FTSE 100 Live 16 April: Index closes down 1.8% in worst day in nine months
Global stock markets are under pressure today, with Lloyds and Marks & Spencer among the big fallers in the FTSE 100 index.
The selling was sparked by a technology-led slump on Wall Street, where traders are worried about higher-for-longer interest rates.
Labour market figures offered mixed signals, with a surprise jump in the jobless rate to 4.2% but wage growth still running hot.
FTSE 100 Live Tuesday
Stocks slump amid US rate cut fears
Unemployment rate in surprise rise
Dr Martens shares slide on new warning
Superdry to delist in restructuring move
Powell speech this evening to be closely watched
Tuesday 16 April 2024 16:58 , Daniel O'Boyle
Jerome Powell will speak this evening, and markets will hope he will offer some reassurance on interest rate cuts after recent bad news.
His speech comes as US two-year yields near 5% again, and the S&P 500 falls further to 5050.
If he’s more hawkish than expected, this week’s sell-off could extend.
FTSE 100 closes down 1.8%
Tuesday 16 April 2024 16:38 , Daniel O'Boyle
The FTSE 100 closed at 7820.36, down a huge 1.8%.
London’s top flight lost the most since July 2023, but avoided its worst day since last year’s banking crisis.
Almost every stock on the index was down, with Croda a rare exception
B&M plans more store openings as yearly sales jump
Tuesday 16 April 2024 16:16 , Daniel O'Boyle
Discount retailer B&M has revealed its sales jumped by a tenth over the past year, as cost-conscious shoppers continued to hunt for deals.
The chain, which sells everything from household furniture and DIY products to cupboard staples and clothing, said it had a “relentless” focus on low prices for everyday products.
B&M European Value Retail, which also incorporates Heron Foods and B&M in France, said group revenues increased by 10.1% to £5.5 billion in the year to the end of March, compared with the previous year.
IMF: World economy ‘resilient’ but conflict risks food and energy price hikes
Tuesday 16 April 2024 16:02 , Daniel O'Boyle
The global economy has been “remarkably resilient” over the past two years but the escalation of conflict in the Middle East risks pushing up food and energy prices across the world, according to the International Monetary Fund (IMF).
The UK will eke out slower growth this year than previously thought and remain the second-worst performer in the G7 group of advanced economies, new forecasts showed.
The IMF said the global economy has had an “eventful” journey in the years since the Covid-19 pandemic.
Inflation to fall to lowest since September 2021 but Bank of England might not cut interest rates until Autumn
Tuesday 16 April 2024 15:51 , Daniel O'Boyle
The UK’s inflation rate is set to fall to its lowest level since September of 2021, but markets suggest the Bank of England still may not cut interest rates until the Autumn.
March figures released this morning are expected to show another decline in the rate of price rises. A poll of economists for Refinitiv suggests the inflation rate could decline to 3.1%, getting ever-nearer to the 2% target. It’s likely inflation will continue to fall in the next couple of months, as the lower energy price cap factors into calculations, and food prices are compared to the sky-high levels seen in late spring last year.
The latest London Stock Exchange buyout isn't the biggest, but might be the most disappointing yet
Tuesday 16 April 2024 15:32 , Daniel O'Boyle
There is something of a parable of our times about the TClarke takeover deal unveiled this morning.
The business, which has always been headquartered in London and listed here since 1949, was a genuine pioneer.
When impresario Richard D’Oyly Carte decided that his audiences at Savoy Theatre should be the first in the world to enjoy electric lighting it was to Tommy Clarke that he turned to install the wiring.
FTSE 100 plunges further, down 2%
Tuesday 16 April 2024 14:52 , Daniel O'Boyle
The FTSE 100 is now down a huge 164 points, or 2.1%, after the hoped-for US rebound failed to materialise.
It’s barely above the 7800 mark, after being above 8000 at one point yesterday.
Today’s fall would be the worst since March 2023 in points terms, eclipsing a 162-poiunt plunge in July.
IMF cuts UK forecasts
Tuesday 16 April 2024 14:10 , Daniel O'Boyle
The International Monetary Fund has cut its forecasts for UK growth from 0.6% to 0.5% this year.
It comes as the IMF listed its global growth forecast to 3.2%..
