friday 15 September 2023 07:21 , Michael Hunter
The FTSE 100 is expected to keep rising in opening trade, adding to the previous session’s surge, which followed a euro area rate hike that investors hope could be the last.
After the European Central Bank lifted rates by a quarter of a percentage point, it implied that the move might be the end of the current cycle of tighter monetary policy. It said rates were now at a level that if “maintained” should “make a substantial contribution to the timely return of inflation to the target.”
Analysis from Dutch bank ING said this week’s rate hike “will soon be remembered as the final hike of the ECB’s most aggressive rate hike cycle in history.”
The hope that peak rates may have arrived at a major central bank sent stock markets soaring. The rally came ahead of the Bank of England’s next meeting on Thursday. Investors will be on watch that any further move up from the UK’s 15-year peak on a base rates of 5.25% may also be the last hike.
After closing up almost 150 points at 7,673.08, one of the biggest rallies of the year, the FTSE 100 was expected to add a further 23 points today.
Recap:Yesterday’s top stories
Friday 15 September 2023 06:44 , Simon Hunt
Good morning. Here’s a summary of our top headlines from yesterday:
Arm shares opened $5 above their IPO price, though lower than what some analysts had predicted at the time of the offering, at $56.10. Here’s what investors are watching.
John Lewis stays in the red in the first half as sales of big tickets items such as furniture and electronics slump
Higher costs and interest bill send Lidl to £76 million loss despite 19% rise in sales
Shares tumble at online beauty and health retailer THG as losses widenfrom £107 million to £133 million
Trainline says strikes are costing it £5 - £6 million a day
