Britain’s biggest stock broker poised to approve £5.4bn Abu Dhabi-backed takeover
Hargreaves Lansdown has said it is prepared to “recommend unanimously” a £5.4bn takeover led by private equity firm CVC Capital and Abu Dhabi’s wealth fund.
The stockbroker’s board said they were minded to back a revised offer from the consortium priced at £11.40 a share. The new structure of the deal includes a 30p per share dividend that investors can choose to reinvest in the company as a private entity.
Alongside its endorsement, Hargreaves Lansdown extended the deadline for the bidders to make a firm takeover offer. A takeover decision will need to be made by July 19.
The company cautioned: “There can be no certainty that any firm offer will be made for Hargreaves Lansdown, nor as to the terms on which any firm offer might be made.”
The stockbroker’s shares jumped 5.3pc on Tuesday following the announcement, making the company the best performer on the FTSE 100.
It follows three previous approaches from the consortium in recent months, including a £4.7bn offer that was rebuffed in May.
Hargreaves Lansdown is the latest London-listed company to find itself in the takeover crosshairs, as low valuations attract overseas bidders. Darktrace recently agreed to sell itself to US private equity firm Thomas Bravo for more than £4bn, while Anglo American, the FTSE 100 miner, recently fended off a £39bn takeover bid from Australia’s BHP.
The takeover bid for Hargreaves Lansdown comes as Britain’s biggest stockbroker faces increased pressure from lower-cost rivals such Vanguard. Shares have slumped 41pc in the last five years.
Hargreaves Lansdown was co-founded in 1981 by Peter Hargreaves and Stephen Lansdown. Both have sold stakes in recent years but together still own about a quarter of the company.
The pair signalled they would be willing to back the fresh approach. Mr Hargreaves told Bloomberg: “If there’s a consensus for this to happen I will certainly consider backing it. A lot of people have the shares and are clearly elderly – they’ll be wanting to realise as much as they can with the business and probably don’t have to wait several years while it needs intensive care. And I think that’s better done in private hands.”
Last year Mr Hargreaves criticised the running of the company he co-founded, accusing the board of focusing on “completely unnecessary irrelevant programmes, which have distracted the firm from its prime objective”.
Mr Lansdown told Bloomberg of the latest offer: “It’s something to consider now and the board is going to support it so we’re going through the process.”
Hargreaves Lansdown declined to comment.
Read the latest updates below.
06:11 PM BST
Signing off...
Thanks for joining us today. We’ll be back in the morning, but I’ll leave you with the news that JD Wetherspoon is suing a Welsh pub for using ‘Wetherspoons’ name. Daniel Woolfson reports:
JD Wetherspoon is suing the Welsh pub at the centre of a rebranding row for using its name on signs.
The JD Wetherspoon pub chain, led by Sir Tim Martin, has filed a legal claim against a company trading as Wetherspoons Ltd, which runs The Bridge Head in Abergele, Denbighshire.
The pub, which has no link to JD Wetherspoon, had placed a “Wetherspoons Limited” sign on the building.
It came after the pub was hit by a boycott from locals in March after it changed its name from Pen-Y-Bont Inn to The Bridge Head.
Sir Tim, founder and chairman of JD Wetherspoon, said the pub chain had resorted to legal action after trying to resolve the matter informally.
He said: “It’s mad. We’re well known in Wales. Welsh poets Goldie Looking Chain have even memorialised us in song.”
06:08 PM BST
Nvidia directors and executives sell $700m of shares
Nvidia’s directors and executives have sold more than $700m of shares this year as the American stock market powerhouse continues to push upwards in record territory.
Bloomberg reports that “insiders” have sold about 770,000 Nvidia shares during 2024 (excluding the effect of the stock split the company enacted a week ago).
Nvidia declined to comment.
The shares are up more than 180pc this year, and are up 3,467pc in the past five years.
05:57 PM BST
M&S reverses ban on alpaca wool risking Peta activist backlash
Marks & Spencer has reversed its ban on alpaca wool, threatening to spark a row with campaigners who warn that shearing the animals causes “immense suffering”. Hannah Boland reports:
The retailer said it was beginning to source alpaca yarn for its clothes after a decision to ban the wool in 2020 under pressure from animal activists Peta.
M&S at the time said an investigation by Peta had highlighted “concerns around the welfare of animals that are farmed to produce alpaca [wool]” and committed to phasing alpaca yarn “from all future product developments”.
However, on Tuesday M&S said it had now reversed the ban following the introduction of the Responsible Alpaca Standard (RAS) in supply chains. It said the RAS “gives us the confidence we need to start sourcing this fibre again”.
The RAS was launched in 2021 as a voluntary programme by industry group the Textile Exchange where alpaca farmers and ranchers can apply for certification and assessment on factors such as animal welfare and land management.
05:54 PM BST
Plant hire giant drops amid fallout from US script writers’ strike
The FTSE 100 plant hire giant Ashtead was the second-largest faller on the FTSE 100 today after revealing falling profits. Shares dropped 2pc.
Profit before tax fell 2pc to £2.1bn for the year to the end of April after being hit by higher interest rates and a writers’ strike in the US. It is a major supplier of camera, lighting and production equipment to the television and film industries.
Adam Vettese, analyst at investment platform eToro, said:
Ashtead has reported a softer performance than last year, highlighting the higher interest rate environment affecting the firm which largely utilises debt to service its plant rental demand. The writers; strike was also detrimental to the firms film and TV arm.