Market snapshot: FTSE imrpoves, still down 1%
Tuesday 16 April 2024 13:41 , Daniel O'Boyle
The FTSE 100 is well off the lows it reached this morning, but is still down more than 1% for the day
Jeremy Hunt gets £12billion more 'headroom' so could slash another 2p off National Insurance, says IFS
Tuesday 16 April 2024 13:38 , Daniel O'Boyle
Jeremy Hunt has got £12billion more “fiscal headroom” so he could be tempted to slash another 2p off National Insurance, say leading economists.
The Institute for Fiscal Studies said the public finances moving into the new fiscal year 2024/25, and looking ahead, means that the Chancellor could deliver a third 2p cut to NI, possibly just before an autumn general election, while still meeting one of his key rules.
It explained that on 6 April, the UK entered a new tax year and the Government’s forecast horizon rolled forward by a year.
EasyJet suspends Israel flights until October
Tuesday 16 April 2024 12:54 , Daniel O'Boyle
EasyJet has extended its suspension of flights to and from Israel for six months following Iran’s missile and drone barrage aimed at the country.
The Luton-based airline announced it will not resume its Israel operations before late October.
An easyJet spokesman said: “As a result of the continued evolving situation in Israel, easyJet has now taken the decision to suspend its flights to Tel Aviv for the remainder of the summer season until 27 October.
Top recruiters flag tough conditions in jobs market as incomes fall
Tuesday 16 April 2024 12:24 , Daniel O'Boyle
Recruiters Robert Walters and Hays have flagged that tough conditions have persisted in the jobs market, as both firms reported declining income and said they had axed staff to cut costs.
Robert Walters said its gross profit dropped by 16% to £81 million in the three months to the end of March, compared with the previous year.
In the UK, profits tumbled by a fifth as it cautioned that trading conditions remain challenging.
Market snapshot
Tuesday 16 April 2024 12:03 , Daniel O'Boyle
Take a look at the latest market snapshot with the FTSE 100 still down by more than 100 points
UK firms relying more on overseas markets for sales growth – survey
Tuesday 16 April 2024 11:56 , Daniel O'Boyle
More UK businesses are relying on international markets to grow their sales, as they face tougher economic conditions at home and post-Brexit trade barriers, a survey has found.
More than a quarter of firms who have taken their businesses to markets overseas now expect more than half their revenue to come from abroad in the year ahead, according to Santander UK’s trade barometer.
That is more than double the amount who said so two years ago.
Just two FTSE 100 risers
Tuesday 16 April 2024 11:08 , Daniel O'Boyle
Amid a huge selling day, only two FTSE 100 firms are up. Croda International and Centrica.
London’s top flight is currently down 121 points at 7,844.35.
FTSE 100 down 1.5% as Lloyds, M&S and Scottish Mortgage reverse
Tuesday 16 April 2024 10:28 , Graeme Evans
European markets are sharply lower today, with the FTSE 100 index down 1.5% or 122.61 points at 7842.92.
London’s poor performance followed last night’s slide for Wall Street stocks on signs that interest rates may not fall until December.
Middle East tensions and a mixed US earning season also impacted sentiment. China’s robust first quarter GDP figure of 5.3% today kept Brent Crude near $90 a barrel in a further sign of inflation pressure.
There was no hiding place for London investors amid a broad-based reverse that left Anglo American down 78.5p to 2090.5p and Ladbrokes owner Entain off 22.7p to 794.5p.
The mood towards UK-focused stocks wasn’t helped by official figures showing a surprise jump in the unemployment rate to 4.2% alongside continued wage strength.
Mortgage lender Lloyds Banking Group was among the hardest hit after a decline of 3% or 1.4p to 49.8p, while Marks & Spencer dropped 7.7p to 246.5p.
Other big FTSE 100 fallers included Scottish Mortgage Investment Trust, which lost 3% or 29.6p to 836.6p after the value of its holding in Tesla slid last night.
The FTSE 250 index gave up 1.5% or 295.78 points to 19,403.11, with Auction Technology Group down 13% or 82p to 541p after an otherwise robust trading update was impacted by tougher market conditions for US-based Proxibid.
Recruitment firm Hays weakened 4.1p to 88.4p after reporting a 16% drop in UK like-for-like net fees alongside a 13% reverse for its biggest division of Germany.
