Yahoo Finance FTSE 100 Live 25 July: Wise shares halted, Revolut receives banking licence
Results by Lloyds, Centrica and many other FTSE 100 stocks were today caught up in a wider stock market slump.
The reverse for European markets follows a 6% decline for Wall Street’s Magnificent Seven.
Other London-listed stocks reporting today have included BT Group, Unilever and Vodafone.
FTSE 100 Live Thursday
Big fall for Centrica profits
US tech stock in big slump
Lloyds sticks to guidance
That's all folks
17:10
That concludes our live markets coverage today, the day on which fintech giant Revolut finally secured its UK banking licence.
The Standard City desk will be back from 7am tomorrow with more breaking business news, including coverage of results from NatWest -- one to watch. We hope you can join us then.
FTSE finishes higher
16:46
After a poor start this morning, an afternoon rally means the FTSE 100 has ended today’s trading session higher, up 33 points to 8,186.
Shares in Wise were suspended due to volatility but later largely recovered after previous trades were cancelled.
Centrica remained among the poorest performing London stocks today, with the British Gas owner finishing the session down as much as 8%.
AJ Bell investment analyst Dan Coatsworth said: “Results from British Gas owner Centrica are a reminder of just how cyclical its business is. While other suppliers were squeezed by the energy crisis, Centrica’s wholesale operation meant it was a direct beneficiary of an increase in oil, gas and electricity prices.
“Therefore, a halving of profit as prices come down shouldn’t come as a major surprise given what Centrica rather euphemistically calls a ‘normalised’ market. A return to normality is not a message to enthuse shareholders given that pre-energy crisis Centrica’s shares had struggled as customer numbers in its retail operation dwindled and its wholesale arm struggled.”
Tepid start to session on Wall Street despite strong GDP numbers
15:07
Shares were largely unchanged in a tepid start to the opening minutes of trade on Wall Street, as better-than-expected US GDP data helped stem any further stock falls after yesterday saw the biggest one-day drop in two years.
The S&P 500 opened higher by 0.03%, at 5,428.70, while the Nasdaq Composite gained 0.06%, to 17,352.64 at the opening bell.
Wise shares recover after trading resumes
14:06 , Simon Hunt
Wise shares have now recovered after a resumption in trade, though they remain down about 6% compared to this morning -- a fat finger error, perhaps?
Wise shares halted after tumble
13:28 , Simon Hunt
Shares in London fintech Wise have just been halted for volatility after suddenly tumbling more than 10%.
More as we get it.
City Spy: Revolut's UK banking licence is fantastic news...for the FT
13:19
Congratulations are in order to Nik Storonsky, co-founder of Revolut and arguably the most patient businessman in London. He has had to wait a tedious three years to finally secure a British banking licence, opening the door up to further expansion for the $45 billion fintech.
This is fantastic news…for the FT. Some time ago, the Pink’un struck a deal with Revolut to be included in the bank’s premium Metal account service. For the £14.99 monthly fee, customers get a suite of benefits including insurance, WeWork access, and of course a free FT digital subscription, which by itself costs more than double if you get it with the paper separately.
Spy has met plenty of folk who say they’ve opened an account with Revolut purely for the discount on access to the FT…including a member of the Standard City desk, who shall remain nameless.
In its most recent annual report, Revolut pocketed around a quarter of a billion pounds from its premium account fees, and this is sure to go up as Britain’s newest bank grows. Spy wonders quite how much the FT stands to benefit.
City Comment: Nationwide's new mortgages are part of a pattern
12:31 , Simon English
Nationwide is offering a new mortgage deal at 3.99% -- a tasty offer that one hopes rival banks will try to follow.
But wait, it’s not as good as it seems.
For a start the five-year deal is only available to those with a 40% deposit – it does nothing for people, like first-time buyers, who don’t already have property wealth.
And so it doesn’t do much for the children of members – who just voted to allow CEO Debbie Crosbie to triple her bonus payments, to make sure she is paid like the banker she insists she is not.
There is a pattern here since Crosbie became CEO. There are reward payments to members, which turn out not to go to all members, which is hardly the Nationwide spirit.
Unilever margin progress boosts shares, FTSE 100 lower
10:35 , Graeme Evans
Buoyant Unilever shares today provided the best performance of a packed session for FTSE 100 results.
The half-year earnings of the Knorr and Hellmann’s business beat City targets in another boost for the margin-focused strategy of boss Hein Schumacher.
Shares jumped 6% or 243p to a record 4640p, even though sales growth by the London market’s fourth biggest company came in a little short of expectations.
British American Tobacco and the LexisNexis firm RELX were also higher following results, but they were the exceptions on a day laden with blue-chip earnings.
Last night’s big slide for US technology stocks was a big factor in the cautious response of investors, leaving the FTSE 100 index down by 0.8% or 63.93 points to 8089.76.
