FTSE 100 Live: Shares rebound as interest rate fears ease, Bitcoin surges, UK unemployment at 4.2%

 (Evening Standard)
(Evening Standard)

The UK's unemployment rate held steady at 4.2% today, the ONS revealed, as it introduced a new methodology to count the jobless population.

Meanwhile the FTSE 100 is lower for the fifth straight day, and has now lost more than 300 points in the space of a week, with Barclays leading the fallers as its results disappointed the City.

Why has the Bitcoin price doubled since January?

17:40 , Simon Hunt

The price of Bitcoin has doubled since the start of the yearin signs of a resurgence of investor confidence in the cryptocurrency after itsvalue tumbled last year.


Bitcoin rose more than 3% today to touch the $34,500 mark.It is up 29% in the past month and up 104% since January, though it remainswell down on the $64,400 peak it hit in November 2021. Ethereum has also seen abounce-back, with its price up 13% in the past month and 49% since the start ofthe year.


A combination of economic and regulatory factors are thoughtto be behind the lift in investor confidence.


Simon Peters, analyst at trading and investment platformeToro, said: “The key driver for this positive price move is the rumoured newsaround a spot ETF approval last Monday. Although this proved to be 'fake news'it was perhaps a preview or a taster of what is to come should a US based spotbitcoin ETF be approved.”

read more here

FTSE ends losing streak, closes at 7,389

16:39 , Daniel O'Boyle

The FTSE 100 ended a four-day losing streak today, closing at 7,389.70.

That still leaves it down 285 points in the space of a week, however.

The index rose as new economic data bolstered confidence that interest rate hikes have peaked.

ASOS delays results over audit testing

16:15 , Daniel O'Boyle

ASOS has delayed its financial results in order to allow auditors at PwC to "to complete its planned testing".

The fast fashion retailer was due to report its results today.

"PwC has assured the Board that the outstanding procedures are limited in nature," it said.

The compan ysaid revenue for the year should come to £3.5 billion, while its underlying losses should be no more than £31 million.

Shares are down 2.5% today to 391.2p.

City bets that interest rates have already peaked as data shows UK economy slowing

15:25 , Daniel O'Boyle

City traders are betting that interest rates have now peaked, as new economic data suggests the Bank of England’s bitter medicine is continuing to slow down demand.

Markets had seen the question of whether the Bank of England’s interest rates have peaked as effectively a 50/50 call ever since it took the decision to pause its cycle of 14 consecutive rate hikes last week.

But as the Bank’s 2 November decision approaches, confidence has grown that 5.25% is likely to be the peak.

Markets are pricing in a roughly two-in-three chance that rates have already peaked. The implied odds of a pause at next week’s meeting are now greater than 90%.

Read more here

US market snapshot

15:11 , Daniel O'Boyle

Take a look at today's US market snapshot as traders await earnings updates from tech megacaps Alphabet and Microsoft after today's closing bell.

Telecoms giant Verizon, which reported its earnings today, is among the top risers.

Bankers bonus cap scrapped in post-Brexit shake-up

14:40 , Daniel O'Boyle

A cap on bonuses for bankers is set to be scrapped in a bid to make the UK a more attractive financial hub post-Brexit, financial regulators have ruled.

The decision will remove the limit on bankers’ annual payouts from the end of October, the Financial Conduct Authority (FCA) and Bank of England’s Prudential Regulation Authority (PRA) said.

Current rules limit bonuses to 100% of the salary for employees of banks or building societies, or double with shareholder approval.

Read more here

Lunchtime market snapshot

13:46 , Daniel O'Boyle

The FTSE 100 has recovered slightly after falling as low as 7327 this morning, while the price of Bitcoin continues to surge.

Barclays raises fears for jobs after investment banking slowdown

12:59 , Daniel O'Boyle

The spectre of wide City job cuts was raised today as Barclays said it was looking to reduce costs as it tries to move on from the regime of former chief executive Jes Staley.

The high-street lender suffered a slowdown at its investment bank and a rise in bad debts — profits fell 4% in the third quarter to £1.9 billion.

Today new boss CS Venkatakrishnan said he was looking to cut costs with more details to come in February.

Read more here

Gaumont cinema site reborn

11:59 , Jonathan Prynn

THE former Gaumont cinema site in Chelsea has been reborn as a £235million commercial and cultural centre with offices, 47 apartments, a rooftop bar and a 600-seater Curzon picturehouse.

The 220,000 sq ft mixed use development at 196-222 King’s Road — known as The Gaumont — is local landlord Cadogan’s biggest scheme since the Duke of York Square project 20 years ago.

It was designed by Belgravia-based architects PDP Studio with construction led by Wates Group. Cadogan CEO Hugh Seaborn said: “The Gaumont is a major part of a wider revitalisation plan for one of the world’s most famous high streets.”