The dividend has seen a 5pc increase which will please investors to some degree although many may well be wondering whether the rumoured switch to a US listing is actually better long term due to the more favourable valuation metrics.
Given the majority of the firms business in North America it could be argued that this makes a lot of sense, albeit a big blow to the FTSE100.
05:38 PM BST
FTSE 100 needs ‘new catalyst’ to stay above 8,200, says analyst
Investors are looking for a new catalyst to justify sending the FTSE 100 higher, an analyst has said.
Fiona Cincotta, senior market analyst at City Index said as the index’s struggled to move above the 8,200 level. The blue-chip index closed 0.6pc higher today at 8,164.21 points, after three straight sessions of losses. She said:
We’re seeing a consolidation phase ahead of inflation data and the BoE decision. We’re waiting for the next catalyst.
Investor focus is now on the domestic consumer price index (CPI) numbers tomorrow, the last crucial dataset ahead of the Bank of England’s interest rate decision on Thursday.
Russ Mould, investment director at AJ Bell, said:
Everybody will be looking at the voting patterns on the nine person Monetary Policy Committee to see if there’s any change in the 7-2 vote for no change.
There’s some hope that more members will lean towards cutting; markets will take them as green lights for rate cuts in August or September.
05:30 PM BST
European shares advance as French political concerns subside
European shares closed higher this afternoon, supported by a slip in government bond yields as investor concern over French political woes ebbed.
The pan-European Stoxx 600 index, which includes some of Britain’s biggest companies, closed nearly 0.7pc up, with utilities leading sectoral gains, up 1.5pc.
Euro zone government bond yields edged lower as concern over political risk in France subsided somewhat.
European shares posted their biggest weekly drop so far this year on Friday, after French president Emmanuel Macron called for a snap election following a trouncing of his ruling centrist party in the European Parliament elections.
Ipek Ozkardeskaya, a senior market analyst at Swissquote Bank, said:
Many investors out there [are] now saying that the sell-off we saw last week in French equities has been overdone and the fact that the political uncertainties are not necessarily going to impact the economic outlook of the country.
05:27 PM BST
‘Significant day’ for the stock market tomorrow, suggests analyst
The FTSE 100 ticked up today ahead of official figures on consumer price inflation (CPI) tomorrow morning, which is expected to fall back to the Government’s target of pc.
However, experts do not predict it will be enough to persuade Bank of England policymakers to cut the base interest rate from 5.25% on Thursday.
Dan Coatsworth, investment analyst at AJ Bell, said:
Tomorrow could be a significant day for the UK market as we’ve got May’s inflation figures due.
The consensus is 2pc which would put the cost of living bang on target for the Bank of England, thus strengthening the argument to cut rates. But the big unknown is when the Bank will cut.
Thursday’s meeting might be too soon and markets certainly don’t expect it to budge.
04:55 PM BST
Footsie closes up
The FTSE 100 closed up 0.6pc today. The biggest riser was takeover target Hargreaves Lansdown, up 5.3pc, followed by components supplier RS Group, up 3.69pc. The biggest faller was JD Sports, down 2.2pc, followed by equipment rental company Ashtead, down 2pc.
Meanwhile, the FTSE 250 fell 1.2pc. The biggest riser was Energeam, up 6.8pc, followed by Investec, up 6.4pc. The biggest faller was PureTech Health, down 2pc, followed by housebuilder Redrow, down just below 2pc.
04:51 PM BST
Elon Musk pushes ahead with payments service in ‘everything app’ X
Elon Musk’s X has been busy getting licenses from US states to become a payments app, in addition to a social media one.
Bloomberg reports that X has submitted dozens of documents to state regulators in the US with its plans to add payments features that will allow users to store money in X, pay other people or business and pay for goods in shops.
X was originally Elon Musk’s online bank, founded in 1999, before he merged it with the owner of PayPal in 2000.
X was invited to comment.
04:20 PM BST
Hargreaves Lansdown’s biggest shareholder says will ‘consider backing’ takeover
Peter Hargreaves, co-founder of Hargreaves Lansdown, said he would consider backing the takeover offer from private equity buyers, including a unit of Abu Dhabi’s wealth fund.
Bloomberg reported him saying:
If there’s a consensus for this to happen I will certainly consider backing it. A lot of people have the shares and are clearly elderly – they’ll be wanting to realise as much as they can with the business and probably don’t have to wait several years while it needs intensive care. And I think that’s better done in private hands.
04:09 PM BST
Blaze at Danish drugmaker Novo Nordisk is the third in a little over a month
A fire broke out today at an office building belonging to Danish pharmaceutical company Novo Nordisk, the third in a little more over a month to hit the drugmaker.
There were no reports of injuries and police said the blaze was under control.
Flames were seen at the top of a three-story building in Bagsvaerd in suburban Copenhagen. The cause of the fire is being investigated.
Danish media said neighbours heard a large explosion in connection with the fire. Firefighters said on the social media platform X that the blasts “presumably” were caused by gas canisters on the roof that exploded.
A spokesperson for Novo Nordisk told The Telegraph:
This afternoon a fire broke out on the roof of an office building Novo Nordisk is leasing in Bagsværd, Denmark. The building in question is not our headquarters. Fire brigade and police are on site. The fire is under control and has not spread to any surrounding buildings.
There are no indications of any connection between today’s fire and the previous fires, or of any criminal activity relating to any of them.
