- FTSE 100 down 15 points at 8,232
- Century-old investment trusts mergeÂ
- Retail sales fall unexpectedly in June
4.00pm FTSE 100 to close lower
London stocks are on track to close slightly lower today as the worries of a slowdown in the US market begin to be felt across the Atlantic.Â
An unexpected slip in retail sales in June didn't help the index either, with theÂConfederation of British Industry warning that further drops in sales volumes will continue in July.
In company news, FTSE 250 firmsÂWitan Investment Trust and Alliance Trust, confirmed they would be merging to create a £5 billion portfolio, with theÂnewly-created business expected to join Âthe FTSE 100.Â
AO World PLC (LSE:AO.) reported annual profit above expectations and said it is confident in growing revenues at double-digit rates, a trading update revealed.
The online white goods and mobile phones retailer hailed its âstrategic pivotâ to focus on earnings and cash, with adjusted profit before tax increasing 186% to £34.3 million in the year to end-March.
3.40pm: Currencies and commodities today
As the FTSE 100 moves towards closing lower, here's a look at how commodities and currencies have done today:
- Bitcoin/USD: -0.1% at $61,720
- GDP/USD: -0.3%Âat $1.264
- GDP/EUR: -0.1%Âat â¬1.182
- EURO/USD: -0.2% at $1.06
- Brent Crude: +-0.4% at $85.38
- WTI Crude: +0.3% at $81.10
- Gold: -1% at $2,297
- Silver: -0.5% at $28.72
3.21pm: Boeing union calls for 40% pay rise
Boeing's largest union is demanding the aircraft maker up its workers' pay by 40% as it looks to capitalise on the troubles regarding its 737 Max aircraft.
The International Association of Machinists and Aerospace Workers, representing around 32,000 workers in Seattle, is calling for a bumperÂpay rise as the company attempts to recover from a horde of safety and production scandals this year.Â
It also wants the new narrow-body plane to be built in Seattle, attempting to prevent Boeing moving elsewhere to cut costs.Â
Jon HoldenÂat the IAMAWÂ said: âWe have a lot of leverage right now and we are going to use it. We are going to push them further than they ever would think they are going to go on wages and job security.â
3.01pm: Aston Martin shares slip on petrol supercar unveilingÂ
Aston Martin shares have dropped more than 3% after it unveiled its £2 million Valiant model, with a petrol-powered 5.2-litre Twin-Turbo V12 engine.
Only 38 of the new vehicles will be manufactured and they have all already been allocated with deliveries to start by the end of this year.
Marek Reichman, Aston Martinâs executive vice president and chief creative, said the Valiant would âhonour internal combustionâ.
Built by the companyâs custom division, the Valiant follows the Valour special edition model created for the companyâs 110th anniversary and stems from a request from F1 driver Fernando Alonso for a more extreme version.
Aston Martin said the Valiant would mark the âera of brutal V12 performanceâ.
2.38pm: Wall Street shifts lowerÂ
US stocks opened lower today as investors begin to analyse whether the AI-led bull run has run its course.
The Dow Jones and S&P 500 dropped 0.3% to 39,003 and 5,454, respectively, while the Nasdaq held flat at 17,710.Â
Nvidia, the bellwether for AI stocks, kept flat at the open, having experienced volatility in premarket trading.Â
FedEx shares increased by 12.5% as the parcel delivery firmâs fiscal fourth quarter and full-year earnings impressed, showing that its DRIVE cost savings plan is improving profitability.
For fiscal 2024, adjusted earnings per share (EPS) of $17.80 topped estimates of $17.76 while revenue of $87.7 million matched expectations.
Other movers included Rivian, up 26% after it secured a US$5 billion investment fromÂVolkswagen, while white-goods manufacturer Whirlpool opened 15% higher after it was revealed Bosch was considering a takeover offer.Â
1.53pm: Universal UK theme park to generate £50 billion for economy
Universal, the US film studio, said its planned theme park in Bedford would create an additional £50 billion for the UK's economy.
