Yahoo Finance FTSE 100 Live 09 July: BP shares weigh on index, Page warns amid slower jobs market
BP shares are struggling after the oil major warned of big provisions in second quarter results.
In other trading updates, Vistry backed its partnerships model following a strong first half.
And weaker profit guidance by PageGroup has led to heavy selling of recruitment sector shares.
FTSE 100 Live Tuesday
Weak BP guidance hits shares
Recruiter Page Group slashes jobs
Vistry backs home building target
FTSE 100 closes lower as BP shares lose energy and Burberry falls out of fashion with investors
16:43 , Michael Hunter
Eye-catching falls for two big name stocks stood out in closing trade, as the FTSE 100 fell back on Tuesday.
BP was down 19p, or just over 4%, at 455p after it warned of a $2 billion hit to profits and weaker refining margins.
Fashion house Burberry was also out of vogue with investors, on talk of looming job cuts and reports of a cost-cutting drive at the high-end fashion house.
Overall, the main London stock index fell 58 points to 8135.41 in late trade. That was a drop of 0.7%.
Tech stocks help New York stocks rise as Fed watch continues for traders
14:56 , Michael Hunter
Wall Street’s S&P 500 is higher in early trade, with investors buying back into the tech sector, the main driver of the markets recent record-breaking peaks.
The gains come as investors stay tuned into potential signals on the timing of interest rate cuts from the Federal Reserve, with the US central bank’s chairman, Jerome Powell, due to testify on monetary policy to lawmakers on Capitol Hill.
New York’s broad index rose by 13 points to 5638.75.
Wall Street markets set for positive start as techs rise and Fed steps into the spotlight
14:06 , Michael Hunter
New York’s S&P 500 is expected to tick higher in opening trade,
Futures trade is pointing to an opening gain of around 6 points. Traders were tuning in for two days of testimony from the Federal Reserve’s chairman, Jerome Powell. His appearance on Capitol Hill will be scrutinised for clues on when interest rates will be cut by the world’s most powerful central bank.
In the meantime, tech stocks were back on the up having driven the Wall Street stock markets to its recent record highs. Invidia and Intel, chipmakers well-placed for to benefit from the artificial intelligence revolution, were up by about 2% each, on course for the second day of gains.
Mulberry chief out -- now
12:26 , Simon English
The chief executive of Mulberry paid the price for the slowdown in the sales of luxury goods, heading for the exit with immediate effect.
Thierry Andretta, the boss since 2015, is being replaced by Andrea Baldo who was most recently in charge of Ganni.
Andretta, paid at least £1 million a year, can expect compensation for the nature of his departure.
A brusque statement to the stock market gave no reason for the sudden switch, merely noting that Andretta was stepping down from the board and leaving the company immediately.
Baldo does not start his new job until September 1.
Last May, Mulberry reported a 4% fall in annual sales. His message then was downbeat, telling shareholders:
“Mulberry has not been immune to the broader downturn in luxury spending experienced in recent months, particularly in the UK and Asia. This decline was partially offset by positive trading in the US, where we have benefited from increased brand awareness.
“Looking ahead, the trading environment in the UK and China remains challenging and we do not expect this to change in the short-term.”
While fans of the brand include the Princess of Wales and Cara Delevigne, that has not been enough.
Luxury bosses say they in particular suffer from high VAT – a “tourist tax” that makes it cheaper t buy high end goods in Paris or elsewhere.
Chris Roberts, chairman, said: "I am pleased to be able to announce the appointment of Andrea Baldo. Following our search process, it was clear that Andrea's international fashion brand expertise, creativity and strategic thinking meant he was absolutely the right person for this role. I'd also like to thank Thierry for his contribution to the business."
Andrea Baldo said: "I am thrilled to join Mulberry at such a pivotal moment and to build upon the strong sustainability credentials of this iconic luxury brand. I look forward to leading the business and its talented team into the next chapter."
Mulberry shares fell 6% to 96p which leaves the business valued at just £58 million. The stock is down 65% in the last five years.
BP down 3% in FTSE 100, upgrade boosts B&Q owner Kingfisher
10:24 , Graeme Evans
BP shares are down 3.5% or 16.6p to 458p after an update by the oil giant caused City analysts to rip up forecasts for results later this month.