Last month, two fires were reported at a company facility under construction in Kalundborg, about 55 miles west of Copenhagen, and at an administration building in Bagsvaerd. No one was injured.
Novo Nordisk has several facilities in western Denmark and produces the popular weight-loss drug Wegovy.
03:59 PM BST
Stock makets giving ‘mild gains in low volume trading’
Investors are making mild gains today - but investor morale in Germany is still subdued, according to Axel Rudolph, senior market analyst at online trading platform IG. He said:
European stock indices are on track for a second day of gains as more bargain hunters enter the fray, even though trading volumes are light ahead of the US Juneteenth holiday on Wednesday.
This might explain why US indices are mixed and why there was little reaction to Citigroup hiking its S&P 500 year-end target to 5,600 points, US retail sales rising less than expected and US industrial output rising more than forecast.
In Germany investor morale improved less than expected while, in the UK, Hargreaves Lansdown agreed to a CVC consortium takeover.
03:56 PM BST
Markets increase bets on US interest rate cuts after retail sales data
Markets slightly increased bets today on two interest rate cuts from the Fed this year following lower-than-expected retail sales data for May.
Robert Pavlik, senior portfolio manager at Dakota Wealth Management, said:
The weaker-than-expected data’s telling me that consumers are still having a difficult time and that the economy is still moving forward, but at a slower pace.
The Fed has to start thinking about cutting interest rates, perhaps sooner than the end of the year.
Markets are fully pricing in an interest rate cut by the end of the November Fed interest rate meeting, and largely betting on a second cut by the end of the December meeting.
03:51 PM BST
US stocks edge higher after lackluster retail sales data
Wall Street stocks edged higher early Tuesday as traders weighed a lackluster US retail sales report and awaited a Senate appearance from the Boeing chief executive.
US retail sales rose 0.1pc in May from April, below expectations.
While the data painted a disappointing picture of consumer demand, investors have hoped a slower economy will translate into an easing from the Federal Reserve on interest rates.
The Dow Jones Industrial Average of 30 leading US companies is up 2.9pc.
The broad-based S&P 500 is up 0.1pc, while the tech-rich Nasdaq Composite index down 0.1pc.
Among individual companies, Boeing fell 2.2pc percent ahead of a Senate hearing in which chief executive Dave Calhoun is expected to face tough questioning over the company’s safety record.
The Senate committee released new testimony from company whistleblowers over Boeing’s quality control policies and restrictions on using damaged parts in aircraft production.
03:44 PM BST
Utility Warehouse posts bumper profits - but market sends the shares down
Profits at the owner of Utility Warehouse jumped 17.6pc after it attracted 125,000 extra customers.
Telecom Plus’s results for the year to the end of March show that pre-tax profit rose to £100.5pc, up from £85.5m the year before.
However, analysts were expecting a pre-tax profit of £117m.
The shares have had a mixed day in trading. They were in positive territory until mid-morning, but are currently down 2.7pc.
Turnover fell from £2.5bn to £2bn as a result of energy prices falling, while customer numbers rose above a million during the financial year.
Stuart Burnett, co-chief executive, said:
With the business in such good health, and having passed through the 1 million customer milestone, our current rate of growth places us firmly on track to double the size of the business to two million customers over the medium term, with a commensurate increase in profitability and shareholder returns.
The company specialises in selling energy, broadband, mobile services and insurance through word of mouth, in which customers who make recommendations receive a monthly commission.
03:32 PM BST
Pound gains after weaker US retail sales
The pound has moved higher after US retail sales came in weaker than expected, fuelling hopes of interest rate cuts in America.
Sterling has gained 0.1pc against the dollar to $1.272 but faces a test tomorrow when inflation is expected to have fallen back to the 2pc target for the first time in nearly three years.
Most analysts are forecasting the consumer prices index (CPI) will drop to 2pc in May, down from 2.3pc in April.
It would mark the first time inflation has been at the Bank of England’s target since July 2021, before the cost-of-living crisis saw inflation shoot up - at one stage hitting levels not seen for 40 years.
It would also be a welcome boost for the Prime Minister as he seeks to push an election campaign built on his economic competence.
I will be back to cover the figures first thing tomorrow but until then, Alex Singleton will keep sending you live updates here.
03:15 PM BST
HSBC to appeal decision on money-laundering failings
HSBC has said it plans to appeal the decision by Swiss regulators who said the bank failed to carry out necessary checks on “high-risk” transactions worth $300m (£236.7m).
A spokesman added:
We acknowledge the matters raised by Finma, which are historic.
HSBC takes its anti-money laundering obligations very seriously including complying with all laws and regulations in every market we operate in.
02:59 PM BST
US manufacturers shrug off high interest rates
US factory output beat expectations to rise sharply in May, according to Federal Reserve data, suggesting the manufacturing sector staged something of a rebound despite interest rates remaining at a 23-year high.
The US central bank recently reduced the number of rate cuts it has pencilled in this year from three to just one, as progress against inflation stalled in the first quarter.
Industrial production rose by 0.9pc in May from a month earlier, the Fed said in its latest report, significantly higher than the monthly gains seen in both March and April.
The gain was also well above market expectations of a 0.4pc monthly rise.
Among the major industry groups, mining and utilities production increased by 0.9pc and 1.6pc respectively from April, while mining production rose by a more modest 0.3pc.