The decline was smaller than leading benchmarks elsewhere in Europe and the mid-cap FTSE 250 index, which retreated 1.1% or 230.31 points to 20,720.53.
Big fallers in London’s FTSE 100 included the Alphabet backer Pershing Square Holdings, which reversed 6% or 254p to 3840p.
AstraZeneca also lost 410p to 11,804p, even though the pharmaceuticals group’s results showed second quarter revenues growth of 18% and upgraded full-year guidance.
Other stocks under pressure included Rentokil Initial, which fell 28.1p to 445.6p amid more signs of limited growth momentum for its North America pest control operation.
And kitchens supplier Howden Joinery fell by 32p to 915.5p despite posting an “encouraging” first half performance, with profits of £112.3 million in line with last year and up 44% on their pre-Covid level.
“Solid” Lloyds results fail to boost shares
08:43 , Graeme Evans
Lloyds Banking Group results are steady rather than spectacular, according to Interactive Investor’s head of markets Richard Hunter.
He said positives include signs of a trough in the crucial metric of net interest margin, with the bank cautiously guiding for a figure in excess of 2.9% for the year as a whole.
In the second quarter, pre-tax profit of £1.7 billion exceeded both the year’s previous £1.61 billion and market expectations of £1.58 billion.
Today’s 2% decline for shares follows a particularly strong six-month run, which has propelled the price 42% higher.
Hunter said: “As a longer-term play based on shareholder returns, improving prospects and a historically undemanding valuation, the market consensus of the shares as a buy is likely to remain intact.”
Centrica down 8% amid FTSE 100 reverse, Unilever up 7%
08:28 , Graeme Evans
The FTSE 100 index is down 0.7% or 59.15 points to 8094.54 amid the global sell-off.
On the results front, Centrica shares are the worst performing following a slide of 8% or 11.3p to 131.6p.
Lloyds shares have fallen 2% and BT Group is off by 4%.
AstraZeneca shares are also down 2% even though the pharmaceuticals group upgraded its sales and profits guidance.
Unilever shares are top of the FTSE 100 index, rising 7% or 291p to 4688p.
IG Group chief market analyst Chris Beauchamp said: "While quarterly sales missed forecasts, the improvement in margins points the way to improved profitability later in the year."
BT points to 'record' fibre optic internet network expansion but profit falls
07:56 , Michael Hunter
BT has said it brought its full-fibre internet network within reach of 1 million more premises in the first quarter.
It extended the network at a rate of 78,000 premises per week and there are now over 5 million in total that can be hooked up to it. Orders rose 29%.
Reported profit before tax at the fixed-line operator fell 3% to £520 million from revenue of £5 billion, down 2%.
It stood by its guidance for the full year.
Vodafone supports Ofcom contract changes but expects a revenue knock
07:56 , Simon Hunt
The boss of Vodafone has said she supports new Ofcom rules which ban unexpected mid-contract inflation-linked price rises for mobile customers, but signaled that the firm would likely get a knock to its revenues as a result of the new measures.
Margherita Della Valle told the Standard: “We are very supportive of the Ofcom decision and we have already implemented it for future contracts. It means you have to be transparent and it makes things very predictable for the customer, which is a good thing.”
She added that any impact on revenues was “something that will come into play in the future.”
Vodafone today said total UK revenue increased by 0.3% in the three months to the end of June as lower inflation was driving a revenue slowdown. Higher service revenue and an appreciation of the pound sterling against the euro were offset by lower equipment revenue.
The firm’s mobile contract customer base increased by 22,000 in the quarter. However, this was offset by large low-value contract disconnections in Business, resulting in the total contract customer base declining by 29,000 in Q1.
Lloyds profits fall but dividend up 15%
07:50 , Graeme Evans
Lloyds Banking Group today reported a 14% drop in half-year pre-tax profits to £3.3 billion.
The decline followed a 10% fall in underlying net income to £6.3 billion, driven by a lower net interest margin of 2.94%. Operating costs also rose 7%, partly offset by a lower provision for bad debts.
Chief executive Charlie Nunn made no changes to 2024 guidance, while he remains confident in meeting the lender’s 2026 strategic objectives.
The dividend is up 15% to 1.06p a share, which is equivalent to £662 million.
Centrica profits down by three quarters to £1.7 billion with British Gas owner in 'normalised environment'
07:39 , Michael Hunter
The owner of British Gas, Centrica, revealed a sharp drop in profit today and said it was in “a more normalised environment”.
After energy prices fell back from the elevated levels hit after Russia’s invasion of Ukraine, the FTSE 100 company said its operating profit was £1.7 billion, down 74%.
It faced allegations of profiteering at the height of the crisis, when it reported record profits of over £3 billion for the 2022 financial year.
Today, Centrica also said the future of its gas storage business looked “challenging” with energy markets back to normal. Its facility at Rough was upgraded during the price spikes, and was now faced with what Centrica called “low seasonal spreads”.
