FTSE 100 Live Wednesday
- US-China talks bolster markets
- Ricardo backs £281m takeover
- Pub chain toasts profit rise
Market update: FTSE 100 on course for record, housebuilders rally
10:17 , Graeme EvansProgress on US-China trade talks today kept the FTSE 100 index on the front foot in a session when another London-listed company headed for the exit.
Asia markets set a positive tone after the US and China said they had agreed a framework restoring the trade truce reached in Geneva last month.
Export curbs on rare earths and magnets are expected to be resolved, but with little further detail the breakthrough was met with guarded optimism in Europe.
The FTSE 100 rose 17.11 points to 8870.19, which is broadly in line with the record close set in March. The performance was mirrored in Paris and Frankfurt.
Asia-focused insurer Prudential led London’s top flight with a gain of 23p to 898.8p, while lender Standard Chartered improved 20p to 1168p.
Glencore lifted 6.75p to 296.75p, which also reflected the support of analysts at Jefferies after they named the miner among their top picks.
The housebuilding sector added to yesterday’s strong session amid speculation today’s spending review will include additional support for affordable homes.
Brownfield regeneration builder Berkeley rose 86p to 4352p, while Barratt Redrow lifted 8.7p to 484p and Persimmon added 26p to 1406p.
BT Group also added 3.75p to 180.05p amid speculation that it is considering a bid for broadband rival TalkTalk.
On the fallers board, Marks & Spencer fell 4.3p to 369.1p and JD Sports Fashion reversed 1.4p to 80.5p as traders reviewed a mixed update by Zara owner Inditex.
The FTSE 250 index rose 0.5% or 103.24 points to 21,492.70, led by a 10% bounce for partnerships-led housebuilder Vistry. The shares hit 719.4p, up 65.4p.
At the wrong end of the mid-cap benchmark, bricks supplier Ibstock slid 13% or 24.2p to 169p after downgrading profit guidance.
It said activity levels are well above the prior year but that this has been offset by revised assumptions on selling prices and the cost of bringing kilns back into action.
Peel Hunt, which has a price target of 190p, described the update as disappointing but said the group is well placed to rebound when the building market picks up.
In the latest round of takeover action, engineering firm Ricardo is to be bought by a Canadian consulting giant in a £281 million deal.
Ricardo, which was founded in 1915 by engine design pioneer Sir Harry Ricardo and joined the stock market in 1962, has agreed to the takeover by WSP Global. Its shares rose 25% or 83.5p to 418.5p.
Assura backs £1.7bn KKR takeover
09:22 , Graeme EvansUS private equity giant KKR today took control of the takeover battle for NHS landlord Assura after raising its bid to £1.7 billion.
Assura said it had reached an agreement on a “best and final” bid led by Kohlberg Kravis Roberts (KKR) and Stonepeak Partners.
The medical property firm sparked a bidding war when it said it had agreed to be bought by the consortium back in April for a takeover price of £1.61 billion.
But fellow FTSE 250-listed healthcare investor Primary Health Properties then tabled a higher bid worth £1.68 billion, saying its offer was “compelling”.
Fuller's toasts profits rise, chairman to step down
09:18 , Graeme EvansFuller, Smith & Turner has overcome a “volatile” market backdrop to notch up higher sales and profits, as it announced its chairman of 18 years will retire next month.
The group, which has an estate of 185 managed pubs and hotels and 153 tenanted inns, posted a 32% jump in underlying pre-tax profits to £27 million for the year to March 29.
It also announced that Michael Turner – chairman and member of one of the three founding families – would retire at the AGM in July following 18 years in the post and a 47-year career with the group.
Ricardo backs £281m takeover approach
08:51 , Graeme EvansOne of Britain’s oldest independent engineering companies today accepted a takeover offer from a Canadian bidder.
Ricardo, which was founded in 1915 by engine design pioneer Sir Harry Ricardo, is being sold to Montreal based consulting giant WSP Global in a £281 million cash deal.
Shoreham-on-Sea based Ricardo has around 2700 employees in more than 20 countries. The company was formed as Engine Patents Limited by Sir Harry Ricardo during the First World War in February 1915. It joined the stock market in 1962.
Inditex sales figures put pressure on retail stocks
08:46 , Graeme EvansThe shares of Marks & Spencer and JD Sports Fashion have fallen 2% after sales figures by the Zara owner Inditex came in short of expectations.