May industrial production +0.9% m/m vs. +0.3% est. & 0% prior … manufacturing +0.9%, utilities +1.6%, and mining +0.3% pic.twitter.com/0waRAKVeOg
— Liz Ann Sonders (@LizAnnSonders) June 18, 2024
02:42 PM BST
US stock markets rise after lower-than-expected retail sales
Wall Street indexes opened slightly higher after weaker than expected US retail sales figures.
The Dow Jones Industrial Average rose 121.29 points, or 0.3pc, at the open to 38,899.39.
The S&P 500 opened higher by 2.92 points, or 0.1pc, at 5,476.15, while the Nasdaq Composite dropped 0.26 points to 17,856.76 at the opening bell.
02:36 PM BST
Hargreaves Lansdown poised to approve £5.4bn takeover
The board of Britain’s largest stock broker is prepared to “recommend unanimously” a £5.4bn takeover by a consortium led by private equity group CVC.
Hargreaves Lansdown has extended the deadline for the bidders to make a firm takeover offer, following its initial approach worth £11.40 per share in cash.
A takeover decision will need to be made by July 19.
Hargreaves Lansdown’s shares jumped 5.8pc to the top of the FTSE 100 after the announcement.
02:11 PM BST
HSBC violated money laundering rules, says regulator
HSBC failed to carry out necessary checks on “high-risk” transactions worth $300m (£236.7m) that were designed to avoid money laundering, Swiss regulators have found.
Investigators pointed out a series of failings at the lender’s private bank concerning its relationships with two politically exposed persons.
Swiss regulator Finma banned the bank from entering new business dealings with politically exposed people until it carried out a review regarding its anti-money laundering practices and its current high-risk business relationships.
It said that HSBC, which has co-operated with its proceedings, “failed to carry out an adequate check of either the origins, purpose or background of the assets involved” in two high-risk business relationships.
It said it also allowed transactions worth more then $300m to be transferred from Lebanon to Switzerland and back to primarily other accounts in Lebanon between 2002 to 2015 without sufficient checks.
HSBC has been approached for comment.
01:57 PM BST
US retail sales grow less than expected
US retail sales increased less than expected in May as lower petrol prices weakened receipts at service stations.
Retail sales rose 0.1pc last month after a downwardly revised 0.2pc drop in April, the Commerce Department said. Retail sales were previously reported to have been unchanged in April.
Economists had forecast retail sales, which are mostly goods and are not adjusted for inflation, to gian 0.3pc in May. Retail sales have in recent months been distorted by an early Easter.
Paul Ashworth, chief North America economist at Capital Economics, said:
With services consumption growth slowing in recent months and consumer confidence plummeting again, maybe households aren’t quite as impervious to higher interest rates as we were beginning to believe.
Admittedly, we don’t expect a full-blown slump in consumption but, at the margin, even a modest slowdown in consumption growth (and consequently GDP growth too) could be enough to tip a finely balanced Fed in favour of a rate cut in September.
United States Retail Sales MoMhttps://t.co/weoPiAQNO8 pic.twitter.com/kQ943QOUxq
— TRADING ECONOMICS (@tEconomics) June 18, 2024
01:40 PM BST
Atom boss criticises ‘indifferent customer service’ at big banks
Atom bank has criticised the dominance of large UK lenders who provide “indifferent” customer service, as the app-based bank cheered a record year of profits.
The digital bank, which offers savings accounts, mortgages and loans, revealed it made an operating profit of £27m for the year to the end of March.
This was about seven times higher than the previous year. It also reported its first annual pre-tax profit since launching a decade ago.
The company, which is the only British bank to give employees a four-day week without reducing their salary, cheered the financial performance as its “best year yet”.
Chief executive Mark Mullen said it was difficult for challengers to “disrupt the status quo” in the banking sector. He said:
UK banking remains dominated by players with low growth, high costs and indifferent customer service.
We remain entirely focused on serving the needs of borrowers and savers, without the soaring costs and operational complexity of transactional banking products like current accounts.
01:25 PM BST
Bitcoin slumps as Fed predicts fewer interest rate cuts
Bitcoin has fallen to its lowest level in a month after the Federal Reserve predicted it would make fewer interest rate cuts this year.
The world’s largest cryptocurrency has dropped as much as 2.7pc today to trade around $65,000.
Smaller tokens such as Ether, Solana and Dogecoin also sank.
Some $600m was pulled from digital-asset products last week, the most since March, data from CoinShares International show.
It comes as markets reduce bets on interest rate cuts this year, with derivatives trades indicating there will be only one reduction this year which could come as late as December.
BTC Markets chief executive Caroline Bowler said: “Crypto is becoming increasingly exposed to macro triggers.”
01:08 PM BST
Asda only major supermarket to post drop in sales
Mohsin Issa’s turnaround efforts at Asda have been dealt a fresh blow after it became the only major supermarket to post a drop in sales.
Our retail editor Hannah Boland has the latest:
Sales figures at Asda were down 4pc in the 12 weeks to June 9, according to new figures from industry analysis firm Kantar, with the supermarket’s market share falling to 12.8pc from 13.7pc last year.
This only increased the gap between Asda and its two largest rivals, Tesco and Sainsbury’s, which both managed to grow sales in the last quarter.
Tesco’s market share rose from 27.1pc to 27.7pc over the period, while Sainsbury’s portion jumped to 15.2pc from 14.9pc.
This chart shows how Asda is losing ground.
12:44 PM BST
FTSE giant has no immediate plans for US listing
Plant hire company Ashtead Group has said it has no immediate plans to move its listing to the United States after revealing slower than forecast revenue growth.