Other mid-cap fallers included defence firm Qinetiq and Royal Mail owner IDS, off 21p to 336.8p and 8p to 219.2p respectively.
Miner Centamin was among a handful of risers, up 2.7p to 129p as the gold price stayed near a record at $2371 an ounce.
Market snapshot as FTSE falls even further
Tuesday 16 April 2024 09:53 , Daniel O'Boyle
The FTSE 100 is now down more than 1.5%, slipping further after it sbig early fall.
Take a look at our market snapshot:
Wise shares fall after trading update
Tuesday 16 April 2024 09:45 , Daniel O'Boyle
Wise shares are down 7.5%, knocking more than half a billion pounds off the fintech’s market cap, after a trading update today disappointed investors.
The money transfer business said it expected an increase in gross profit margins, but volume per customer declined.
Kristo Käärmann, Co-founder and Chief Executive Officer, said: “I am pleased that we have ended the financial year with another solid quarter. Active customer growth remained strong at 29% as personal and business customers find our growing set of features and products increasingly useful in helping to move and manage their money.”
'A meaningful softening'
Tuesday 16 April 2024 09:10 , Daniel O'Boyle
Simon French, chief economist at Panmure Gordon, says there are strong signs now of the UK labour market loosening.
FTSE 100 down 1.3% in global sell-off, Dr Martens 29% lower
Tuesday 16 April 2024 08:40 , Graeme Evans
The FTSE 100 index is down by 1.3% or 103.99 points at 7861.54, with NatWest, Rio Tinto and Scottish Mortgage Investment Trust among stocks down by 2%.
The sell-off is mirrored across Europe, where leading benchmarks have fallen by about 1.5% in response to the weak handover from Wall Street and Asia.
The risk averse mood also left the FTSE 250 index 273.07 points lower at 19,452.82, with the biggest faller Dr Martens after its latest profit warning and change of chief executive. Shares slumped 29% or 27.95p to 67p.
Auction Technology Group reversed 13% or 79p to 544p and defence technology business Qinetiq by 4% or 14p to 343.8p after their latest trading updates.
Dr Martens shares down 27%
Tuesday 16 April 2024 08:37 , Daniel O'Boyle
Dr Martens shares are down another 27% after its latest profit warning today.
They’re now down almost 85% since the firm floated in 2021.
CEO Kennny Wilson, who is set to leave this year, said: “The whole organisation is focused on our action plan to reignite boots demand, particularly in the USA, our largest market.”
DS Smith backs US merger deal
Tuesday 16 April 2024 08:08 , Graeme Evans
FTSE 100-listed DS Smith today backed a £5.8 billion merger proposal from US-based International Paper.
DS Smith shareholders will be left with 33.7% of the combined company in the deal pitched at 415p-a-share.
The recommendation by DS Smith follows its earlier support for a merger with fellow London-listed company Mondi.
International Paper has said it will seek a secondary listing of its shares on the London Stock Exchange should the DS Smith merger be successful.
'Bank will have a careful balancing act ahead'
Tuesday 16 April 2024 07:56 , Daniel O'Boyle
Richard Carter, head of fixed interest research at Quilter Cheviot, says the Bank of England has a difficult balancing act ahead as the labour market cools.
Carter said: “There is still some concern over the reliability of this data, so the Bank of England may have to take the figures with a pinch of salt. Nonetheless, it will be pleased to see that wage growth is getting closer to its 2% target which should also help inflation continue its path back down. However, this morning’s figures suggest that the labour market is beginning to see a real impact from the current level of interest rates, and the Bank will have a careful balancing act ahead of it in ensuring inflation gets back down to target without over-tightening and inflicting too much pain on the jobs market.”
TGI Fridays franchisee firm to buy into the chain in deal worth £177 million
Tuesday 16 April 2024 07:53 , Michael Hunter
World-famous diner chain TGI Fridays is at the centre of a £177 million deal in which one of its franchisees will acquire a major stake in the owner of the brand.
Hostmore will own 36% of the business after the deal.
TGI is mainly run through franchises, in its home US markets and 43 other countries.
Stephen Welker, Chairman of Hostmore, said the deal would "reunite two businesses that are a natural fit, and were one business until as recently as 2014.”