In what would be the company's first amusem*nt park in Europe, Universal said according toÂresearch the attraction could generate £35.1 billion through construction and the first thirty years after that.Â
In addition, it would also generate an estimated £14.1 billion in tax returns for the Treasury over the same three decades.Â
Earlier this year, Universal purchased a 480-acre plot of land, formerly used as a brickworks, in the South of Bedfordshire, with the hopes of opening a theme park there.Â
As part of the plans, the location would look to remain open 365 days a year including holidays such as Christmas.Â
The construction is expected to create 20,000 jobs, with 5,000 workers on-site at its peak. Once operational, the park will initially create 8,000 new jobs, with plans to increase over time.
1.34pm: Wall Street set for another mixed session
Wall Street stocks are set for a mixed opening, with the S&P 500 and Dow Jones expected to tick lower, while the Nasdaq is predicted to continue on from yesterday's gains.Â
Yesterday saw US investor fears reduced after Nvidia, which had suffered three consecutive days of falls, lifted more than 6.5%.
The AI chipmaker is expected to open 2% higher today, a strong sign for the rest of the market.
David Morrison at Trade Nation said: "Letâs see if investors remain so convinced of the chip designerâs future that they drive it up to new highs. If so, then it will restore the companyâs status as the stock marketâs bullish bellwether.
"If not, then further weakness could easily sour sentiment in general, even if there is perceived value outside the tech leaders."
1.18pm: Witan and Alliance merger "makes sense", says analyst
Witan and Alliance's mergerÂ"makes sense for shareholders", says Stifel, with attractive charges and both sides already using a relatively unique multi-manager approach.
This was "the most logical move" and the "best fit" for Witan in its strategic review, says Stifel analyst Iain Scouller in a note to clients after the £5 billionÂmerger was announced on Wednesday.
Combining £3.4 billion Alliance with £1.6 billion Witan creates a larger, more liquid company, he said, which will potential propel the combined company into the FTSE 100 post-merger.
The analyst said his view was that joining the ranks of the blue-chips "tends to be a double-edged sword".
"We think the share price of FTSE 100 companies can be quite highly influenced by 'basket trades' and other index activity, which can increase share price volatility", he explained.
12.54pm: Whirlpool shoots higher as Bosch considers takeover bid
Whirlpool, the US home appliance group, rose 20% in premarket trading today after it was revealed that German rival Bosch was considering a takeover bid.Â
Rober BoschÂGmbH is said to have been looking for acquisitions to help boost its large home appliance unit and opened talks with advisors over whether to make a bid, according to reports from Reuters.Â
Competition from Chinese rivals has been growing in recent times and buying Whirlpool, one of the world's largest white-goods manufacturers, could help Bosch strengthen its home appliance division.Â
Whirpool has undergone a restructuring process in recent years, which saw it offload its European business and divest from its ventures in Africa and the Middle East.
In Britain, white-goods retailer AO World rallied 2% after it posted a 186% surge in underlying full-year profits, having undergone its own streamlining.Â
12.27pm: Japan's yen falls to lowest point since '86
Japan's yen fell to its lowest level compared to the US dollar in close to 40 years as concerns in the country grow over the speed of further interest rate cuts.Â
The yen dropped by around 0.4% on Wednesday to US$160.31, increasing speculation that the Bank of Japan will intervene to prop up the currency.Â
Japanese government officials including its finance minister have said they are watching the situation closely.
Today's fall puts the yen at a lower point than when the government was forced to intervene back in April.Â
Low interest rates of between 0% and 0.1% compared to the high levels seen in Europe and the US are a key driving force for the currency's weakness.Â
12.06pm: Phoenix Group falls on plans to sell SunLife
Phoenix Group, the pensions giant, is one of the top fallers in the FTSE 100 today after the market reacted negatively to its plans to sell its SunLife business.Â
Shares dropped by around 1.5% after the company said SunLife, the over-50s financial services company, wasÂÂâno longer core to the delivery of its visionâ.