Chief executive Brendan Horgan told analysts that the board periodically discussed “listing residency”.
He said investors would be informed of any change, but none was planned for now.
The denial came after the Telegraph revealed this month that it is in the early stages of considering whether to switch its stock market listing from the UK to the US, which is where the vast bulk of its business is generated.
The equipment rental group’s shares fell 4.7pc to a nearly three-month low today. It was the biggest loser on the FTSE 100.
12:28 PM BST
Tata steel workers begin industrial action over Port Talbot
Workers at steel giant Tata have launched a work to rule and overtime ban in protest at the company’s plans to close blast furnaces at its biggest plant.
Tata is switching to a greener form of production at Port Talbot in south Wales, which needs fewer workers.
Unite said 1,500 of its members based in Port Talbot and Llanwern started industrial action today, warning that strikes will be held if the company does not row back on its plans.
Unite general secretary Sharon Graham said:
Tata’s workers are taking this industrial action because they know the company’s claim that jobs cannot be retained in south Wales during the transition to green steel is a lie.
They are standing up and fighting for a better future, one in which Tata’s British business can take full advantage of the coming green steel boom and not be sacrificed to benefit its operations abroad.
A Tata spokesman said: “Of the 4,500 Tata Steel UK employees in Port Talbot and Llanwern, 1,366 Unite members were balloted, 857 voted and of those 468 members voted for industrial action including strike action.
“We have challenged the legality of their ballot process on multiple occasions and our position is that their industrial action is unlawful.”
11:58 AM BST
‘Pickup’ in business leads to fewer insolvencies
Fewer companies went bust last month amid a pick-up in business activity across England and Wales, according to official data.
Company insolvencies fell 6pc between April and May to 2,006, which is 21pc lower than in May 2023, the Insolvency Service said.
The number of firms going out of business rose steadily during 2021 and 2022, with 2023 seeing the highest annual number of company insolvencies since 1993.
Experts said the fall last month reflects better trading conditions for businesses than the end of last year, when the UK went into a small recession.
Benjamin Wiles, managing director at data company Kroll, said:
Compared to this time last year, we are seeing a pickup in business activity with key indicators showing improving consumer and business confidence.
While I think it’s fair to say that we aren’t quite out of the woods, compared to twelve months ago when businesses were managing unpredictable cost inflation and energy bills, it does feel there’s now a lot more certainty for companies to plan.
11:40 AM BST
Wall Street awaits retail sales figures
US stock indexes were hovering around record highs ahead of retail sales data and commentary from a number of Federal Reserve officials.
Technology stocks lifted the benchmark S&P 500 to its fifth record high close in six sessions on Monday, and the Nasdaq to its sixth consecutive record close.
Megacaps Apple, Microsoft and Alphabet edged higher between 0.1pc and 0.7pc in premarket trading on Tuesday.
Chipmakers Broadcom, Micron and US-listed shares of Arm Holdings rose between 0.5pc and 2.7pc after their strong showing on Monday boosted the Philadelphia SE Semiconductor index to a record high.
Focus now moves to fresh economic data in the United States, where May retail sales will be closely watched.
Comments from Federal Reserve officials will also be scrutinised for clues on how the central bank’s members view the current economic situation and path ahead for monetary policy.
In premarket trading, the Dow Jones Industrial Average and S&P 500 were little changed, while Nasdaq 100 futures up 0.2pc.
11:24 AM BST
French stock market ‘most unloved in Europe’ after snap election plunge
France’s stock market has become the least favourite in Europe, a Wall Street bank has found, after its sharp plunge in the wake of Emmanuel Macron’s shock snap election.
Investors were more likely to expect French stocks to fall over the next 12 months compared to any other equities across the continent, according to a poll of fund managers by Bank of America.
It is a sharp swing from May when investors considered stocks in French markets to be their top choice and the Cac 40 index in Paris was hitting record highs.
Bank of America conducted the survey from June 7 to June 13, encompassing the majority of last week’s drop, when the Cac 40 fell by the most in more than two years and wiped out $258bn (£203bn) in market capitalisation.
BofA strategist Andreas Bruckner said: “France has turned into investors’ most unloved European equity market.”
The Cac 40 has rebounded since its fall of 6.2pc last week, and was last up 0.4pc.
10:56 AM BST
Pound falls ahead of interest rate decision
The pound slipped to trade around a one-month low against the dollar as investors wait for inflation figures and the Bank of England’s interest rate decision this week.
Sterling was also down slightly against the euro, pulling away from a two-year high touched on Friday.
The pound has been buffeted over the last week by swings in the euro and dollar as global currency markets have digested US inflation data, a Federal Reserve meeting and French President Emmanuel Macron’s decision to call snap elections.
The euro has tumbled and the dollar has strengthened against most currencies as the threat of a far-right government in France has pushed investors towards the safety of the US currency.
Sterling was down 0.1pc on Tuesday at $1.269 as the dollar strengthened against most currencies, just above a one-month low of $1.266 touched on Friday.
Meanwhile, the euro was up very slightly against the pound at 84.5p, after sliding 0.6pc last week to as low as 83.97 pence.
The BoE’s monetary policy committee (MPC) is widely expected to leave interest rates at 5.25pc on Thursday, although investors will scrutinise the accompanying statement for any hints about when borrowing costs might fall.
Consumer price index (CPI) data due on Wednesday is expected to show Britain’s inflation rate fell back to the BoE’s 2pc target in May, from 2.3pc in April.