Europe’s largest fashion retailer said store and online sales between May 1 and June 9 rose 6% compared with the same period last year. This compared with 12% growth the previous year.
Sales for the February to April quarter rose to 8.3 billion euros (£7 billion).
This was 4.2% higher than the same period a year ago, at constant currency rates, but slightly fell short of analysts’ expectations for the period.
The read across for the UK fashion sector meant M&S shares fell 5.9p to 367.5p and JD Sports lost 1.5p to 80.5p.
Miners drive FTSE 100 higher, Prudential up 2%
08:26 , Graeme EvansAsia-focused stocks today led an improved FTSE 100 index after sentiment was lifted by the framework agreement reached at US-China trade talks.
Standard Chartered rose 2% or 24.5p to 1172.5p and Prudential added 18.2p to 894p, while Anglo American and Glencore cheered 1.5% among the miners.
Other stronger stocks included Lloyds Banking Group, which added a penny to 76.7p, and BT Group after a rise of 2p to 178.3p.
The FTSE 100 rose 14.22 points to 8867.30, which compares with March’s record close of 8871. The FTSE 250 added 21.26 points to 21,410.72.
Markets wary despite US-China trade progress
07:53 , Graeme EvansGlobal markets have given a cautious response after a framework agreement was reached at US-China trade talks in London.
IG said: “While negotiators agreed to address export curbs on rare earths and magnets, specifics remain scarce, fuelling scepticism about lasting progress.
“Investors, wary after previous disruptions, reacted modestly: Asian equities, especially in South Korea and China, rose on hopes of reduced protectionism and potential policy stimulus, while European markets and US futures dipped.”
Currency movements have been muted, with the dollar steady and the yuan largely unchanged, reflecting uncertainty over the durability of the truce.
Heathrow expansion in focus after record month
07:42 , Graeme EvansHeathrow Airport today called for “an honest conversation” about expansion after another record month for passenger numbers.
More than 7.2 million passengers travelled through its four terminals last month, up 0.4% from a year ago and its busiest May on record.
A Heathrow spokesperson said: “As these record numbers become the norm, it’s time to start an honest conversation about the challenges this presents for an already space-constrained yet highly efficient hub.”
City on standby as Chancellor sets out spending plans
07:37 , Graeme EvansMarkets will be on standby for the fallout from the Chancellor’s Spending Review, which will be the first to cover multiple years since 2015.
As well as fine-tuning growth projections, Deutsche Bank economists will be looking at the sustainability of spending policy against a backdrop of potential downgrades to productivity growth, global trade tensions and a looser labour market.
The bank said even more difficult decisions lay ahead for the Chancellor.
It said: “On our estimates, we see a fiscal hole of near £10-15 billion emerging ahead of the Autumn Budget.
“Tax rises, we think, are inevitable as spending cuts are pushed to its political limits. It could be a noisy few quarters as we move closer to the Chancellor's second budget.”
US inflation rate seen higher amid tariff pressures
07:14 , Graeme EvansInflation figures due later in the US are set to show the consumer prices index (CPI) rose on an annual basis to 2.5% in May, from 2.3% the previous month..
Julien Lafargue, chief market strategist at Barclays Private Bank, said: “This CPI report could show the first signs of a tariff-induced pickup in inflation.
“Or at least this is what the consensus seems to imply as core CPI is expected to move up to 0.3% month-on-month versus 0.2% in April.
The good news though is that lower energy prices should keep the headline figures in check, at around 2.5% on an annual basis.
“For the US Federal Reserve, this report is unlikely to move the dial as the question is not so much whether the central bank will cut interest rates further this year but rather when – September or October.”
Asia stocks rally after robust US session, FTSE 100 seen lower
07:01 , Graeme EvansAsia markets are higher after signs of progress on US-China trade talks helped Wall Street to finish in positive territory last night.
The S&P 500 index and Nasdaq Composite rose 0.6%, while the Dow Jones Industrial Average added 0.3%.
In Asia, the Hang Seng index in Hong Kong is up by 1% and the Nikkei ahead by 0.5%.
The FTSE 100 index closed yesterday 20.80 points or 0.2% higher at 8853.08, having earlier risen as high as 8886.06.
IG Index futures point to a fall of about 0.1% at today’s opening bell.
As well as the Chancellor’s spending review, the focus of today’s session is likely to be on this afternoon’s release of US inflation figures. The annual rate is set to show an increase to 2.5% from April’s 2.3%.