The second quarter guidance included flat oil and gas production on the previous quarter, alongside negative revisions to refining margins.
BP added that results on 30 July will include one-off items of up to $2 billion, including from an ongoing review of its Gelsenkirchen refinery in Germany.
Shell shares rose half a penny to 2835.5p, but falls by BP and other heavyweights including HSBC limited the FTSE 100 index to a rise of 14.97 points at 8208.46.
One of the best FTSE 100 performances was by B&Q owner Kingfisher, despite the British Retail Consortium (BRC) reporting poor sales of DIY and gardening equipment amid June’s poor weather.
Kingfisher rallied 9.9p to 475.5p after Deutsche Bank switched to a Buy stance.
Other stocks from the sector struggled on the back of the BRC update as Next fell 86p to 8924p and Marks & Spencer weakened 4.6p to 292.5p.
In the FTSE All-Share, Capita shares jumped by a fifth or 3.2p to 18.7p after selling its public sector software business in a £200 million deal with Orchard Information Systems.
Affordable homes specialist Vistry backs Labour's building ambition but shares slip
10:10 , Michael Hunter
Vistry, the developer specialising in affordable housing, said it would complete 18,000 homes this year and hailed the commitment in Downing Street to get Britain building.
The chief executive of the Kent-based firm, Greg Fitzgerald, said:
"We look forward to working with the new government to address the country's housing crisis and are extremely well placed to support its ambition of delivering the biggest boost to affordable housing in a generation."
Vistry, which is known for its commitment to mixed-tenure and social housing, backed Labour’s move to resurrect what is in effect a quota system for local authorities to address the UK’s shortage of properties.
The company said it was “supportive” of “plans to introduce mandatory housing targets, reform the national planning policy framework, add new planning officers and prioritise brownfield and 'grey belt' land.”
Labour has said it wants to build 1.5 million homes in its current five-year term.
Vistry said today it finished 7,750 homes in the first half of 2024, over 600 more year-on-year. It said 75% of them were “partner funded”, from social housing providers including local authorities and housing associations.
Its shares slipped 22p to 1269p, taking it off recently touched two-month highs.
Recruiter Page Group slashes jobs
09:01 , Simon English
PAGE Group shares crashed 10% today as it warned over earnings and said it has has to cut more of its own staff.
The recruiter says the global jobs market has weakened, with the US, France, China and the UK all suffering.
Profit for the second quarter was down 12% to £224 million.
Its own headcount is down by 153 to 5598, with the European arm taking the worst hit.
Its non-operations workforce fell by 2.4%, or 49, in the quarter.
PageGroup shed more than 1,000 fee earner roles in 2023 but said it would look to “broadly hold” numbers at current levels “to ensure we are well placed to take advantage of opportunities as sentiment and confidence improve”.
The shares fell 43p to 379p.
CEO Nicholas Kirk said: "We continued to see challenging market conditions throughout the Group in Q2 and we experienced a softening in activity levels through the quarter, particularly in terms of new jobs registered and number of interviews. The conversion of interviews to accepted offers is the most significant area of challenge, as candidate and client confidence remains subdued.”
Begbies on the up as insolvencies rise
08:51 , Simon English
Insolvency specialist Begbies Traynor is on the up and expects to keep doing well from changes in government policy.
While the insolvency arm, 60% of the business, is strong as small firms continue to struggle with higher interest rates, it is the property arm that excites him most.
Chairman Ric Traynor said: “We have a new government bent on growth and construction that is looking pretty good for us.”
He was talking as the firm reported a tenth year of growth and a seventh year of dividend growth.
Profit before tax for the year to April was up from £20.7 million to £22 million. A dividend of 4p, up from 3.8p, will be paid.
Revenue rose from £122 million to £137 million.
Traynor expects a “pronounced” level of insolvencies for the next year or two as small firms that have battled on so far finally fail.
He thinks that within two years the level of company insolvencies should steady at around 20,000 a year. That’s more than when interest rates were near zero, but about typical for an economy in growth.