10:38 AM BST
Oil steady after Wall Street delivers boost
Oil held its biggest advance in a week amid a more buoyant mood on US stock markets, which has helped push European indexes higher.
Brent was down 0.3pc to just below $84 a barrel after rising 2pc on Monday, while West Texas Intermediate was down 0.4pc near $80.
Stock markets have moved higher this week, with the S&P 500 hitting its 30th record this year, despite the Federal Reserve reducing expectations for interest rate cuts. The optimism in wider markets is helping crude.
10:18 AM BST
German investor confidence rises less than expected
German consumer confidence improved last month but not at the pace analysts had anticipated, casting doubts over its rebound from a slump at the end of last year.
The Zew Institute’s expectations gauge rose to 47.5 in June from 47.1 in May, which was below forecasts for a reading of 50.
Zew president Achim Wamback said:
Both the sentiment and the situation indicators stagnate.
These developments must be interpreted in the context of a constant situation indicator for the eurozone as a whole.
Germany Zew Economic Sentiment Indexhttps://t.co/2TOP8G26fS pic.twitter.com/Kr00azWPUS
— TRADING ECONOMICS (@tEconomics) June 18, 2024
10:02 AM BST
Eurozone inflation hits 2.6pc
Inflation ticked higher in the eurozone last month, official figures confirmed, adding to expectations that interest rates will be held steady in July after a cut in June.
The consumer prices index rose to 2.6pc in May, up from 2.4pc in April, according to Eurostat. The figure was in line with initial estimates.
Euro area annual #inflation up to 2.6% in May 2024 https://t.co/RfWPrlrXD7 pic.twitter.com/qkNq8Xh4rR
— EU_Eurostat (@EU_Eurostat) June 18, 2024
09:43 AM BST
Season ticket use slumps to record low
The percentage of train journeys made using season tickets has fallen to a record low, according to new figures.
Office of Rail and Road (ORR) data shows the tickets accounted for just 13pc of the 1.6bn journeys taken on Britain’s railways in the year to the end of March.
That is down from 15pc during the previous 12 months, and is the lowest percentage in records dating back to 1987.
Around a third of train journeys before Covid restrictions began in March 2020 were made using season tickets.
The reduction since then has been driven by the increase in working from home.
Passengers who only travel to a place of work by train for part of the week often buy daily tickets as this is more cost-effective than weekly, monthly or annual season tickets.
Flexi season tickets aimed at commuters who travel to work two or three days a week were launched in June 2021, but their take-up has been minimal and they have been criticised for often offering little or no saving compared with daily tickets.
The rail industry was historically reliant on many commuters - particularly in south-east England - purchasing expensive annual season tickets for a large chunk of its total revenue.
09:28 AM BST
Gas prices hovering amid large stockpiles
Natural gas prices are switching between gains and losses as traders weigh up ample supplies with conflicts in the Middle East and Europe.
Dutch front-month futures were trading around €34 per megawatt hour, gaining as much as 1.5pc and losing as much as 0.9pc.
09:09 AM BST
Shell buys gas trader as it predicts rising demand
Shell has agreed to buy a Singapore-based liquefied natural gas (LNG) trader as it seeks to capitalise on rising demand as the world shifts away from dirtier fossil fuels.
The FTSE 100 oil giant said that it reached a deal, for an undisclosed sum, to buy Pavilion Energy from state-owned investor Temasek.
The new business has a contracted supply volume of about 6.5m tonnes per year of LNG, from suppliers including Chevron.
Pavilion’s global energy business covers LNG trading, shipping, natural gas supply and marketing activities in Asia and Europe, Shell said.
The acquisition, which is expected to complete in the first quarter of 2025, comes as Shell predicts LNG demand will rise by more than 50pc by 2040.
Zoe Yuinovich, Shell’s integrated gas and upstream director, said:
The acquisition of Pavilion Energy will strengthen Shell’s leadership position in LNG, bringing material volumes and additional flexibility into our global portfolio.
We will acquire Pavilion’s portfolio of LNG offtake and supply contracts, which includes additional access to strategic gas markets in Asia and Europe.
By integrating these into Shell’s global LNG portfolio, Shell is strongly positioned to deliver value from this transaction while helping to meet the energy security needs of our customers.
08:53 AM BST
European shares bounce back after French election sell-off
European shares bounced back for a second day after posting steep declines last week after Emmanuel Macron called surprise elections in France.
Bank stocks recovered, helping the pan-European Stoxx 600 rise by as much as 0.7pc.
Lenders in the region gained 1.4pc after an 8pc drop last week. Travel and leisure lead gains with a 1.8pc jump.
European shares posted their biggest weekly drop so far this year on Friday, as President Macron called for a snap election following a trouncing of his ruling centrist party in the European Parliament elections.
The Cac 40 in France gained as much as 0.9pc as trading began, a day after Paris lost its crown as Europe’s largest stock market to London. The Dax in Germany was up 0.5pc.
A final reading of May eurozone inflation and a German survey of economic sentiment due later could impact markets.
08:36 AM BST
FTSE 100 rises ahead of inflation figures
UK markets opened higher ahead of inflation data and the Bank of England’s interest rate decision this week.
The FTSE 100 was up 0.5pc, while the mid-cap FTSE 250 rose 0.5pc following rallies on Wall Street and in Asian markets overnight.
