Yahoo Finance FTSE 100 Live 6 June: Index closes up 0.5% as ECB cuts interest rates
Interest rate cut hopes have boosted the market mood after the European Central Bank and the Bank of Canada became the first two in the G7 to loosen monetary policy.
Attention is on when policymakers in the UK and US might follow suit.
Today’s corporate updates have included record results by facilities manager Mitie and a return to profit for the Jacamo business N Brown.
FTSE 100 Live Thursday
Markets boosted by rates outlook
Mitie sets revenues record
Jacamo owner returns to profit
FTSE 100 closes up 0.5%
Thursday 6 June 2024 16:42 , Daniel O'Boyle
The FTSE 100 closed at 8,285.34 today,, up 0.5%, after this afternoon’s ECB decision.
The rate cut was highly expected, and so didn’t move markets much. London’s top flight was already up 0.4% before the decision.
The top risers were Antofagasta and Fresnillo. The top fallers were Vodafone and National Grid.
Construction sector grows at fastest rate for two years
Thursday 6 June 2024 15:20 , Daniel O'Boyle
The UK construction sector’s recovery gathered pace in May as it grew at the fastest rate for two years, according to new data.
Building firms said momentum improved on the back of rising workloads, which drove them to take on more staff and buy more materials.
The latest S&P Global construction purchasing managers’ index (PMI) scored 54.7 in May, jumping from 53.0 in April.
'Bank of England should rise to the guns'
Thursday 6 June 2024 14:36 , Daniel O'Boyle
Neil Shah, Executive Director at Edison Group says: “Today’s rates cut by the ECB is a bold move, coming after a slight rise in Eurozone inflation to 2.6% last month. However, the direction of travel is clearly downwards, and the ECB has decided to take the plunge: hoping that a jolt in demand will accelerate the economic recovery. That makes two major economies which have now stuck their heads above the parapet on rates – Canada having cut interest rates by 25bp yesterday.
“It is a shame, then, that this decision has come during a British general election, which means that the Bank of England is unlikely to follow their lead anytime soon. Inflation has now fallen to 2.3% in the UK, but this is not yet translating into greater consumer confidence. The perfect time, then, for the Bank to cut rates and stimulate demand and investment. Leadenhall Street should not wait for the Fed to act; as soon as it can, it should instead ride to the sound of the guns.”
ECB 'not pre-committing' to any path
Thursday 6 June 2024 14:02 , Daniel O'Boyle
Despite the positive news on Euro-area interest rates coming down, markets were a little disappointed by a lack of further guidance on cuts.
“The Governing Council will continue to follow a data-dependent and meeting-by-meeting approach to determining the appropriate level and duration of restriction,” the ECB said in a statement. “The Governing Council is not pre-committing to a particular rate path.”
The FTSE 100 is a little lower than where it was before the cut, at 8,273.03.
';'Path for further cuts still unpredictable'
Thursday 6 June 2024 13:24 , Daniel O'Boyle
Neil Birrell, Chief Investment Officer at Premier Miton Investors and lead manager of the Premier Miton Diversified Fund range, says: "In one of the most flagged central bank interest rate decisions for some time, the ECB followed Canada into the rate cutting cycle.
“However, the path for further cuts is unlikely to be as predictable or smooth. Eurozone inflation is proving more resilient than hoped, as it is in the US and UK, which has to influence the ECB, although they will be keen to keep providing stimulus to the economy, it needs it. As has been the case all the way through the cycle, they have a tight rope to walk."
ECB cuts interest rates
Thursday 6 June 2024 13:15 , Daniel O'Boyle
The European Central Bank has cut its interest rates by 25 basis points, as expected.
It is the first of the three major western central banks to do so.
The ECB said: “The Governing Council today decided to lower the three key ECB interest rates by 25 basis points. Based on an updated assessment of the inflation outlook, the dynamics of underlying inflation and the strength of monetary policy transmission, it is now appropriate to moderate the degree of monetary policy restriction after nine months of holding rates steady. Since the Governing Council meeting in September 2023, inflation has fallen by more than 2.5 percentage points and the inflation outlook has improved markedly. Underlying inflation has also eased, reinforcing the signs that price pressures have weakened, and inflation expectations have declined at all horizons.
“Monetary policy has kept financing conditions restrictive. By dampening demand and keeping inflation expectations well anchored, this has made a major contribution to bringing inflation back down.”
