Yahoo Finance FTSE 100 Live: UK house prices rise in October, Asos £300 million loss
That's all for now
Wednesday 1 November 2023 17:06 , Simon Hunt
That concludes our liveblog coverage for today. Tune in again from 7am tomorrow for our markets coverage as well as the Bank of England's key interest rate decision later in the day.
CVC delays European IPO: FT
Wednesday 1 November 2023 16:54 , Simon Hunt
Private equity giant CVC has postponed its plans for a European IPO, the FT reports.
The firm, which has over £100 billion in assets under management, had been tipped to go public as soon as this month.
But market turbulence has prompted the firm to pause plans until at least next year.
Delivery Hero ups stake in Deliveroo
Wednesday 1 November 2023 16:44 , Simon Hunt
German fast food ordering app Delivery Hero has upped its stake in Deliveroo.
The firm has increased its stake from 5.1% to 6.7%, filings just released show.
Delivery Hero is also in talks to sell some of its Asian business, it has been reported, as the company seeks to shift its focus to its core European market.
FTSE closes up ahead of Fed decision
Wednesday 1 November 2023 16:35 , Simon Hunt
At the end of the day's trading session in London, the FTSE 100 has closed up 21 points to 7,342.
Victoria Scholar, Head of Investment, interactive investor, said:, “European equities have attempted to kick off November on a more positive note after a dismal performance in October.
"Defence stocks outperformed across the month on the back of the Israel-Hamas war while banks took a hit amid the slew of earnings. Next has jumped to the top of the FTSE 100 thanks to another profit upgrade, with shares in M&S rallying in support.
"Focus turns to the Federal Reserve’s rate decision at the conclusion of its two-day policy meeting today when the central bank is expected to carry out a hawkish pause, keeping rates on hold but keeping the door open for another hike."
Bank expected to keep rates unchanged amid recession fears
Wednesday 1 November 2023 15:54 , Simon Hunt
Eyes will be turned towards the Bank of England’s forecasts for the UK economy on Thursday as decision-makers are expected to leave interest rates unchanged at 5.25%.
With the economy weak according to several closely watched metrics, economists have been talking increasingly about the risk that the country could be headed for a recession.
Last time the Bank’s Monetary Policy Committee (MPC) met, in September, it said that it downgraded its outlook for the third quarter of 2023, predicting that gross domestic product (GDP) would only rise by 0.1%, compared with the 0.4% increase it had forecast just a month earlier.
It said that intelligence from its agents “suggested that activity had remained subdued and that there were growing concerns about the economic outlook”.
Now Bank watchers will be keen to find out whether the economists on Threadneedle Street think that the UK might be heading for a recession.
Although any such forecast would come with a warning that the Bank has been wrong in the past.
The London house hotspots where 70% of homes are owned outright
Wednesday 1 November 2023 15:29 , Simon English
Kensington and Chelsea have the highest rate of outright homeownership across London, where 71% of homeowners are on the ladder without the help of amortgage, with the City of London, Westminster, Camden and Barnet also ranking as some of the capital’s housing equity hotspots.
That’s according to research by London lettings and estate agent, Benham and Reeves, who analysed data from the Office for National Statistics looking atthe balance between homes owned outright and those owned with a mortgage.
There are 15.8m homes either owned outright or with the help of a mortgage in England -- 9.3m of these are owned outright, meaning that 59% of homeowners own 100% of equity within their home.
Regionally, London is home to the lowest proportion of outright ownership at 55%.
The research by Benham and Reeves shows that 71% of homeowners own their home outright across the London Borough of Kensington and Chelsea with just NorthNorfolk home to a higher proportion at 72% across England.
Other London boroughs boasting a higher proportion of outright homeownership include the City of London (67.3%), Westminster (66.5%) and Camden (62.8%) where more than 60% of homeowners own 100% of their home’s equity.
Outside of the prime London market, Barnet (59.3%), Havering (59%). Harrow (58.6%), Brent (58.3%), Bromley (58%) and Richmond (58.8%) also sit within London’s top 10 housing equity hotspots.
London also accounts for some of the strongest growth in the number of outright owned homes in England.
LLoyds considering sale of Scottish Widows annuities
Wednesday 1 November 2023 15:02 , Simon Hunt
LLoyds Banking Group is exploring a sale of £6 billion portfolio of bulk annuities from Scottish Widows, according to Bloomberg.
The bank has hired Morgan Stanley and Fenchurch Advisory Partners to consider the move, amid a pivot in strategy by boss Charlie Nunn to focus on workplace and individual pensions.
Founded in 1815, Scottish Widows was acquired by Lloyds in 2000.
City comment: Bargain hunters put a floor under house prices
Wednesday 1 November 2023 14:18 , Simon Hunt
It is hard to reconcile the somnolent levels of activity in the housing market with today’s surprise uptick in house prices in October.
According to Nationwide the average price across the UK was 0.9% higher in October than in September when mortgage approvals for purchases were 30% below the monthly average.
Of course demand for home loans only tells half the story, particularly in London where cash buyers and foreign investors will always put a floor under prices when they sniff a bargain. Close to full employment means there are few forced sellers.