The UK’s benchmark index has been drifting between the 8,200 and 8,100 levels for the past two weeks, with a steeper decline expected if the index dips below the 8,100 mark.
The next big test comes from inflation figures on Wednesday and the Bank of England’s next monetary policy meeting on Thursday.
Among individual stocks, Whitbread gained 4.1pc after the Premier Inn owner reiterated its annual forecast.
Ashtead Group was the top loser on the FTSE 100, dropping 3.5pc after the plant hire forecast a slower growth in annual group rental revenue for fiscal 2025.
Meanwhile, XP Power plunged by 20pc after US rival Advanced Energy said it would not make a takeover bid.
All FTSE 350 sectors were in positive territory on the day.
08:26 AM BST
Rain hits grocery sales even as inflation falls to lowest since 2021
Consumers have cut their supermarket shopping due to the unseasonable weather, even as grocery price inflation fell for the 16th month in a row, figures show.
Supermarket prices are 2.1pc higher than a year ago, slowing for the 15th month in a row from May’s 2.4pc, according to analysts Kantar.
However, despite 36pc of households now describing their financial position as comfortable - the highest proportion since November 2021 - falling inflation and poor weather saw take-home grocery sales rise by just 1pc over the month, the slowest increase since June 2022.
Growth in footfall also stalled, with the average shopper visiting a supermarket 16.3 times this month, down from 16.4 in June last year.
Consumers bought nearly 25pc fewer suncare items this month compared with last year while prepared salads dipped by 11pc. Meanwhile, fresh soup sales jumped by almost 24pc.
Fraser McKevitt, head of retail and consumer insight at Kantar, said:
The sixth wettest spring on record hasn’t just dampened our spirits leading into summer, it’s made a mark on the grocery sector too as it seems Britons are being put off from popping to the shops.
We’re not yet reaching for those typical summertime products and are making some purchases you wouldn’t expect in June.
08:14 AM BST
Ashtead profits ‘soft’ amid New York listing speculation
Ashtead is not offering markets much “to get excited about” according to analysts, as bosses consider switching its listing from the UK to the US.
The company rents out heavy machinery and equipment, such as cranes, excavators and scaffolding, to the construction industry.
Matt Britzman, equity analyst at Hargreaves Lansdown said:
Ashtead’s markets are slowing. Hot off the heels of news that it may be looking to move its main listing to the US, this was a slightly soft set of results.
Whether you look at revenue, profit, or guidance, it’s hard to see much for markets to get excited about here.
Management would be forgiven for giving slightly conservative guidance for the coming year after several disappointments of late, and it looks like that’s the case.
But rental giant Ashtead is still demonstrating its strength, just in a softer market.
The larger construction equipment players are taking market share, and that plays right into Ashtead’s hands. Mega-projects in the US will continue to act as a medium-term tailwind, and it was positive to see rental rates showing strength in the final quarter.
This had been an area of concern going into the results. Longer term, the US rental market is fragmented and there’s a growing appreciation from end-users as to the benefits of rental over ownership.
08:05 AM BST
UK markets open higher after Wall Street rally
The FTSE 100 gained at the open after US stocks rallied to more records.
The UK’s benchmark stock index rose 0.6pc to 8,188.26 while the midcap FTSE 250 gained 0.5pc to 20,261.12.
08:03 AM BST
FTSE giant increases profits as it considers US switch
One of Britain’s leading blue-chip companies has revealed a decline in profits as it explores a move to New York which would be one of the biggest blows yet to the London Stock Exchange.
Ashtead, the FTSE 100 plant hire giant, said adjusted pre-tax earnings slipped 2pc to $2.2bn (£1.8bn)
The Telegraph revealed earlier this month that it is in the early stages of considering whether to switch its stock market listing from the UK to the US, which is where the vast bulk of its business is generated.
US revenues grew by 13pc to $9.3bn (£7.3bn), while UK revenues were up 8pc to $887.6m (£706m).
Chief executive Brendan Horgan said:
Our end markets in North America remain robust with healthy demand, supported in the US by the increasing proportion of mega projects and the ongoing impact of the legislative acts.
We are in a position of strength, with the operational flexibility and financial capacity to capitalise on the opportunities arising from these market conditions and ongoing structural changes.
07:50 AM BST
Tesla rival Fisker files for bankruptcy as EV sales slump
An electric vehicle start-up in the US has filed for bankruptcy after failing to secure investment amid waning consumer demand.
Fisker filed a bankruptcy petition in Delaware on Monday after announcing weaker-than-expected earnings and plans to cut 15pc of its workforce.
The Tesla challenger, started by James Bond car designer Henrik Fisker, has seen its share price plummet by 99pc as it battled a cash crunch.
In March it announced plans to cut prices by as much as 39pc as the business battled to stay afloat amid a slowdown in electric vehicle sales in the US and Europe.
It has filed for bankruptcy after failing to secure investment from an unidentified car maker, which would have unlocked another $150m in financing from its existing lender.
Mr Fisker designed the BMW Z8 driven by Pierce Brosnan as James Bond in The World Is Not Enough.
07:35 AM BST
US bidder abandons efforts to buy XP Power
A US-listed chip manufacturer has abandoned its hostile takeover bid for UK-based XP Power.
Advanced Energy, a major XP rival, said it does not intend to make a further offer after the board of the FTSE listed group rejected three separate proposals.
Despite hoping to put pressure on the XP board, four shareholders had backed chairman Jamie Pike for rejecting the approach and said the £19.50 offer undervalued the power converter group.