ECB rate call imminent
Thursday 6 June 2024 13:12 , Daniel O'Boyle
The European Central Bank is about to announce its latest interest rates decision, with a cut still seen as all but certain...
Former BT boss secures £3.7m final pay deal despite drop in profits
Thursday 6 June 2024 12:57 , Daniel O'Boyle
BT has revealed it handed former boss Philip Jansen a £3.7 million final pay package despite the telecoms giant revealing lower profits and extending its cost-cutting efforts.
Mr Jansen was replaced by Allison Kirkby as chief executive of BT at the end of January after five years leading the company.
The firm’s latest annual report revealed that the former boss’s total pay deal jumped by 25.8% to £3.72 million for the financial year to March 31.
ECB rate call in one hour - cut all but certain
Thursday 6 June 2024 12:14 , Daniel O'Boyle
City markets are pricing in a 97% chance that the European Central Bank cuts interest rates at today’s meeting.
But the Eurozone might have to wait some time for the second cut of the cycle, which isn’t fully priced in until October.
Summer of interest rate cuts heats up as major central banks start taking action
Thursday 6 June 2024 12:07 , Daniel O'Boyle
The City was readying for a summer of falling interest rates today, after the first cut from a major central bank added to the pressure on the Bank of England to join in.
Canada became the first G7 nation to reduce benchmark borrowing costs. The milestone move for the club of rich-world nations came overnight. Switzerland took similar action last month.
Rate-setters at the European Central Bank were gathering this morning , ahead of a widely expected quarter-point cut this afternoon to extend the trend.
Eurozone retail sales decline ahead of ECB call
Thursday 6 June 2024 10:31 , Daniel O'Boyle
Eurozone retail sales declined in April, in a sign of the currency union’s economy slowing ahead of the ECB’s expected interest rate cut.
Sales were down 0.5% month-on-month, and remain about 4% below their November 2021 peak.
ING analyst Bert Colijn said: “The drop in sales indicates that retail sales remain on a stagnant trend for the moment in the eurozone. While most of the economy seems to be gearing up for some modest recovery, retail seems to be lagging behind the trend for now”
The decline is likely to cement expectations of a rate cut later today, which was already seen as close to certain.
London stocks higher on US boost, Wood Group up 10% in FTSE 250
Thursday 6 June 2024 10:06 , Graeme Evans
Wood Group shares have risen 10% or 18.6p to 204.6p after the FTSE 250-listed company last night granted due diligence access to Sidara following a “fourth and final” proposal worth £1.6 billion, or 230p a share.
The Dubai-based engineering firm now has until 3 July to confirm its intentions.
Today’s blue-chip session benefited from a strong Wall Street handover after US rate cut hopes led to this year’s 25th all-time high by the S&P 500 index.
The FTSE 100 index rose 0.3% or 25.95 points to 8272.90, with Rolls-Royce among the frontrunners after a gain of 6.7p to 460p and JD Sports Fashion up 4% or 4.7p to 131p.
Vodafone lost 6% or 4.5p to 72.2p and Sainsbury’s fell 10.4p to 263.6p after both stocks traded without the right to their upcoming dividend awards.
The FTSE 250 rose 0.4% or 83.51 points to 20,756.92.
Jacamo owner returns to profit despite lower revenue
Thursday 6 June 2024 09:59 , Daniel O'Boyle
Shares in Jacamo and JD Williams owner N Brown soared this morning as the fashion group returned to profit despite lower revenue.
Sales continued to decline, losing another 10% to £600.9 million. However, a cost-cutting drive meant the business brought in £5.3 million in profits, after a £71.1 million loss a year earlier.
Boss Steve Johnson said: "Our customers are now seeing tangible benefits from our transformation, with an enhanced experience being delivered by our new websites and our recently launched product information management system ensuring customers have more detailed product descriptions to inform their purchases.”
The shares gained 18.4% to 17.7p, putting them back in positive territory for the year and valuing the business at £78 million. However, that’s still down 97% from the company’s peak in 2014.
FTSE 100 up as Rolls and BAE gain ground, Mitie shares higher
Thursday 6 June 2024 08:29 , Graeme Evans
The FTSE 100 index has risen 8.88 points to 8255.83, a performance supported by gains of around 1% for Rolls-Royce and BAE Systems.
Miner Antofagasta is the best performing stock, up 2% or 43.1p to 2194.1p.
Fallers included Sainsbury’s, which lost 9.8p to 264.2p after its shares were marked ex-dividend. Ocado declined 5.2p to 357p after its relegation from the FTSE 100 was confirmed last night.