Many homeowners with an inflated idea of what their property is worth are still prepared to sit it out and wait for the incoming tide to lift prices once again.
The Nationwide figure could be a rogue blip, it is after all just a single month’s data. But if the trend is confirmed by other house price indices over the coming months, it is going to lead to rapid reworking of some of the more alarming forecasts of house price slumps this year. The UK market is now down only 3.3% on a year ago in cash terms, though much more when inflation and earnings growth are taken into account.
It must be hugely frustrating for young buyers hoping for a Nineties-style crash to bring the bottom rung of the ladder down to within reach.
That does now not look likely, at least not in this cycle. It will be a long time — perhaps another year — before the Bank of England starts to cut the cost of money but market mortgage rates are still slowly subsiding.
Perhaps more importantly the market appears to be stable. That will encourage more nervous buyers to emerge from their fox holes where they have been sheltering since the mini-Budget, a trend likely to be accelerated by tomorrow’s near-certain decision to hold rates once again.
Stocks open higher in US
Wednesday 1 November 2023 13:50 , Simon Hunt
Stocks made gains in the opening minutes of trade on Wall Street ahead of an interest rates decision by the Federal Reserve later today.
The S&P rose 0.2% while the Nasdaq rose 0.3%.
Here's a look at your key markets data.
Have oil stocks reached the peak
Wednesday 1 November 2023 12:13 , Simon Hunt
The explosion in profits for energy companies over 2022 was one of the key headlines in the equities space. Have these stocks now reached the peak?
TickMill Group’s Market Analyst James Harte writes: "The exorbitant rise in oil and gas prices over the first half of the year was largely responsible for these ballooning profits. With oil and gas having rallied around 70% and 165% respectively over H1 2022, Exxon and Chevron were well positioned to benefit having both shunned the move towards greener energy being championed by their European rivals Shell and BP.
"However, with energy prices having collapsed in recent months and shares in both Exxon and Chevron having stalled, the big question now is whether the top is in for these two stocks or if this is simply a pause before they take another leg higher. A look at both companies recently reported Q4 earnings might help shed some light on this.
"Despite recording record profits for the year as whole, both Exxon and Chevron saw revenues fall short of forecasts in Q4. Along with undershooting forecast, both companies reported revenues were down sharply on the prior quarter, continuing the trend of declining quarterly profits from their peak in Q2 2022. In light of the ongoing declines seen in energy prices, it seems reasonable to expect that Q1 2023 results will be weaker still."
BP shares remain under pressure, Halfords in Bridgestone deal
Wednesday 1 November 2023 10:05 , Graeme Evans
BP shares have fallen another 2% or 11p to 491.6p after JPMorgan downgraded its stance on the oil giant to “underweight”.
The latest selling comes after yesterday's weaker-than-expected third quarter results caused BP's valuation to fall by almost 5%.
The FTSE 100 heavyweight has now reversed 12% from a peak of 550p a fortnight ago, although it remains 8% higher than in the summer.
Shell, which is due to post third quarter figures tomorrow, also took a further step away from October’s record high with a decline of 9.4p to 2637.1p.
The energy sector performance limited the progress of the FTSE 100 index, which edged 11.76 points higher at 7333.48 ahead of monetary policy decisions in the US and UK.
Other big fallers included retail warehouse business Segro, which declined 23p to 689.8p on a “sell” recommendation by Goldman Sachs.
The FTSE 250 weakened 18.53 points to 17,064.52, with National Express owner Mobico down 2p to 60.5p as Berenberg cut its price target to 100p.
Shares in Halfords rose 1.4p to 202p after it signed up Bridgestone as a long-term customer for its Avayler in-garage and van software products.
The tyre manufacturer is also spending $3 million (2.5 million) on a 5% stake in Avayler, implying a $60 million (£49.4 million) valuation for a business launched in 2021.
Broker Peel Hunt called the tie-up a major coup, reinforcing its view that shares are currently too cheap.
Next on the up again
Wednesday 1 November 2023 09:24 , Simon English
NEXT cemented its position as the prince of the high street today with yet another upgrade to its profit forecasts – the fourth in six months.
A cool Autumn helped boost sales, which are up 4% in the year to October 28. Online sales jumped 6.5% and full-price sales, as opposed to those on discount, also rose 3.8%.
That is seen as partly a gauge of consumer confidence, but also of the retailer’s skill at providing shoppers with what they want.
Next now expects full year profits to hit £885 million, up £10 million on the last guidance.
The shares rose 232p to 7122p. They are up 43% in the last year.
City analysts think the figures bode well for the retail sector in general in the run up to Christmas, though rising unemployment could hurt all consumer facing groups.
Shore Capital said: “The positive numbers from the trading statement offer some insights into the wider UK retail sector. Online sales remain a strong growth driver, while the physical channel shows some softness. The focus on full price sales, as opposed to sales during clearance events, suggests a potential shift in consumer spending habits towards quality overquantity.”
Liberum Capital noted the group’s “strong cash generation, management foresight, tech capabilities and new more efficient distribution centre capacity allows it to explore multiplenew avenues for growth”.