The enlarged business will be listed in London and will be renamed “"TGI Fridays plc", trading under the ticker TGIF.
B&M singles out former Wilko stores as annual revenue nears £6 billion
Tuesday 16 April 2024 07:39 , Michael Hunter
B&M European Value Retail singled out the contribution from the former Wilko stores it bought as it reported a rise of over 10% in annual revenue of £6 billion today.
The fast-growing discount homewares chain said the outlets that were part of its collapsed rival, which it said were “performing ahead of expectations”. It opened 47 new stores in the year to 30 March.
Its UK revenue rose almost 9% to £4.4 billion, with B&M France’s sales up almost a fifth to £514 million. Sales at its Heron Foods chain rose by over 18% to £560 million.
Alex Russo, chief executive, said: “The business and team are well set up for the year ahead, our pipeline remains on track to open not less than 45 UK B&M stores in each of the next two financial years and our French and Heron businesses continue to demonstrate significant profitable growth potential."
Enough labour slowdown for June rate cut?
Tuesday 16 April 2024 07:36 , Daniel O'Boyle
Paul Dales, Chief UK Economist at Capital Economics, said that the signs of the labour market loosening could be enough to encourage the Bank of England to cut in June.
“Overall, if it wasn’t for the clear weakening in activity in the labour market we’d be a bit worried that the UK’s disinflation process is grinding to a halt like in the US.
“But with employment falling sharply and the unemployment rate climbing, we suspect wage growth will continue to ease in the coming months. That may allow the Bank to cut interest rates in June, even if the Fed doesn’t move until September.”
Dr Martens CEO to go after another profit warning
Tuesday 16 April 2024 07:33 , Daniel O'Boyle
Iconic boot maker Dr Martens says its CEO Kenny Wilson will leave this year, after its latest profit warning.
Its struggles in the US have continued, with the Autumn/Winter order book “significantly down year-on-year”, which could cost £20 million in profits.
Costs have continued to improve, and the business says it does not plan on upping costs further.
The classic brand said there is a “wide range of potential outcomes”, but it has assumed that revenue will decline, and profit could fall by almost 70%.
CEO Kenny Wilson will go, with Ije Nwokorie, currently chief brand officer, taking over.
Wilson said: “Dr. Martens is an incredible brand powered by our fantastic people. After six years in the role, I feel that the time is right to hand over this year, and I am excited that Ije will be my successor.
“I have enjoyed working with Ije, both as a Board member and in the executive leadership team in recent months, and I have seen his brand knowledge and passion first-hand. I look forward to working with him closely in the year ahead.”
Superdry in shake-up takes it off the stock market
Tuesday 16 April 2024 07:28 , Simon English
Superdry today launched a restructuring plan aimed at saving the once might brand which will see it raise cash and slash rents.
It will delist from the stock market as part of the plan, which should give it time away from the glare of daily scrutiny of its battered share price.
There will be rent cuts on 39 of its UK stores and an extension on loans agreed with Bantry Bay and Hilco.
It claims this will lead to “material cash savings” over the three years of the plan.
Superdry shares have crashed from more than 500p five years ago to just to 8p today, which leaves the equity valued at less than £8 million.
A statement today said: “The Company continues to face challenging trading conditions and, as announced on 28 March 2024, recently extended and increased its secondary lending facility with Hilco to provide improved liquidity headroom as it implements its turnaround plan. To further bolster that liquidity headroom and provide the Company with the appropriate degree of funding certainty to enter into the Restructuring Plan, the Company is today announcing a proposed Equity Raise (which is fully supported and underwritten by Julian Dunkerton, Superdry’s CEO and Co-Founder), to provide it with additional equity funding..”
Dunkerton returned to the business as CEO, ousting the rest of the board in the process, in frustration at how they were running a business that is close to his heart.
He still owns 26% of the shares. He is looking to raise up to £10 million in equity from other investors to keep the brand – once iconic, but lately tarnished – going.
Superdry said: “Given the material changes to the Company’s business envisioned under the new target operating model, the Company considers it best to implement these changes away from the heightened exposure of public markets. In addition, the Company believes it can achieve significant annual cost savings from the Delisting that will contribute to delivering its target operating model.”