The Nasdaq-listed tech company said it had been prevented from doing its due diligence after trying to engage with the board.
Advanced Energy, which was being advised by JP Morgan and HSBC, previously criticised the XP board for a “lack of engagement”.
The UK-founded group is a major designer of high-tech power converters to the semiconductor and healthcare industry, with its hardware used in machines like hospital CT scanners.
07:20 AM BST
Premier Inn owner confident as it cuts costs and boosts sales
Premier Inn owner Whitbread said it is confident about the year ahead as it increased sales and cut costs amid falling inflation.
Group total sales grew 1pc to £739m, which it said was “driven by improved UK trading and continued progress in Germany”.
Its £150m share buyback is on track, it said, with 3.2m shares purchased so far for £96m.
In a trading update to shareholders, it said:
In the UK, recent trading has been more encouraging as we move into the peak periods of the year and our forward booked position remains positive.
We are continuing to execute our commercial programme and net inflation is now expected to be at the lower end of guidance as a result of increased cost efficiencies.
07:10 AM BST
Australia holds interest rates with inflation warning
Australia’s central bank held interest rates steady as expected but warned there were still reasons to be vigilant against inflation risks.
Wrapping up its June policy meeting, the Reserve Bank of Australia (RBA) kept rates at a 12-year high of 4.35pc, where they have been since a hike in November last year. It repeated that it was not ruling anything in or out on policy.
The RBA Board said:
The economic outlook remains uncertain and recent data have demonstrated that the process of returning inflation to target is unlikely to be smooth.
While recent data have been mixed, they have reinforced the need to remain vigilant to upside risks to inflation.
The Australian dollar was little changed at $0.6612 as the statement contained few surprises, while swaps slightly pared back the chance of a rate cut in December to 55pc from 65pc before the decision.
06:59 AM BST
Wind to overtake gas as UK’s main electricity source for the first time
Wind is poised to overtake gas as Britain’s main source of electricity for the first time this year, as the country moves increasingly towards green energy.
Research from Offshore Energies UK shows how wind outperformed gas during the first four months of 2024, with experts predicting that this trend will continue throughout the year.
The industry body’s new report said: “It is possible wind (onshore and offshore) will be the largest supply source of electricity this year.
“Wind has provided more supplies than gas in the first four months of the year. This led to the carbon intensity of the UK grid falling to its lowest daily level on April 15, at 19g of CO2 per kilowatt hour.”
Last year, wind generated 82 terawatt hours (TWh) of power compared with 96TWh from gas and 37TWh from nuclear.
However, several major wind farms have come into operation in recent months, including the world’s largest farm at Dogger Bank in the North Sea, 75 miles off the Yorkshire coast.
When complete, Dogger Bank will consist of 277 giant offshore turbines that generate enough electricity to power 6m homes a year.
It and others like it have pushed wind output to record levels.
The report said: “Gas will still have an important role in bringing flexibility to the system but offshore wind will provide most of the growth in power supply in the coming decades as the Government aims to deliver a decarbonised power system by 2035.
“The UK has about 15 gigawatts (GW) of offshore wind generation capacity, with targets to grow this to 50GW by 2030.”
However, the report also warned that reaching this target will be a challenge requiring
the UK to install around two turbines a day for the next seven years.
It said: “There is a huge opportunity to grow low-carbon power supplies, increase manufacturing capacity and provide new business opportunities. But cost inflation, longer consenting timeframes and grid access all complicate the picture, deterring some investors.”
The same report also found that British consumers had to spend £80bn on imported fuels such as petrol, diesel and gas last year because of shrinking output from the North Sea.
Those costs are likely to keep increasing because oil and gas output from the North Sea is shrinking at 8pc a year, partly because of the current Government’s windfall tax deterring investors.
06:44 AM BST
Good morning
Thanks for joining us. The energy sector is our initial focus today as new research indicates that wind will overtake gas as Britain’s main source of electricity for the first time this year.
Offshore Energies UK said wind had outperformed gas in the first four months of this year and the introduction of new wind farms in recent months is expected to continue the trend.
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What happened overnight
Asian stocks tracked Wall Street higher, while the Australian dollar held steady after its central bank offered few surprises in its policy decision.
The Reserve Bank of Australia (RBA) kept rates at a 12-year high of 4.35pc, as expected, but warned there were still reasons to be vigilant against inflation risks.
Traders pared back on bets of a rate cut this year in the wake of the RBA decision, though the Aussie dollar was little changed as the statement contained few surprises. It last bought $0.6612.
Ebbing worries over political turmoil in Europe added to the buoyant market mood on Tuesday and sent the Euro Stoxx 50 higher by 0.4pc in premarket trading, reversing some of its steep losses from last week. FTSE futures similarly rose 0.3pc.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.6pc, helped by an overnight rally on Wall Street.
The Nikkei in Japan was up 0.8pc and S&P/ASX 200 in Australia was up 0.9pc. The Hang Seng in Hong Kong was down 0.1pc.
On Wall Street, American stocks slowly gained steam after a sluggish start to the session to send the Nasdaq Composite and S&P 500 to record highs.
The Dow Jones Industrial Average rose 0.5pc, to 38,778.10, the S&P 500 gained 0.8pc, to 5,473.23, and the Nasdaq Composite gained 1pc, to 17,857.02.
In the bond market, the yield on the 10-year Treasury bonds climbed to 4.29pc from 4.22pc late on Friday.