“With small businesses it doesn’t take much to knock them over. They have taken bounce back loans which they now can’t repay. More sizeable businesses have weathered the storm and have a better relationship with their banks.”
He added: “From the point of view of the economy, the government is talking sensibly and we should get some stability.”
Begbies has 1200 staff across the UK. Aside from insolvency work they advise commercial lenders on property valuations. They say there is an increasing amount of work in the education sector as they work to ensure buildings are safe.
Begbies Traynor shares fell 2.3p to 97.1p today, leaving the business valued at £154 million. It did four acquisitions this year of rival firms to boost its presence.
Begbies, along with many other firms, hopes the new Labour government’s focus on infrastructure spending should bring plenty of opportunities.
BP shares drag on FTSE 100, PageGroup down 12% in FTSE 250
08:19 , Graeme Evans
BP shares are down 3% or 15.8p to 458.85p after the oil giant warned of second quarter asset impairments and contract provisions between $1 billion and $2 billion.
The share price decline put pressure on the FTSE 100 index, which stands broadly unchanged at 8194.79.
Vistry shares rose 10p to 1302p after the affordable house builder stuck to completion targets and said this year’s adjusted profits should rise by about 7% to £186 million.
In the FTSE 250, PageGroup shares slid 12% or 50.6p to 372p after the recruitment firm downgraded full-year profit expectations. Rival Hays also weakened 4%.
Oil services firm Hunting moved the other way, up 16p to 445p after it said a strong order book supported earnings visibility well into 2025.
Capita sells is public sector software unit in £200 million deal
07:36 , Michael Hunter
Outsourcing firm Capital has announced the sale of its public sector software business in a £200 million deal with Orchard Information Systems.
Capita said the move “follows an evaluation of certain activities” which it decided were “not core to the Group's future strategy”.
Orchard is part of MRI Software.
Capita, best known in London for running the Congestion Charge.
Its CEO, Adolfo Hernandez, said this morning:
“Capita's strategy is to become a more focused company, prioritising businesses where we can deliver material opportunities in the future, with greater simplification and cost reduction.
"Capita One is a high-quality business that has performed exceptionally well. Under its new owner, it is well positioned to benefit from investment in its strategic growth.”
Vistry confident on 18,000 new homes target
07:30 , Graeme Evans
Partnerships-led housebuilder Vistry today said it was on track to meet a target to deliver more than 18,000 new homes in 2024.
The Bovis Homes business reported an 8% rise in half-year completions to about 7750, with forward sales up 21% on the prior year at £5.1 billion.
The FTSE 100-listed group is focused on meeting the UK’s need for affordable mixed tenure housing.
Chief executive Greg Fitzgerald said the half-year update showed the company’s partnership model is “significantly outperforming the broader housebuilding market”.
He added:: “We look forward to working with the new Government to address the country’s housing crisis and are extremely well placed to support its ambition of delivering the biggest boost to affordable housing in a generation.”
BP says second quarter production to be 'flat'
07:27 , Michael Hunter
BP has said this morning that second-quarter upstream oil production will be “flat”, while it will be “slightly lower” in “gas and low carbon”
The oil giant’s output rose 2.1% year-on-year in the first quarter.
Energy majors have been in the spotlight for returning to traditional production and slowing moves toward sustainable energy after the disruption in markets which followed Russia invasion of Ukraine.
BP said today:
“ In the gas & low carbon energy segment, realizations, compared to the prior quarter, are expected to have an adverse impact of around $0.1 billion.”
Index seen higher, Japan stocks hit fresh record
07:08 , Graeme Evans
A surge for technology stocks including SoftBank today helped the Nikkei 225 jump by more than 2% to set a new record at 41,769.
The boost followed a decent session for Wall Street’s megacap stocks, with chip giant Nvidia up 2% and the Nasdaq Composite in positive territory.
Traders will now be looking to Federal Reserve chair Jerome Powell's testimony to Congress for further clues about the timing of future interest rate cuts.
European markets struggled yesterday following France’s election result, with the CAC 40 closing 0.6% lower at the end of an uncertain session.
The FTSE 100 index closed 0.1% lower yesterday but is forecast to open today’s session about 18 points higher.