130,000 'London living wage' workers to receive 10% pay rise

11:10 , Daniel O'Boyle

Over 130,000 Londoners are set to receive a 10 per cent pay boost, as the London Living Wage rises from £11.95 to £13.15.

The benefitting workers are employed by the capital’s 3,500 organisations signed up to the Living Wage Foundation (LWF).

The foundation sets a new ‘real living wage’ every year, which is higher than the Government’s ‘national living wage’. The latter used to be called the minimum wage.

The LWF says its ‘real living wage’ is a more accurate calculation of rising living costs - and it sets a special rate for London workers to reflect the capital’s higher prices. Outside London, the rate is increasing from £10.90 to £12.

Read more here

Bunzl shares under pressure in weaker FTSE 100, Angling Direct up 6%

10:24 , Graeme Evans

The performance of Bunzl shares highlighted the risk averse mood of investors today as pressure on the FTSE 100 index continued.

The outsourcing firm, which supplies supermarkets, factories and hospitals with essential day-to-day items, slumped 5% despite sticking to full-year guidance after a “very strong” margin performance in the third quarter.

Boss Frank van Zanten pointed to the strength and resilience of the group's business model, noting that revenues are 29% higher than pre-Covid levels.

But investors focused on the quarter’s 8.8% year-on-year decline due to adverse currency moves and unwinding of demand for pandemic-related hygiene products.

Shares fell 146p to 2768p, leaving the company near where it was prior to improved guidance in August’s interim results and down from 3200p seen in April.

Bunzl was joined by Barclays at the top of the fallers board as the FTSE 100 index slipped another 27.02 points to a fresh two-month low of 7347.81.

Other blue-chip fallers included Rolls-Royce, which declined 2.2p to 201.3p, and catering giant Compass with a drop of 22p to 2030p.

On the risers board, mining stocks recovered yesterday’s lost ground as Rio Tinto added 88.5p to 4979p following a “buy” note by analysts at Barclays.

The FTSE 250 index fell 46.67 points to 17,012.32, with the best performer Plus500 after forecasting 2023 results in line with the City’s recently upgraded expectations. Shares surged 92p to 1399p.

On the fallers board, another year of profits growth at IT business Softcat failed to prevent shares shedding 11% or 149p to 1256p as investors reacted to guidance that 2024’s performance will be second half weighted.

On AIM, Angling Direct reeled in new investors as the fishing tackle retailer said it was confident of continued UK sales momentum.

Revenues increased by 11.4% to £43.3 million in today’s half-year results, rising to 13.9% in recent weeks. Shares jumped 6% or 2p to 35p.

Hipgnosis board unable to find better offer in $440m song sale

10:18 , Daniel O'Boyle

The board of the Hipgnosis Songs Fund says it has been unable to find a better offer for the collection of hits it agreed to sell to a sister fund for $440 million (£359 million), as a crucial vote on its future approaches.

The fund known for buying up the rights to pop stars’ work last month revealed plans to offload songs by artists such as Nelly, Rick James and Shakira to another fund, owned by Blackstone and managed by a team led by Hipgnosis founder Merck Mercuriadis.

The Hipgnosis fund said it sold the songs to return cash to shareholders because its share price didn’t reflect the value of its portfolio. But the deal drew criticism from some shareholders, who raised questions over the price and the connections between the two funds.

Read more here

UK private sector in decline again

09:37 , Daniel O'Boyle

The UK private sector remains in decline, according to an influentiakl business survey, though the decline in manufacturing slowed slightly.

The S&P Global / CIPS Flash PMIfor the UK came to 48.6 for October, effectively flat compared with September. Any figure below 50 represents decline.

The dominant service sector declined again, with a reading of 49.2. Manufacturing also remained in decline, but its reading of 45.2 was better than September.

Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, warned the figures could be consistent with a recession this year: “The UK economy continued to skirt with recession in October, as the increased cost of living, higher interest rates and falling exports were widely blamed on a third month of falling output.”

Barclays beats profit forecasts but cover for bad loans rises


Barclays has beaten profit expectations for the latest quarter but revealed it set aside more than £430 million to cover expected loan losses.

The banking giant said it made a pre-tax profit of £1.9 billion in the three months to September, coming in slightly ahead of analysts’ expectations but below last year’s £2 billion profit.

Higher interest rates and weaker house prices prompted the bank to increase its credit impairment charges to £433 million for the period, up from £381 million last year.

Read more here

CAB payments share price halves after revenue warning

08:41 , Simon Hunt

London fintech CAB payments saw its share price tank more than 50% today, bring its market cap to just a third of its IPO value after it warned of a slump in sales.

The Sutton-based business, which debuted on the stock exchange in July raising hopes to the end of an IPO drought today said its fourth quarter revenue was set to come in 17% below previous guidance.

CAB payments said: "In recent weeks, the company has seen a number of changes to the market conditions in some of its key currency corridors, on top of the ongoing uncertainties surrounding the Naira, which are impacting both volumes and margins

"These market conditions are compressing margins and reducing trading volume.  These challenges are recent but continuing, and coincide with the traditionally strong fourth quarter."