With hopes of becoming the UK's top pension business, Phoenix said it recieved interest from potential SunLife suitors, but nothing material as of yet.Â
Analysts have had mixed reactions to the move, with Liberum calling it "a little odd" while Berenberg said it was a "positive step".Â
11.47am: Retail sales volumes drop unexpectedly in June
Retail sales volumes fell faster than expected in the year to June and are expected to tumble further next month - albeit at a slower pace, industry data revealed.
Sales volumes dropped by 24% this month, compared to May's growth of 8%,ÂCBI distributive trades survey showed.
The survey highlighted that sales volumes were well below average for the time of year, whileÂorders placed with suppliers have fallen by 14%,Âa similar pace to the previous month.
Online sales decline heavily during the month, faster than initially expected, and are expected to edge down further in July.
Stock positions were reported as "adequate".
"Last monthâs nascent recovery in sales proved to be short-lived, with retailers reporting a faster-than-anticipated decline this month," saidÂÂAlpesh Paleja, CBI's interim deputy chief economist.
"Unseasonably cold weather in June may have played a role, but itâs notable that internet retail sales fell sharply in our survey, too.
"With consumer demand still on shaky ground, an incoming government can help business by ensuring that the UK is the most attractive place to start, grow and run a business.
"This will require bold action such as delivering a holistic cross-economy solution to the UKâs overly complex business rates system, which is a particular burden for retailers."
11.25ÂLVMH and Richemont takeover rumours growÂ
Talks of consolidation in the luxury sector are growing after it was revealed Bernard Arnault, the owner of LVMH, has built a stake in Cartier owner Richemont.
Europe's richest man is believed to have purchased a stake too small to be disclosed in public records and is a personal investment, reports from the Financial Times revealed.Â
Swiss-based Richemont has been rumoured as a takeover target for luxury companies, especially as it readies for a succession challenge withÂits owner and chair Johann Rupert set to retire.Â
French-listed LVMH kept unchanged in trading today, while Richemont, trading in Switzerland, dropped close to 1%.Â
ÂShares in London-listed Burberry rose 1%.
11.03am: De Beers suffers sales slump as sale looms
De Beers, the world's largest diamond producer, suffered a drop in sales during its most recent cycle.
The South African company said it sold nearly £250 million of rough-cut diamonds, down from £302 million in its previous cycle and lower than the £360 million in the same period a year prior.Â
It comes as its owner Anglo American has been embroiled in takeover talk with rival mining firm BHP.Â
Anglo suffered a 31% slump in underlying earnings during the past financial year, and blamed the drop on a slump in commodities after it wrote down around US$2.4 billion for its diamond and nickel divisions.Â
Earlier this month, Anglo American said it had begunÂa massive restructuringÂincluding the divestment of its metallurgical coal (met coal) assets,Âfollowing a rebuffed £39 billion bid approach from BHP.
Part of this restructuring includes plans to sell De BeersÂ"in a responsible and orderly way".
10.41am: Is AO World's recovery the first of many in UK high streets?
AO World shares are up close to 2% after it revealed its profits soared over the past financial year thanks to rejigging parts of the business.Â
With a whole horde of other retailers releasing results tomorrow including Currys, Watches of Switzerland and Moonpig, there is a chance for further shine to radiate through the industry.Â
"So, is the torrid time for Britainâs retailers coming to an end as inflation gets back under control," Garry White at Charles Stanley (LSE:CAY) asked.Â
"There are reasons to be optimistic.
"The latest GfK UK consumer confidence reading is minus 14 due to the ongoing cost-of-living crisis, but the figure has strengthened for the last three months â and Juneâs reading was the best since November 2021.
"Larger purchases, such as white goods, are also among the first purchases deferred by consumers during tough economic times, so it is positive that the company forecasts a recovery."
10.14am: Revolution Beauty rises as it returns to a profit
Revolution Beauty shares jumped 2.5% today after itÂswung back to annual profits.
Management said its strategy shift, focusing on becoming a top-five mass beauty company, means lower sales in the first half of this year, before growth returns in the second.
