Borrowing costs continue to be in focus after a rocky week for markets on both sides of the Atlantic.
The UK’s 10-year gilt yield last night reached its highest level in a year amid City concerns over the Government’s fiscal plans.
US markets closed sharply lower last night, with tech stocks on the frontline of the selling,
FTSE 100 Live Friday
- House price growth slows
- Apple shares fall despite record quarter
- Boohoo names new CEO
Market update: FTSE 100 in steadier session, Reckitt shares jump 9%
10:04 , Graeme EvansA challenging week for financial markets is finishing on a calmer note after the FTSE 100 index posted its first rise in four sessions.
London’s top flight matched the improvement of European benchmarks by trading 0.5% or 39.57 points higher at 8149.67. It started the week at 8248.
Bets that interest rates will take longer to fall have hit stock markets globally, while a negative reaction to Microsoft results last night contributed to a 1.9% decline for the S&P 500 index.
UK housebuilders were the target of heavy selling yesterday as investors digested the rates outlook and impact of Budget changes in stamp duty.
Persimmon put back 3.5p to 1470.5p this morning, having fallen 7% yesterday, while Taylor Wimpey and Barratt Redrow were close to their opening mark.
The biggest fallers in today’s session came from the travel sector after the price of Brent Crude rose 3% to $74.78 on speculation that Iran is planning an attack on Israel.
Shares in British Airways owner IAG fell 3.6p to 207.3p and easyJet dipped 9p to 501.8p, while BP and Shell moved the other way with rises of about 1.5%.
Reckitt Benckiser topped the FTSE 100, lifting 9% or 422p to 5106p amid relief that a Missouri court had rejected claims against its Mead Johnson division in a case relating to a baby formula product.
The US company last night welcomed the decision and said it intended to vigorously defend itself in all other cases.
Other risers included Tesco, which lifted 4.9p to 347.1p after completing the sale of its banking operations to Barclays and promising to return the £700 million proceeds to shareholders through a buyback programme.
There was also a rise of 7.6p to 543p for Rolls-Royce while Lloyds Banking Group ended a difficult week half a penny higher at 53.9p.
The FTSE 250 index was broadly unchanged at 20,287.11, with cruise ship firm Carnival and Aston Martin Lagonda among the stocks down by 2%.
On AIM, Boohoo shares rose 0.8p to 30.4p after it promoted Dan Finley to become its new chief executive. He has been in charge of Debenhams since Boohoo bought the department store chain out of administration in 2022.
Boohoo had been under pressure from major shareholder Frasers Group to consider the appointment of Sports Direct founder Mike Ashley.
Rates outlook dented as bond market jitters continue
09:15 , Graeme EvansMarket jitters over the Government’s borrowing plans today pushed the 10-year gilt yield back above 4.5% at one point this morning.
Bond yields have also risen globally in recent days, including in the United States amid expectations of higher-for-longer interest rates.
In the UK, traders are now pricing the equivalent of 80 basis points of interest rate cuts by June compared with the 86 seen before Wednesday’s Budget.
The next meeting of the Bank of England’s monetary policy committee concludes on Thursday, with Deutsche Bank expecting an 8-1 decision in favour of the second quarter point cut of the cycle to 4.75%.
Economist Sanjay Raja said: “Governor Bailey signalled a potential shift to a 'more activist' approach should data continue to move in line with expectations.
“But the recent fiscal news will likely throw a wrench in the MPC's confidence levels that excess demand pressures are receding. As such, we now think the MPC refrains from any explicit dovish pivot in its November decision.”
Court decision boosts Reckitt shares
08:39 , Graeme EvansReckitt Benckiser shares have jumped 10%, up 478p to 5162p, after the FTSE 100 company was boosted by a favourable court ruling in the US.
The hearing in St Louis, Missouri rejected claims that linked baby formula produced by Reckitt’s Mead Johnson subsidiary with bowel inflammation in the case of one infant.
Reckitt shares fell sharply earlier this year after a large number of product liability actions were filed against Mead Johnson. The US company last night welcomed the decision and said it intended to vigorously defend itself in all other cases.
FTSE 100 higher, housebuilders steady
08:10 , Graeme EvansThe FTSE 100 index is 35.79 points higher at 8145.89, having fallen in the three previous sessions.
Housebuilding stocks steadied after yesterday’s slump, with Persimmon and Taylor Wimpey up by half a percentage point.
The 10-year gilt yield crept up to 4.47% this morning, having closed last night at 4.43% on concerns over the government’s fiscal plans.
The benchmark had been above 4.51% at one point yesterday.
Annual house price growth slows
07:49 , Graeme EvansThe price of a typical UK home increased by 2.4% in the year to October, down from the 3.2% pace recorded by Nationwide in September.
Today figures from the building society show that house prices rose by 0.1% month-on-month last month, after taking account of seasonal effects. The UK average price stands at £265,738.
Solid labour market conditions, with low levels of unemployment and strong income gains, have helped underpin a steady rise in activity and house prices since the start of the year.
Nationwide’’s chief economist Robert Gardner said: “Providing the economy continues to recover steadily, as we expect, housing market activity is likely to continue to strengthen gradually as affordability constraints ease through a combination of modestly lower interest rates and earnings outpacing house price growth.”
Apple guidance offsets record quarter, Amazon shares higher
07:33 , Graeme EvansTech giant Apple last night reported record sales for the September quarter of $94.9 billion, up 6% on a year earlier and ahead of Wall Street forecasts.
During the period, the company launched the iPhone 16 and new versions of its Apple Watch and AirPods.
Apple shares still fell 2% in after-hours dealing as the company signalled sales growth “in the low-to-mid single digits” for the holiday quarter.
There was a stronger response to results by Amazon, which beat Wall Street forecasts with its third quarter profits haul. Its shares traded 6% higher.
Boohoo promotes Debenhams boss to CEO role
07:22 , Graeme EvansBoohoo today ended speculation over its leadership by appointing current Debenhams boss Dan Finley as its new chief executive.
He joined the fast fashion business in January 2022 after Boohoo acquired the department store chain out of administration for £55 million.
Finley previously spent a decade as group multi-channel director at JD Sports.
Boohoo deputy chair Alistair McGeorge said: “Dan is one of the outstanding leaders in a new generation of digital retailers.
“Dan and his team have successfully transformed Debenhams from a failed department store, creating a new business model that is a capital-light, stock-light, high-growth marketplace.”
Boohoo had been under pressure from major shareholder Frasers Group to appoint Sports Direct founder Mike Ashley as its new chief executive.
FTSE 100 set for steadier session, US tech stocks reverse
07:03 , Graeme EvansThe FTSE 100 index is set for a steadier session after yesterday’s 0.6% decline left London’s top flight at its lowest level in almost three months.
Futures trading points to a flat opening at 8112, a level that compares with 8250 at the start of the week.
Global stock market sentiment has been shaken by fears over higher-for-longer interest rates, with the S&P 500 index last night down by 1.9%.
Tech stocks bore the brunt of heavy selling on Wall Street as Nvidia shares closed down by 4% and Microsoft lost 6% in a post-results sell-off.
In the UK, housebuilders including Persimmon fell by as much as 7% after the Budget dented the outlook for interest rate cuts.
The 10-year gilt yield this morning opened at 4.43%, having been at 4.17% at the start of the week. The pound is at $1.289.