FTSE 100 set for big fall after US slump, China GDP impresses
Tuesday 16 April 2024 07:16 , Graeme Evans
Heavy losses on Wall Street have set the tone for a weaker session in London, with IG index braced for the FTSE 100 index to open at least 1% lower.
Asia markets are also in the red following falls of about 1.8% for Tokyo’s Nikkei 225 and the Hang Seng index in Hong Kong.
The pressure came even though China’s first quarter GDP figure beat hopes after 5.3% year-on-year growth.
The stock market reversal has been driven by Middle East uncertainty and expectations that US interest rates are likely to stay elevated for longer.
Higher oil prices haver added to the inflation jitters, with the price of Brent Crude still above $90 a barrel this morning.
Technology stocks led the Wall Street slump as the Nasdaq closed 1.8% lower and the S&P 500 index fell 1.2%. The Dow Jones Industrial Average was more resilient after a 0.6% fall.
Among the Magnificent Seven, the shares of Apple, Meta Platforms and Nvidia fell more than 2% and Tesla by 6% after the car maker announced it will lay off 10% of its workforce.
Real earnings growth highest since 2021
Tuesday 16 April 2024 07:07 , Daniel O'Boyle
ONS director of economic statistics Liz McKeown said: “Recent trends of falling vacancy numbers and slowing earnings growth have continued this month albeit at a reduced pace. But with the rate of inflation also slowing, real earnings growth has increased and is now at its highest rate in nearly two and a half years.
“At the same time, we are now seeing tentative signs that the jobs market is beginning to cool, with both a fall in the headline employment rate from our survey and a drop in the total number of people on payrolls from HMRC data.
“However, we would recommend caution when looking at the size of the fall in headline employment, as previously highlighted lower sample sizes mean there is greater volatility in quarterly changes than was the case.”
Unemployment in surprise jump to 4.2%
Tuesday 16 April 2024 07:03 , Daniel O'Boyle
UK unemployment increased to 4.2% for December to February, in a sign that the labour market’s resilience to interest rate hikes are slipping.
The jobless rate had remained historically low even in the face of 14 straight hikes. Today’s figure is still low, but a jump from last month’s 3.9% and notably ahead of the expected 4,0%.
Elsewhere, wages excluding bonsues grew by another 6%. Including bonuses, wages were up 5.6%.
Tuesday 16 April 2024 06:59 , Daniel O'Boyle
Good morning from the Evening Standard’s City desk
The fog of war is making it particularly hard to read prospects for the economy at the moment.
Three key sets of UK figures — jobs, inflation and retail sales — should in theory clear some of that away this week, but I suspect that by Friday the outlook will be just as murky as ever.
If City scribes are right, the labour market will continue to soften, inflation will come down again, possibly to as low as 3%, and retail sales will be less than stellar.
All that points to a window of opportunity opening for the Bank of England to order a first rate cut since the start of the pandemic by June.
The set of data that has the potential to upset this scenario perhaps more than any other is wages, which are now running significantly above prices at 6.1%, not including bonuses, and have stubbornly refused to yield to the interest rate discipline.
With the impact of the 9.8% living wage hike in April — and the knock-on effect that will have for earnings further up the chain — still to appear in the figures, the smouldering inflationary bushfire that rapidly rising real earnings represents is far from extinguished.
Although labour markets are a bit slacker than at the end of the pandemic, they are far from loose. Many sectors still report shortages, which can often be traced back to Brexit, and are having to pay more to attract talent, particularly in London.
Until that gap between wages and prices closes it seems unlikely that the Bank will feel comfortable about deep and frequent cuts in rates.
Here’s some of yesterday’s top stories:
Oil market shrugs off Middle East flare up - but fears remain of Israel retaliates
Metal prices surge in early trading in London after new Russian sanctions come into force
Inchcape to sell its UK dealerships for £346 million
Luxury street clothing brand Represent to open huge new flagship on Wardour street
Pagegroup profits down as conditions in recruitment market remain tough
Schllings unveils tie up with Clarke Locke in the US and Giles George in Australia to give “global access” to “reputation, privacy and security” management to top clients
Mitie Groujp “expects profits of £200 million”
Independent coffee shops chains Esquire and Cooks going well
Standard Chartered invests in ‘Sharia-compliant’ fintech