In the FTSE 250, Mitie added 3p to 123p after the facilities manager posted record revenues and beat forecasts with full-year earnings of £210 million.
Wood Group topped the risers board after last night’s disclosure that it had granted Sidara access to its books following a takeover proposal worth 230p a share. The engineering consultancy jumped 10% or 19.4p to 205.4p.
Ocado kicked off FTSE 100 while Darktrace secures ‘short-lived’ promotion
Thursday 6 June 2024 08:06 , Daniel O'Boyle
Grocery group Ocado has dropped out of the FTSE 100, while cybersecurity firm Darktrace has secured a short-lived promotion ahead of a major US takeover, in the latest reshuffle in London’s top stock market index.
Darktrace has climbed into the upper echelons of the UK’s stock markets after its share price surged by two thirds over the past six months.
Analytics group FTSE Russell confirmed the changes in the latest quarterly review yesterday, which will come into effect on Monday June 24.
Mitie Group breaks revenue record
Thursday 6 June 2024 08:02 , Michael Hunter
Mitie Group, the facilities management firm which employs 68,000 people, has reported record annual revenue this morning.
The company brought in £4.5 billion in the year to the end of March, up 11%. Operating profit rose to £210.2 million, up from £162.1 million.
Phil Bentley, Group Chief Executive, said:
“Mitie is a cash generative business with a robust balance sheet, and we are committed to investing in accelerated growth, as well as returning surplus funds to shareholders via share buybacks.
FTSE 100 seen higher after US bounce, ECB seen cutting rates
Thursday 6 June 2024 07:17 , Graeme Evans
Nvidia’s £3 trillion valuation and this year’s 25th all-time high by the S&P 500 index have set an upbeat tone ahead of today’s European open.
The FTSE 100 index is forecast to start 17 points higher at 7264, reflecting the S&P 500’s rise of 1.2% after the Bank of Canada cut interest rates.
The European Central Bank is set to follow suit later today with its own quarter point reduction
The momentum on Wall Street was driven by technology stocks as chip firm Nvidia rose 5% to edge ahead of second largest company Apple. The Magnificent Seven index rose 2.2% to set a new record.
On commodity markets, Brent Crude is slightly higher at $78.71 a barrel.
Recap: Yesterday's top headlines
Thursday 6 June 2024 06:48 , Simon Hunt
Good morning from the Standard City desk.
A certain City crowd would try to convince you that there is a serious problem with what this nation pays its chief executives.
Yes – far too little. How can we attract the very best talent from America and elsewhere if they are to live on such pittances as £5 million or £6 million a year? Don’t we realise the hit to the economy from our parsimonious?
The heart does bleed.
But let’s survey some recent evidence. The chaps who built Melrose into an industrial giant are going to share £180 million.
That’s on the back of £4.5 billion in shareholder value created, and half of it goes to the taxman. No one lost here. Be jealous, but don’t be mad.
Other CEOs, Tim Steiner at Ocado as we reported yesterday, also seem to do reasonably well, and in his case the value creation bit is a lot more, erm, open to interpretation.
M&S boss Stuart Machin took home £4.7 million this year, on the back of a decent turn around of the company. His co-chief Katie Bickerstaffe got less – just £4.4 million – call in the Low Pay Commission immediately and file suit about the gender pay gap.
Neither Machin nor Bickerstaffe invented M&S. It is just possible it would still exist, still have enjoyed an improvement in its performance, under someone other than these two.
If they both stay for ten years, then assuming no pay rises, that’s nearly £50 million each. Ordinary CEO folk can muddle through on that.
Bluntly, there isn’t the slightest problem with our CEOs getting too little money, and you have to live in the mother of all bubbles to imagine otherwise.
~
Here’s a summary of our top headlines from yesterday:
Ocado poised to drop out of FTSE 100 in the latest blow to long suffering investors, after a 90% share price slump since the pandemic.
The super-rich got even richer in 2023, new research by Capgemini finds, as the high net worth went risk-on and swapped their cash holdings for private equity and venture capital
Pawnbroker Ramsdens eyes more store openings and ups dividend after profits growth
B&M shares slide as results leave analysts with 'more questions than answers'
WH Smith said it is “well positioned” for the peak summer trading period as demand for travel held up revenue across the business.
The boss of Cadogan, Chelsea’s largest landlord, tells the Standard the family-owned property group’s “enlightened self-interest” is driving both profit and a thriving community in the exclusive neighbourhoods where it holds land.
