FTSE 100 Live Tuesday
- Jobs figures fuel rate cut bets
- Rolls secures reactor work
- Retailer back online after cyber hit
Market update: FTSE 100 higher as Rolls and M&S rally, FirstGroup up 6%
10:13 , Graeme EvansRolls-Royce, Marks & Spencer and stronger oil and housebuilding stocks today left the FTSE 100 index on the brink of a new record close.
The top flight rose 0.3% or 30.16 points to 8862.44, which compares with the peak of 8871 at the end of trading on 3 March and the same day’s intraday peak of 8908.
Persimmon, Barratt Redrow and Taylor Wimpey rose by between 2% and 4% to occupy three of the top four spots in the FTSE 100, boosted by the outlook for lower mortgage costs.
The latest deterioration in the UK labour market means economists expect another Bank of England interest rate cut in August before further quarterly moves in November and beyond.
Today’s 109,000 fall in payrolled employees for May was the largest monthly fall outside of the Covid-19 pandemic while the unemployment rate rose to 4.6%.
Wage growth also slowed by more than expected, potentially giving the Bank of England leeway to loosen monetary policy.
The housebuilders also benefited from a robust update by Bellway, which rose 5% or 123.8p to 2797.8p in the FTSE 250 after reporting a robust spring selling season.
Elsewhere in the FTSE 100, Rolls-Royce traded above 900p for the first time after it was selected by the government to build the UK’s first small modular reactors (SMR).
Rolls chief executive Tufan Erginbilgic said of the agreement: “This is a very significant milestone for our business and Rolls-Royce SMR.
“It is a vote of confidence in our unique nuclear capabilities, which will be recognised by governments around the world.
Rolls shares touched a new high of 912.4p before settling 2% or 19.2p higher at 907.4p.
Marks & Spencer shares today rose 3% or 10.7p to 370.5p after the retailer’s online operations resumed following a cyber hack more than six weeks ago.
It is the most encouraging sign yet that M&S is finally getting to grips with an attack that has dealt a £300 million hit to operating profit for this year.
Another factor in the FTSE 100 improvement was the performance of the energy sector after Brent Crude traded at a six-week high above $67 a barrel.
This lifted BP by 5.8p to 368p and Shell by 50.5p to 2555.5p.
On the fallers board, Next retreated 215p to 12,625p and NatWest declined 4.8p to 521.8p.
The FTSE 250 index rose 0.4% or 80.58 points to 21,366.49, with FirstGroup among the best performing stocks after a 6% rise on the back of annual results.
The group, which runs Avanti West Coast, recorded a pre-tax profit of £169.6 million for the year to March, swinging from a £24.4 million loss a year earlier after bus revenues rose 7% to more than £1 billion.
AJ Bell investment director Russ Mould said: “The latest results from FirstGroup provide evidence to investors there is life after rail nationalisation for the business.
“The bus division is proving to be the engine of growth as the company prepares for the railway network to return to broad public ownership.”
Hochschild Mining fell back 20% or 61p to 240.2p after heavier-than-usual seasonal rainfall led to sharp cut in output for its Mara Rosa gold mine in Brazil.
M&S restarts online trading, shares higher
09:05 , Graeme EvansMarks & Spencer shares today rose 3% or 10p to 369.8p after the retailer’s online operations resumed following a cyber hack more than six weeks ago.
The company said ”a selection of our best-selling fashion ranges are now available online for home delivery to England, Scotland and Wales - but not Northern Ireland - from today”.
It is the most encouraging sign yet that M&S is finally getting to grips with a cyber attack that will cost it £300 million in operating profits this year, although about half of that is expected to be offset by insurance and other measures.
More rate cuts seen following jobs market downturn
09:02 , Graeme EvansLabour market figures showing a four-year high in the jobless rate alongside slower wage growth today fuelled the City’s interest rate cut expectations.
James Smith, ING developed markets economist, said: “The UK jobs market might be turning a corner – and not in a good way.
“What stands out from the latest hiring numbers is a sharp 109,000 fall in payrolled employees in May. That is the largest monthly fall outside of the Covid-19 pandemic, since the data began in 2014.
“However, there’s a fairly significant caveat, which is that this data has a habit of being revised up later on.”
Smith said the figures should help cement another interest rate cut in August and further quarterly cuts in November and into 2026.
He added: “We wouldn’t totally rule out the Bank of England moving faster, particularly because we are more upbeat about the inflation outlook.
“But recent commentary has suggested the bar to speeding up is set relatively high. Officials tend to point to wage growth, which, despite the material cooling in hiring conditions over the past couple of years, has stayed stubbornly high.”