Sales in September – the joint hottest on record -- were less strong
Next said: “We believe the volatility in sales performance is a result of changing weather conditions rather than any underlying changes in the consumer economy.
“In an autumn season cooler weather is good for sales, warmer than average weatherdepresses sales.”
Next has around 500 stores. Its financial strength means it is seen as a possible buyer of rival, struggling retailers. It has already bought Reiss, Cath Kidston and Joules.
Mike Ashley’s Frasers Group is also highly acquisitive, taking stakes in Asos and Boohoo among others.
FTSE 100 opens higher
Wednesday 1 November 2023 08:26 , Simon Hunt
Here's a look at your key market data:
Next rallies in FTSE 100, Segro and Aston Martin struggle
Wednesday 1 November 2023 08:23 , Graeme Evans
Next shares have risen 3% and GSK is trading 1% higher after the pair upgraded full-year profits guidance in updates today.
The fashion retailer, which lifted its forecast by another £10 million to £885 million, rose 194p to 7078p.
The reception for GSK was more measured, with shares up 15.7p to 1473.1p after the drugs giant reported strong vaccine sales in the third quarter.
The wider FTSE 100 index rose by 0.4% or 30.09 points to 7351.81, despite further weakness in the oil sector after yesterday’s disappointing BP update.
The energy giant fell another 4.8p to 498p as analysts at JPMorgan cut their stance to “underweight” and reduced their target price to 550p.
Retail warehouse business Segro was the biggest faller in the top flight, falling 3% or 23p to 689.8p after Goldman Sachs switched to a “sell” recommendation.
The FTSE 250 rose 16.02 points to 17,099.07, led by Dr Martens after a rise of 4% or 4.6p to 121p. Aston Martin Lagonda fell 6% or 15.2p to 203.6p after its third quarter update.
Asos warns of lower sales ahead in turnaround plan update
Wednesday 1 November 2023 07:47 , Joanna Bourke
Online fashion giant Asos has warned of sales declines of up to 15% this financial year before it returns to growth levels in 2025, as a turnaround plan to shift older stock progresses.
The retailer, which is aimed at 20-somethings, gave the update as it published figures for the year ending September 3.
Read more HERE
House prices rise unexpectedly
Wednesday 1 November 2023 07:35 , Simon Hunt
House prices recorded a surprise 0.9% increase last month despite the doldrums in the property market, according to latest figures from Nationwide.The average cost of a home in the UK went up from £257,808 to £259,423 during the month, said the building society. That reduced the annual rate of fall from 5.3% to 3.3%.
The figures come the day before the Bank of England is expected to leave interest rates unchanged at 5.25%. Agents say sales activity is depressed but prices have held up more robustly than expected.
Robert Gardner, Nationwide’s Chief Economist, said: “October saw a 0.9% rise in UK house prices, after taking account of seasonal effects. This resulted in an improvement in the annual rate of house price growth to -3.3%, from -5.3% in September."
GSK ups guidance as sales beat expectations
Wednesday 1 November 2023 07:23 , Simon Hunt
Pharma giant GSK has upped its guidance after third quarter sales beat market expectations.
Turnover is set to increase 12 to 13% from 8 to 10% while adjusted operating profit growth was set at 13 to 15% from 11 to 13%.
Third quarter sales rose 10% to £8.1 billion, led by a 30% growth in vaccine sales to £3.2 billion.
CEO Emma Walmsley said: "Competitive performance was broadly based but benefitted particularly from the outstanding US launch of Arexvy, the world's first RSV vaccine.
"GSK's longer-term outlook also continues to strengthen, with progress in our vaccines pipeline, the development of our ultra long-acting HIV portfolio and significant new prospects in respiratory."
Markets steady after big October losses, Fed decision awaited
Wednesday 1 November 2023 07:17 , Graeme Evans
The FTSE 100 index is poised for a steady session after Wall Street shares rallied on the eve of tonight’s Federal Reserve policy announcement.
The US central bank is expected to keep interest rates on hold, with the focus on guidance from chair Jerome Powell over the 2024 outlook.
Ahead of the decision, the S&P 500 index rose 0.6% at last night’s closing bell but the improvement failed to mask a disappointing October overall.
US markets finished lower for the third month in a row, with the S&P 500 down by more than 2% amid concerns about future earnings growth and a possible economic slowdown at a time when rates are expected to remain higher for longer.
It was a similar story in Europe as the FTSE 100 index retreated 3.7% to post its weakest monthly close since October last year. The top flight finished yesterday 5.67 points lower and is forecast by CMC Markets to open today’s session 11 points higher at 7332.
Brent Crude futures stand at $85.56 a barrel, with gold trading at $1980 an ounce.
Recap: Yesterday's top stories
Tuesday 31 October 2023 22:31 , Simon Hunt
Good morning. Here's a summary of our top headlines from yesterday:
BP misses forecasts with $3.3 billion third quarter profit
Trading firm IG slashes 300 jobs in warning sign for the City
Issa brothers complete EG Group UK sale to Asda at a discount amid $500 million debt refinancing
Two thirds of young Londoners support building on green belt to unlock affordable housing
And...why now might be the right time for the Bank of England to cut interest rates