It also said there were “marked improvements in customer satisfaction.
Magnificent Seven stocks down 5.9%, Tesla off 12%
07:26 , Graeme Evans
Wall Street’s Magnificent Seven endured their worst day since September 2022 after falling 5.9%, led by a 12% reverse for Tesla
Their struggles meant the S&P 500 had its biggest fall since December 2022, ending one of the longest runs without a decline of more than 2%.
Deutsche Bank noted that the slump followed a period when the S&P 500 had been up for 28 of the last 38 weeks.
It said the current elevated position, the fact that markets often struggle in the late-summer and the unusually high political uncertainty created several near-term challenges that made for a tougher backdrop.
The trigger came from Tesla and Alphabet results, with shares of the electric car maker posting their worst daily performance since September 2020.
Revolut receives UK banking licence
07:14 , Simon Hunt
Revolut has received its UK banking licence after a three-year wait, the London fintech revealed today.
Revolut now enters the ‘mobilisation’ stage, sometimes referred to as ‘Authorisation with Restrictions’, a common step for many new banks in the UK, the firm said. During this period, banks can only hold £50,000 of total customer deposits. According to the Bank of England, mobilisation “could take as little as a few months but cannot continue indefinitely and should take no longer than 12 months.”
Nik Storonsky, CEO of Revolut, said: “We are incredibly proud to reach this important milestone in the journey of the company and we will ensure we deliver on making Revolut the bank of choice for UK customers.”
Revolut first applied for a banking licence in 2021 but has waited an unusually long time for a verdict from regulators. That led to speculation, including a report in the Telegraph, that the Bank of England was planning to turn down the firm’s bid for a licence.
FTSE 100 seen lower after US tech reverse, Nikkei 225 down 3%
07:08 , Graeme Evans
Wall Street’s technology sell-off means the FTSE 100 index is under pressure on one of the busiest days of the year for corporate updates.
Reports by blue-chips including Lloyds, AstraZeneca and Unilever will provide a test of confidence at a time when global interest in UK equities is growing.
Last night’s slump in the US saw the S&P 500 index fall by more than 2% and the Nasdaq Composite by 3.6% in their worst performances since 2022.
Semiconductor firm Nvidia slumped 7% and Alphabet by 5%, with the reaction to Tuesday’s results by the Google owner and by Tesla one factor in the sell-off.
The tech-heavy Nikkei 225 followed Wall Street’s lead by dropping 3.2%, but London’s old economy focus means the FTSE 100 index is set to decline 0.5%.
Recap: Yesterday's top headlines
Wednesday 24 July 2024 18:17 , Simon Hunt
Good morning from the Standard City desk.
Jagjit Chadha, director of the National Institute of Economic and Social Research, says the UK is on track for a “fiscal farce”.
He says the UK government sets “an arbitrary” level of debt it must not pass.
When it does, it just changes the rules.
So the Office for Budget Responsibility will decide that “some items of debt can be excluded from the count”. Hence, as he sees it, the turning of “economic tragedy” into the aforementioned farce.
It’s a reasonable point of view, well expressed.
There’s another way of looking at it.
Which is that since the debt level is, as he says, arbitrary, and that level will be broken at will anyway, why have the rule in the first place?
No City economist thinks that the UK is in any danger of going “bust” or “bankrupt” or any variant thereof. It has its own currency, it can spend more or less what it likes.
The question is whether it should do that.
As for predictions of economic calamity, well, depending on your definition of calamity, they tend to be overdone.
Liz Truss gave it her best shot, but the bond markets recovered remarkably quickly once she was gone.
The government’s ability to borrow as it wishes at relatively cheap rates is back in place.
~
Here’s a summary of our top headlines from yesterday:
End of the road for 1ps and 2ps? Royal Mint has been told by the Treasury that it would not have to mint any new coins for general circulation this year, which would be the first time in history that the Treasury's annual order for all coin denominations is nil. Treasury officials are exploring options over the future of 1 and 2p coins, including a scenario in which they are phased out from circulation, but no decision has been taken.
Aston Martin sales for the second quarter come in ahead of market expectations but losses widen – carmaker says sales will pick up in the second half of the year as is prepares to ramp up production of new V12 flagship Vanquish
Heathrow: passenger number hits a record just under 40 million in the six months to the end of June, with 30 June its busiest ever day
Durex condom maker Reckitt Benckiser has pledged to sell off its home care and nutrition brands as part of a simplification drive, instead focusing on health and hygiene.
UK events group Informa has snapped up listed rival Ascential, the owner of the Cannes Lions festivals and Money 20/20.
Crown Estate: Record Net revenue profit of £1.1 billion going back to the public purse from its £14 billion property portfolio including much of the West End. Its “park-to-park” project will bring more trees and pedestrian space to Regent Street