Rolls-Royce secures UK reactors project, shares rise
08:49 , Graeme EvansRolls-Royce shares are trading above 900p for the first time after the group was named preferred bidder to build the UK’s first small modular reactors (SMR).
The company has been selected by the government to build three SMR units, with the project set to support up to 3000 new skilled jobs and power the equivalent of around three million homes.
Rolls chief executive Tufan Erginbilgic said: “This is a very significant milestone for our business and Rolls-Royce SMR.
“It is a vote of confidence in our unique nuclear capabilities, which will be recognised by governments around the world. It is also evidence that the strategic choices we have made in the transformation of Rolls-Royce are delivering.”
The shares rose 2% or 17.4p to 905.6p.
FTSE 100 near record as housebuilders rally, oil giants up 2%
08:31 , Graeme EvansThe FTSE 100 index has risen by a better-than-expected 0.4% or 36.13 points to 8868.41, boosted by a strong session for housebuilding stocks.
Hopes that softer wage growth will allow more interest rate cuts lifted Persimmon by 3% or 41.5p to 1344p and Taylor Wimpey by 2% or 2.15p to 118.5p.
The improvement also reflected today’s trading update by FTSE 250-listed Bellway, which rose 128p to 2802p after reporting a robust spring selling season.
It lifted guidance for volume output and the average selling price in the year to July.
Elsewhere in the FTSE 100, Rolls-Royce traded above 900p for the first time and the oil giants Shell and BP rose 2% after the Brent Crude price topped $67 a barrel.
The FTSE 100 index is well placed to break the record close set in March of 8871 and is within sight of the intraday high of 8908 set the same day.
Bellway reports robust trading, order book higher
07:50 , Graeme EvansHousebuilder Bellway today reported a robust spring selling season, leaving it on track for “strong growth” in volume output and profits in the July financial year.
The private reservation rate per outlet per week was in line with the prior year at 0.61 in the quarter to 1 June, with the order book up by 7.7% to 5759 homes.
The overall average selling price by the end of the financial year is now anticipated to be around £315,000, up from previous guidance of around £310,000. This is mainly due to changes in product mix.
Volume output in the financial year is now expected to be between 8600 and 8700 homes compared with 7654 in the 2024 financial year.
Chief executive Jason Honeyman said: "Bellway has delivered a solid trading performance, and we are on track to deliver strong growth in volume output and profits in the full financial year.
“We have a healthy forward order book and outlet opening programme, which will serve as a platform for further growth in 2026.”
Shares rose 4% or 112p to 2786p.
Consumer spending slows as confidence falters
07:34 , Graeme EvansConsumers recorded the slowest spending growth of the year in May, according to the British Retail Consortium (BRC)-KPMG Retail Sales Monitor.
Sales of fashion and full-price big ticket items were held back by weaker confidence, although gaming bucked the trend due to popular new releases.
Total retail sales across the UK rose 1% year-on-year in May, against growth of 0.7% a year ago.
BRC chief executive Helen Dickinson said: “Consumers put the brakes on spending, with the slowest growth in 2025 so far.”
Jobless rate rises as wage growth slows
07:11 , Graeme EvansThe UK’s unemployment rate rose to 4.6% in the period between February and April, up from 4.5% and the highest level since August 2021.
The latest labour market statistics by the Office for National Statistics (ONS) also show an increase in May’s claimant count to 1.735 million.
The estimated number of vacancies in the UK fell by 63,000 in the quarter to 736,000 in March to May.
Annual growth in average regular earnings excluding bonuses was 5.2% in the February to April period, down from 5.5% previously and the 5.4% forecast.
The ONS said annual growth in real terms adjusted for inflation was 2.1% for regular pay and 2.3% for total pay in the February to April period.
Capital Economics said: “With payrolls falling, the unemployment rate climbing and wage growth easing, today’s labour market release leaves us more confident in our view that the Bank of England will cut interest rates further than investors expect, to 3.5% next year.”
FTSE 100 set for steady start, Asia markets mixed
07:00 , Graeme EvansOptimism over ongoing US-China trade negotiations helped to keep Wall Street markets on an even keel during Monday trading.
The Nasdaq Composite rose 0.3%, while the S&P 500 clung to a position above 6000 and the Dow Jones Industrial Average finished slightly lower.
It was a similar story in London, where the FTSE 100 index fell 5.63 points at 8832.28. The top flight is set start today’s session about 20 points higher, compared with earlier expectations for a flat performance.
Asia markets are mixed after the Nikkei 225 lifted 0.4% in Tokyo but the Hang Seng index fell 0.4%.