Banking shares fall on Barclays guidance, fintech CAB slides

08:35 , Graeme Evans

Banking shares are under pressure after Barclays trimmed its full-year UK net interest margin guidance to between 3.05% and 3.1%.

Lloyds and NatWest fell 2% and 3% respectively, while Barclays slumped 7% or 9.6p to 134.5p following the bank’s third quarter results.

The wider FTSE 100 index steadied after its recent losses, sticking close to its opening mark with a decline of 5.59 points to 7369.24. Other blue-chip fallers included the outsourcing firm Bunzl, which dropped 4% or 115p to 2799p despite posting an in-line trading update.

Mining stocks rallied after yesterday’s losses, with Rio Tinto up 97.5p at 4988p and Anglo American 26.5p higher at 2058p after a third quarter production update.

The FTSE 250 index rose 15.47 points to 17,074.46, led by Plus500 after its latest trading update helped shares to rally 7% or 95p to 1402p. On the fallers board, CAB Payments halved in value as the money transfer firm reported disappointing recent volumes.

Market snapshot: FTSE flat, bitcoin surges

08:24 , Daniel O'Boyle

The FTSE 100 is flat this morning, while Bitcoin has continued its climb and has now doubled in value since the start of the year.

Take a look at today's market snapshot.

ScS sofa chain to be bought by Italians in £99 million deal

07:44 , Michael Hunter

ScS, the sofa and home furnishings chain, is being bought for £99 million by Italy's Poltronesofà.

The cross-border deal comes after drop-off in merger and acquisitions in London and will come as a welcome sign of life in a key market to the City's fortunes. According to data from EY, the number of international M&A deals was down over 14% in the second quarter of 2023 year-on-year.

The deal is priced at 280p per share, including a 10p dividend from ScS, which investors will still get after the merger, which is backed by ScS's board.

ScS's stock closed at 169p yesterday.

ScS has around 100 stores from Aberdeen to Plymouth, having started in 1894 in Sunderland.

The deal will bring Poltronesofà into the UK. It designs its own furniture, and began in Reggio Emilia in 1995 and now claims to be Italy's leading sofa seller. It has 167 stores in it own country, as well as 106 stores in France and 27 elsewhere in Europe.

Alan Smith, Non-Executive Chair of ScS, said:

"The ScS Board believes Poltronesofà will bring significant benefits to ScS through its broad industry expertise in addition to providing the necessary capital that would accelerate our current strategy, albeit in a private rather than public sphere."

Barr buys tropical drinks maker Rio

07:36 , Simon Hunt

Irn Bru maker AG Barr has bought tropical drink brand Rio in a £12.3 million deal.

Rio, which was previously owned by brewer and pub company Hall and Woodhouse, a 245-year-old company that generated turnover of £109 million in 2022.

The deal marks the latest in a string of acquisitions by Barr in recent months including energy drink boost and oat milk drink Moma.

Roger White, CEO of AG BARR, said: "As brand builders we are delighted to acquire the Rio brand and secure its long-term position in our wider portfolio. This allows us to realise the benefits of full brand ownership and support Rio's continued growth.  This acquisition is a further positive indication of our strategic ambitions."


FTSE 100 struggles set to continue, gold price higher

07:20 , Graeme Evans

The FTSE 100 index is set to open another session in the red after weaker commodity stocks last night drove London’s top fight to a two-month low.

CMC Markets expects the FTSE 100 to open 12 points lower at 7362, mirroring the handover from mixed performances for US and Asia markets.

Technology stocks benefited towards the end of the Wall Street session after the 10 year Treasury yield fell back from its 16-year peak above 5%.

The reversal came after billionaire investor Bill Ackman revealed he had covered his bond short position as the US economy was weaker than it looked.

His move followed several weeks where expectations that the Federal Reserve and other central banks will keep interest rates high have put pressure on bond valuations.

Last night’s drop in yield helped the tech-focused Nasdaq Composite finish in positive territory whereas the Dow Jones Industrial Average closed 0.6% lower.

Brent Crude today stood close to $90 a barrel, while gold edged up 0.2% to $1976.

Unemployment rate at 4.2%

07:10 , Daniel O'Boyle

The UK unemployment rate for August came to 4.2%, the ONS said, in its first month using a new method to calculate how much of the population is without a job.

ONS director of economic statistics Darren Morgan said: “Today we have produced a new metric, produced by adjusting our headline survey estimates using robust administrative data sources that we receive from other government departments. This maintains the accuracy of our key statistics.

“This new metric shows that in the latest period the employment rate was down a little, with small rises in the rates for both unemployment and those neither working nor looking for work.

Recap: Yesterday's top stories

06:29 , Simon Hunt

Good morning. Here's a summary of our top headlines from yesterday: