- FTSE 100 down 28 points at 9,424
- Defence companies, defensive stocks drag on index
- Ladbrokes owner Entain falls as growth slows
- CVS and Pets at Home rise after ‘tame’ CMA probe
4.45pm: FTSE 100 lags
The FTSE 100 closed out Wednesday’s session lower, down 28 points at 9,424, with the index lagging behind as luxury stocks rallied in Europe.
“The rebound in risk appetite has continued across the board today, shrugging off any further spat between the US and China, this time over cooking oil,” IG’s Chris Beauchamp said. “But save for Burberry the FTSE 100 is feeling the absence of any luxury names in its ranks.”
4.14pm: FTSE set to lose ground
It looked like the FTSE 100 was going to maybe close the gap in a last-gasp recovery for the second day in a row, but the index is set to lose ground on Wednesday’s session.
The drag has come from the likes of defence groups Babcock and BAE Systems (Israel deal, US govt shutdown), airline easyJet (Morgan Stanley note), as well as tobacco, insurance and utilities (which as bond proxies should be rising when gilt yields are falling, so not sure there).
London’s index is down “as investors considered increasing fiscal worries related to persistent inflation and possible tax increases from the UK government, all while processing a variety of corporate news”, says market analyst Patrick Munnelly at Tickmill.
Burberry has been a rare source of gains for the Footsie today, lifted along with the rest of the luxury sector by earnings from rival LVMH overnight.
“Buying French political turmoil has been one of the standout winners of late, as the CAC40 soars towards a new high despite the ongoing governmental troubles,” says Chris Beauchamp at IG.
3.43am: Gold up, gilts outperform, earnings season’s superb start
Gold prices hit new highs today, with the spot gold price breaking well above $4,200 this morning, before dropping back to below $4,18m and now back close to $4,200 again.
“Rising expectations for rate cuts in the US and the UK are helping to fuel the move higher in gold, as it gets bought as an inflation hedge,” says Kathleen Brooks at XTB.
The UK “may not be the most obvious place you would expect rate cuts”, she adds, with the IMF yesterday saying inflation is on course to remain the highest in the G7 for the foreseeable.
But Bank of England governor Andrew Bailey has spoken about how weakness in the labour market justifies further rate cuts down the line.
The UK’s growing tax take could weigh on growth, says Brooks, and also adds to pressure for rate cuts. Not forgetting the loosening labour market as evidenced in the ONS figures yesterday.
The interest rate futures market is fully pricing in two BoE rate cuts by next summer, up from last week’s expectation for just over one cut.
“This is why bond yields are falling sharply in the UK,” says Brooks, with 10-year gilt yields down 17bps in the past week, and UK government bonds being the top performers in the global sovereign debt space.
The UK is set to be the second-best performer in the G7 this year and next, according to the IMF, remember.
But Brooks says growth is still low, and Chancellor Reeves potentially boosting her fiscal headroom at the next budget “are all driving this rise in bond prices and decline in yields [and] thwarting GBP upside”.
The positive results in Europe from LVMH and ASML and in the US from the big banks “is helping to boost sentiment”, she added.
“Earnings season in the US has got off to a good start. So far, 39 out of the 500 companies listed on the S&P 500 have reported positive sales and growth surprises. Sales growth is higher by 7.9% and earnings growth by 14%, largely led by the finance sector.
“While it is early days in the Q3 earnings season, this is a fantastic start. Although there is a lot of geopolitics and geoeconomic noise in the background, investors are focusing on the fundamentals, and so far this points to further gains for stocks as it boosts the market mood.”
2.55pm: Banks help lift Wall Street at open
Wall Street has started positively, with the tech-powered Nasdaq and small-cap Russell 2000 leading the way.
The Nasdaq has jumped 1.1%, while the small and mid-cap index was up 1.4%.
The Dow Jones rose 0.8% and the S&P 500 was up 0.9%.
Top risers on the S&P were gain trader Bunge and investment bank Morgan Stanley, on the back of earnings. Bank of America also impressed with earnings.
1.40pm: Banker bonuses good for Treasury and the ‘real economy’
The reforms announced by the Bank of England’s PRA arm to accelerate how quickly bankers can receive their bonuses “won’t trigger Wolf of Wall Street scenes in the Square Mile,” says Alex Davies, CEO of Wealth Club.
He says the changes are “comparatively modest” but “are a smart move for the UK economy nonetheless”.
Quicker payouts will not only mean faster tax receipts for HM Treasury, but will also “unleash spending power straight into the real economy”.
“From property and home improvements to restaurants, holidays, and retail, these payments support jobs across a wide range of industries.
“Many bankers also back UK start-ups with their bonuses, helping to fund innovation, build companies, and create employment.
“The reforms make Britain more competitive on the global stage and underline that it is open for business. At the same time, with robust rules still in place, we should avoid the excesses that fuelled the last financial crisis. It’s about encouraging growth while keeping the system safe.”
1.09pm: US futures pointing higher
US futures are pointing to new highs, led by tech stocks.
The Nasdaq 100 e-mini is up 0.8%, while futures for the S&P 500 and Dow Jones are up 0.6% and 0.5%.
Risk is “back on the menu” says market analyst Fawad Razaqzada at City Index, although European markets are mixed.
In FX, the US dollar index fell against most major currencies, giving back some ground after its recent strong performance, he noted.
“Markets are being driven by a delicate mix of optimism and caution this week. The dominant theme remains rate-cut expectations from the Fed, which have helped sustain risk appetite,” he said, even though gold prices are also blazing to fresh record highs.
“Investors are largely shrugging off renewed US-China trade tensions, taking President Trump’s latest threat over cooking oil imports in their stride”.
Upbeat US bank earnings have “reinforced confidence in the resilience of corporate America, keeping equities supported despite the ongoing US government shutdown”.
12.32am: Yields drop on Reeves comments
UK gilt yields have dropped to their lowest in over two months after the Chancellor confirmed that she is “looking at tax and spending” as she prepares to announce her autumn Budget next month.
Rachel Reeves said she would “make sure the numbers add up”, in an interview with Sky News.
Analysts estimate she will have to increase taxes or cut spending to fill a hole in the public finances estimated at between £20 billion and £30 billion.
Reeves received the Office for Budget Responsibility’s (OBR) assessment of the economy on 3 October, including a big productivity downgrade.
Although yields have dropped, the pound slightly is up against the dollar and euro.
11.58pm: FTSE heavyweights in red
The FTSE is being weighed down by a broad cross-section of stocks, with all but two of the top 15 largest names all in the red (Rio Tinto and Lloyds are the exceptions).
From that group, AstraZeneca, Unilever, BAT, GSK, RELX, BAE Systems, National Grid and LSE are all down more than 1%.
Entain and IGS are the biggest fallers, with the latter having just updated its consensus estimates, which I would suggest might have been worse than the consensus, if that made any sense.
11.23am: BoE aligns banker rules with other markets
The Bank of England has loosened banker bonus rules, allowing bonuses to be collected sooner.
New remuneration rules have been unveiled by the BoE’s Prudential Regulatory Authority, enabling part-payment of bonuses for the most senior bankers from year one, rather than year three under previous rules.
The amount of time that senior bankers must now wait before receiving their full bonus will also be cut to four years from eight years under current rules.
With the rules coming into force as soon as tomorrow, it brings the UK more closely in line with many other countries.
11.01am: Airlines and Lloyds under broker microscope
A couple of interesting broker notes.
Morgan Stanley has initiated coverage of European airlines, with BA owner International Consolidated Airlines Group SA (LSE:IAG) and Ryanair top picks as analysts see diverging fortunes between long-haul and short-haul markets.
In short, they envisage a potential oversupply of European short-haul flights, contrasting with stronger supply “discipline” on transatlantic routes, particularly from the UK, where capacity is expected to fall by 2% this winter.
So IAG and Ryanair are ‘overweight’ rated, while increasing pressure is seen on low-cost carriers, with easyJet PLC (LSE:EZJ) rated ‘underweight’, and Jet2 PLC (AIM:JET2) and Wizz Air Holdings PLC (AIM:WIZZ) ‘equal-weight’.
Elsewhere, Jefferies has a note on Lloyds Banking Group PLC (LSE:LLOY) that begins by saying that “all great magic tricks have three parts: The Pledge, The Turn, and The Prestige.
“For Lloyds, the pledge came in early 2023 with a promised >15% ROTE in 2026. The turn was this year as its shares started to outperform. The prestige is still to come.”
The analysts see it involving a move involving more cash returns. “Sit tight. The magic may soon unfold.”
10.39am: FTSE down, gold up
The FTSE has sunk lower, but mainland European markets are firmly in the green, led by the French CAC and its pack of fashion houses.
Market analyst Josh Mahony at Scope Markets says the FTSE 100 has been “weighed down by renewed fiscal concerns after the chancellor warned of significant tax rises and spending cuts that could go further than required to plug the public finance gap”.
“While such measures may reduce the risk of repeated tax hikes later in her tenure, they also raise fears of fresh pressure on UK growth.”
The price of gold has pushed to yet another record high, up1.2% to above $4,200 earlier this morning.
Mahony says the prolonged US government shutdown is denting confidence in the world’s largest economy, with prediction markets now suggesting the stalemate could drag on for over a month.
“The longer the impasse runs, the stronger the narrative that the US is no longer the bastion of stability it once was, and in an increasingly polarised global environment, investors continue to gravitate toward assets without regional or political bias.
“Gold has emerged as that global store of value, free from supply manipulation, and bolstered by steady accumulation from countries like China. The recent US–China tensions serve as a reminder of why diversification into hard assets has become a structural theme for many,” he says.
9.50am: UK-Microsoft AI infrastructure deal
UK hypescaler Nscale has agreed an expanded deal with Microsoft Corp (NASDAQ:MSFT), where the pair will roll out Nvidia Corp (NASDAQ:NVDA, ETR:NVD) AI infrastructure across Europe and the US in “one of the largest AI infrastructure contracts ever signed”.
The agreement will be delivered through Nscale’s owned operations and its joint venture with Aker, as well as a collaboration with Dell Technologies Inc (NASDAQ:DELL).
Nscale said the partnership also reaffirms the existing plans with Microsoft to deliver the UK’s largest AI supercomputer..
9.14am: Audioboom hears nothing, British Land bullish
Some other bigger share price moves in London this morning.
Audioboom Group PLC (AIM:BOOM) fell almost 7% earlier but have come off a bit as the podcasting group reporting record third-quarter results but said it has yet to receive any formal takeover offers.
A strategic review was launched recently that included a potential sale of the entire business, following speculation linking possible suitors including Fox Corporation, iHeartMedia and Amazon.
However, Audioboom said no approaches had been made under UK takeover rules.
Elsewhere, British Land Company PLC (LSE:BLND) shares are up 4.5% after a solid quarterly trading statement, guiding to flat earnings per share this year and remaining bullish on EPS growth coming through in 2027, of “at least 6%”.
Analysts at Panmure Gordon say they welcome the reiteration of guidance, “however with refinance drag becoming increasingly entrenched for the sector we remain in ‘prove it’ mode and we expect the market to remain so as well.”
Oxford Metrics (AIM:OMG) buzzed up 12% after the smart sensing and software specialist said it had returned to year-on-year revenue growth and expected profits to meet market forecasts.
The company supplies motion capture and measurement systems to the life sciences, entertainment, and manufacturing sectors.
8.39am: FTSE flat, but bigger moves in Europe
The FTSE is back to flat.
While in France, the CAC 40 has jumped over 2% thanks to the 12% leap for LVMH, which has lifted rivals Bouyges, Hermes and Kering in Paris, as well as Burberry and Watches of Switzerland in London.
Elsewhere in Europe, ASML, the Dutch maker of machinery that is used to produce semiconductor chips, is up over 3% after reporting orders for Q3 that were stronger than expected and also predicted growth for 2026.
LVMH’s results “suggests that the slump in the demand for luxury is starting to level off”, says Kathleen Brooks, research director at XTB.
“There was also growth in sales to China, which had been hit by a slump in recent years. Analysts now expect the leather goods sector, especially Luis Vuitton and Christian Dior, could fuel growth for this sector into next year.”
US stocks are expected to open higher today, as “risk sentiment picks up once again”, says Brooks.
“Although there have been some sharp dips in stocks and risky assets in recent days, the dip-buying has been impressive. Investors don’t want to give up on this stock market rally, especially since we are in the middle of what is expected to be a strong earnings season.”
She suggests it is the US Federal Reserve and better-than-expected earnings reports that is driving sentiment this morning, with the dollar weakening after Fed chief Jerome Powell said that concerns about a weakening labour market justifies interest rate cuts.
“A rate cut later this month is now fully expected. This could mean that the downside for stocks is limited,” Brooks says.
She also points ASML results are good for “the AI trade” as it “suggests that the big capex spend in AI, especially by the hyperscalers including Google and Microsoft, are fueling demand for chips”.
8.15am: FTSE inches higher at open
The FTSE 100 has started positively but seen initial gains curtailed, up eight points at 9,461.
Burberry Group PLC (LSE:BRBY) is flourishing at the top of the early risers, up over 5% thanks to read-across from continental colossus LVMH, where 3Q sales were better than expected.
Entain PLC (LSE:ENT) is at the other end of the scale, down 3.1% after reporting slower sales growth for Q3.
Among the mid-caps, Pets at Home Group PLC (LSE:PETS) shares are up 4.3% on the back of the CMS’s new transparency recommendations (see below). On AIM, CVS Group (AIM:CVSG) is also up just over 4%.
7.56am: Vets to face price caps and new transparency rules
Vet chain CVS Group (AIM:CVSG) and retailer-and-vet Pets at Home Group PLC (LSE:PETS) will be in focus after the Competition and Markets Authority proposed a package of 21 measures aimed at overhauling the market to improve transparency, consumer choice and reduce costs.
The provisional findings of its investigation identified concerns that pet owners often lack information about prices, treatments, and whether their local practice is part of a larger corporate group, also finding that consumers are paying significantly more for medicines and services than necessary.
Proposals include requiring vet businesses to publish comprehensive price lists, be clear if they are part of a large group, and make sure that their policies and processes allow vets to act in the best interests of pets and pet owners
It proposed capped fees for written prescriptions at £16, automatic written prescriptions for frequently used medicines, and itemised quotes for treatments over £500.
7.44am: Royal Mail fined for late deliveries
My parents will be pleased with this one: Royal Mail has been fined £21 million by regulator Ofcom after almost a quarter of first-class post arrived late, with targets for all post missed.
“Millions of important letters are arriving late, and people aren’t getting what they pay for when they buy a stamp,” said Ian Strawhorne, director of enforcement at the watchdog.
Royal Mail delivered only 77% of 1st class post on time compared to a target of 93%, while for 92.5% of 2nd class post arrived on time, compared to its 98.5% target.
The company, which was taken over by Czech billionaire Daniel Kretinsky’s EP Group in April, was also fined in 2023 and 2024.
7.31am: Entain growth slowed by adverse sports results
Ladbrokes and Sportingbet owner Entain PLC (LSE:ENT) has kept its full-year outlook unchanged after growth slowed in the third quarter.
This comes a day after its 50%-owned US joint venture, BetMGM upgraded guidance, and three months after the FTSE 100 group upped its own targets for 2025.
Total group net gaming revenue (NGR), including BetMGM, was up 6%, or 7% at constant currencies, slowing from the 10% constant currency growth in the first half of the year. Roughly 1-2 percentage points’ impact came from customer-friendly sports results in September.
For the full year it still expects approximately 7% online NGR growth on a constant currency basis, or growth in mid-single-digit percentage on a reported basis.
7.16am: FTSE tipped for good start, trade tensions in focus
The FTSE 100 has been tipped to forge higher on Wednesday after fighting its way to a positive position by the close yesterday.
Futures are pointing to a 37-point gain for London’s blue-chip index, adding to the 9.9 points accumulated yesterday that saw it finish at 9,452.77.
Overnight, there was a mixed finish for Wall Street stocks, which experienced a rollercoaster session that encapsulated recent market movements.
The Dow Jones close up 0.4%, while the S&P 500 ended down 0.2% after battling back from a negative start into positive territory in the middle of the session, with a similar story for the Nasdaq as it closed 0.8% lower.
“The rally back was caused by dovish comments from Fed Chair Powell after Europe went home, but a late social media post from President Trump reignited some fears of US-China escalations,” says macro strategist Jim Reid at Deutsche Bank.
Financials were among the outperformers after banks kicked off third-quarter reporting season, joined by defensives like consumer staples.
In his post, President Trump said that he believed China was “purposefully not buying” US soybeans and that the White House is now “considering terminating business with China having to do with cooking oil, and other elements of trade, as retribution”.
Reid says those comments “revived Friday’s fears about a fresh escalation in the trade war, and it contrasted with some more emollient remarks from US Trade Representative Greer earlier in the day, who’d expressed confidence that tensions would ease in the coming weeks through ongoing trade talks.
“So risk assets have whipsawed over the last few sessions in response to the various headlines.”