For the past year to end-February, revenue grew 2% to £191.3 million, including the impact of significant product clearance activity in the first half.
The cosmetics business underlying profit (EBITDA) swung to£12.6 million from a £7.5 million loss last time.
Net debt increased £2.4 million to £23.1 million.
Broker Liberum said results wereÂas expected, representing the first of a two-year turnaround strategy, with profit margins recovering to support what is a self-funding strategy.
9.53am: Deliveroo shares jump over US takeover interest
Deliveroo shares lifted 3.5% this morning after it was revealed US delivery company Doordash was interested in a takeover.Â
Last month, Doordash approached Deliveroo, however, the discussions ended after both parties failed to come to an agreement over the valuation, reports from Reuters said.Â
Deliveroo has slumped by around 68% since it hit all-time highs in August 2021 amid the pandemic-led boom in takeaways.Â
Now the company is struggling to generate the sameÂdemand.
Talks between the two are no longer ongoing, but analysts believe the valuation gap between US delivery services and their UK counterparts could drive further M&A activity.Â
"In this instance, the talks have failed. But such is the strength of the financial, industrial and strategic logic of a Deliveroo takeover, we would not be surprised to see similar such headlines re-emerge in the short term," Jefferies said.
Deliveroo's largest shareholders include Amazon, with more than a 13% stake, DST Global, which owns 7.5%, and co-founder and chief executive Will Shu, with a 6.5% holding.Â
9.32am:ÂAlliance Trust merges with WitanÂ
Witan Investment Trust shares have popped 4% after it announced it was merging with Alliance Trust, propelling the newly-created Alliance Witan PLCÂto the FTSE 100.Â
Keeping Allianceâs multi-manager investment model, £1.6 billion market cap Witanâs assets will be merged into £4.3 billion Alliance, producing a company that will be among the fifth or sixth largest in London.
The deal also introduces a competitive fee structure, expected to lower ongoing charges ratio in the high 50 basis points in future financial years from current ratios of 76bps and 62bps, respectively.
Enhanced dividends this year and improved market liquidity are anticipated, with no significant NAV dilution, and Allianceâs investment manager, Willis Towers Watson, makes a âsignificant contributionâ to help absorb transaction costs.
Analysts believe the deal will put it on par with F&C Investment Trust, the UK's oldest trust.Â
9.04am: Royal Mail bidder offers to buy staff sharesÂ
Royal Mail bidder Daniel Kretinsky has urged thousands of former and current employees of the postal service to sell him their shares as he looks to have his offer approved.Â
Kretinsky's investment group, which made a 370p-a-share offer for Royal Mail's parent company International Distribution Services, published the bid to staff members online and through the post.Â
The Czech billionaire is now in a period where he can formally lobby IDS investors to sell shares, in the hope of meeting the 75% shareholder approval required for the deal to be accepted.Â
Some 27.5% of IDS is already owned by Kretinsky's EP Group, while large asset managers such as BlackRock, Vanguard, UBS and Schrodes own a large portion of the otherÂ72.5%.
Royal Mail workers, who recieved 600 shares in the company at the time of its privatisation in 2013, own around 5.5% of the wider company.Â
While the board has recommended shareholders accept the £3.6 billion offer from the 'Czech Sphinx', several hurdles remain ahead including obtaining government approval, winning over the unions and avoiding a debt squeeze.Â
8.43am: Morning so far
The FTSE 100 is continuing to hold higher this morning as confidence returns following a big tech rebound in the US.Â
Overnight, the chipmaker Nvidia surged after a three-day slump, helping push the Nasdaq higher and settlingÂinvestor nervousness following a potential market wobble.
In the UK, AO World, the white goods retailer, saw its profits surge more than 185% after it benefited from a streamlining operation which saw many of its least profitable ventures axed.Â
Two of Britain's oldest investment trusts, Alliance and Witan, unveiled that the two would be merging, giving it a portfolio of£5 billion.
In Europe, Volkswagen unveiled a US$5 billion investment into EV maker Rivian as part of a joint venture which will see the German automaker receive technology from the US start-up.ÂÂ
Finally, Daniel Kretinsky, the Czech billionaire attempting to buy Royal Mail, has sent workers at the postal service to sell their stakes to him as he looks to make the shareholder approval process easier.Â
8.26am: FTSE 100 moves higher
London's blue chips have moved higher this morning, offsetting much of the losses suffered on Tuesday.
The FTSE 100 was up 32Âpoints at 8,280.Â
In company news, two of the oldest investment trusts in the UK, Alliance and Witan, have announced plans to merge, creating a new FTSE 100 constituent with an enlarged portfolio of close to £5 billion.Â
Meanwhile, FTSE 250 firm PZ Cussons (LSE:PZC) said it still expects profit to be in line with its previous guidance despite a 23% adverse swing in the Nigerian naira since its last update two months ago.Â
The maker of Carex soap, Original Source shampoo and Morning Fresh dishwashing liquid provided no further news on its proposed portfolio transformation, where its St Tropez tanningÂbrand has been put up for sale andÂoptions are being evaluated for its Nigeria business.
7.59am: AO World's strategic pivot sees profits soar
AO World PLC (LSE:AO.) reported annual profit above expectations and said it is confident in growing revenues at double-digit rates, a trading update revealed.
The online white goods and mobile phones retailer hailed its âstrategic pivotâ to focus on earnings and cash, with adjusted profit before tax increasing 186% to £34.3 million in the year to end-March.
Most of the simplification of the business took place the previous financial year, including removing areas of the company that didn't fit with the profit priority, including the trial with Tesco and contracts with housebuilders, as well as exiting surplus properties.
For the year to March 2025, the newly promoted FTSE 250 company expressed confidence in its ability to deliver its "ambition" of double-digit revenue growth alongside adjusted PBT of between £36 million and £41 million, growth of 5% to 19.5%.
7.38am: Volkswagen to partner with RivianÂ
Volkswagen is set to invest £3.9 billion (US$5 billion) in Rivian, the American EV maker, in a joint venture which will give the German automobile company access to the start-up's technology.Â
Another £3.15 billion will be invested within the next two years, the carmaker added.Â
US-listed Rivian has seen its shares surge 50% in premarket trading as a result of the deal.
âWe believe the opportunity ahead is significant. This deal is possible because weâre focused on vertically integrating our network architecture, topology, V-CPUs, and associated software platforms,â said Rivian boss and founderÂRJ Scaringe.
Rivian was boosted in recent months after Joe Biden's administration decided to impose tough tariffs on Chinese EV imports amid a flood of the country'sÂcheaper alternatives in the market.Â
The European Union unveiled similar plans to implement tariffs on electric vehicles built in the Asian country.Â
German automakers have expressed concerns about the EU's plans, warning that China could retaliate with counter-measures which hit companies like BMW, Daimler (ETR:DAI) and VW.
Ipek Ozkardeskaya at Swissquote Bank added: "It wonât bring Rivianâs share price to $180 per share seen right after an incredibly speculative and non-sense IPO, but it could help the company survive and grow at a reasonable pace."
7.15am: FTSE 100 to edge higher
The FTSE 100 is set to open slightly higher this morning, attempting to offset the losses on Tuesday, premarket futures showed.Â
Overnight, Asian stocks struggled to make signficant movementsÂas markets preparedÂfor the latestÂU.S. inflation print, while the yen held around the 160 per dollar level.
Asia-Pacific'sÂbroadest index barring shares in Japan, struggled to make any movement,Âflat at 566.53, but not far off the two-year highs of 573.38 hit last week.
Japan's Nikkei and Taiwan stocks both rose after beingÂled by a rally byÂchipmakers, which tracked the gains seenÂin tech heavy Nasdaq.
Back in the UK, attention turns to AO World, and brokers are looking for a big rebound in profits to £33.4 million as its costly foray into Germany finally washes through.
Reflecting that, margins should be up (gross margins at 23.1% suggests Deutsche Bank) which, together with continued opex discipline, should drop through to a 3.2% pre-tax margin.
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