Yahoo Finance FTSE 100 LIVE: Hays shares slide after 'difficult December', GSK in $1bn respiratory drug deal
FTSE ends the day flat
16:51 , Simon Hunt
The FTSE 100 has closed flat at the end of the day's trading session in London.
GSK shares rallied after unveiling a $1.4 billion dollar deal to acquire an asthma drug developer, while JD Sports sunk further following its profit warning last week.
Here's a last look at your key market data:
Is Terry Smith losing his touch?
15:14 , Simon English
FundSmith has been one of the most successful fund launches of recent years, attracting money from many thousands of small investors -- including me.
His annual letter to investors today, the 14th, admits that his most commonly held share class was up 12.4% in 2023. That's not too shabby. But it is below the MSCI World Index which Smith takes as his benchmark -- that was up 16.8%.
Smith says, as he would, that a longer term perspective "may be useful". I think he is right. Since inception the fund is up nearly 550%, which is better than the MSCI.
Still, critics may snipe.
Laith Khalaf, head of investment analysis at AJ Bell, says: “Fundsmith didn’t have a great year in 2023 relative to the global stock market, and this was the third calendar year of underperformance witnessed by investors. While returns were behind the global stock market last year, in absolute terms they were still strong, so existing investors won’t be too miffed about the fund’s 2023 performance. Terry Smith has a loyal following and a great deal of credit in the bank due to his long-term track record. The problem is Fundsmith Equity is now underperforming on both a three and five year view, which are key periods fund buyers look at, so it might be harder for the fund to find new converts."
Maybe. Smith says he underperformed this year because Estée Lauder and Diageo among others, disappointed.
He tells investors: "We sold our stake in Estée Lauder whose mishandling of the demand/supply situation in China following reopening post Covid and in the travel retail market revealed serious inadequacies in its supply chain."One of Smith's favourite investment strategies is this: "Do nothing." That is because trading in and out incurs costs that hurt performance. Generally, he picks stocks he likes and holds them for basically ever.
He also has calming words for those of us worried about the rise of AI.
He writes: "The adoption of AI may lead to a situation where everyone has it, so no one has any advantage. The analogy I would offer (with acknowledgement to Warren Buffett) is a football stadium. As the game becomes exciting and the striker runs into the penalty area with the ball, the second row of spectators stands up to get a better view.This blocks the view of those in the third row who follow suit. Pretty soon all the spectators are standing but no one has a better view than before, but they are all less comfortable.So, I think we will suspend judgement of who, if anyone, will emerge as a winner in AI."
Otherwise, it is keep calm and carry on. Smith's touch looks fine to me.
Weak sales growth ends ‘sluggish’ year for retailers
12:44 , Daniel O'Boyle
Retailers suffered a disappointing festive period that failed to make up for a challenging year of sluggish sales growth, figures show.
Weak consumer confidence continued to hold back spending, with total UK retail sales up by just 1.7% in December against growth of 6.9% a year earlier, according to the British Retail Consortium (BRC)-KPMG Retail Sales Monitor.
The post-Christmas sales were unsuccessful in enticing spending in areas such as furniture and homewares, with households remaining cautious about making larger purchases.
Sub-4% two-year fixed mortgage within sight as Barclays and Santander slash rates
11:37 , Daniel O'Boyle
Two-year fixed-rate mortgage interest rates may soon hit 4%, as Barclays and Santander unveiled a swathe of major rate cuts today.
The ‘big six’ lenders joined the ongoing rate war, following a number of others such as Halifax and HSBC in reducing mortgage prices this year.
The cuts from Barclays, coming into effect tomorrow, will be especially eye-catching as they bring the cheapest two-year deals within touching distance of the 4% threshold. The bank cut rates on the lowest-priced of its two-year fixes by half a percentage point to 4.10%, though those deals will require a 40% deposit. Other deals have also been cut by a similar amount.
Gareth Davies, director at South Coast Mortgage Services, said the cuts were the most significant of the year so far.
Fears grow for housebuilders after Stewart Milne Group enters administration
11:10 , Daniel O'Boyle
The head of a housing industry body has said she fears more housebuilders could collapse following Stewart Milne Group entering administration with the loss of more than 200 jobs.
Administrators Teneo were appointed on Monday for the housebuilder, which is headquartered in Aberdeen, halting construction on sites across Scotland, with 217 roles being made redundant.
Jane Wood, chief executive of Homes for Scotland, which represents more than 200 members, said she is “very worried” about more firms going bust.
Scottish Mortgage leads FTSE 100, recruitment sector shares slump
10:33 , Graeme Evans
Wall Street’s AI excitement today fired up a resurgent Scottish Mortgage Investment Trust but failed to spark a stronger session for the FTSE 100 index.
The London-listed tech industry backer rallied 2.5% or 20p to 771.5p following another bounce for semiconductor giant Nvidia, which has been in the Scottish Mortgage portfolio since 2016 and is now the third largest holding at 5.1%.
The 6% jump for Nvidia shares to a fresh record came after it announced three new AI chips for use in personal computing. Other Magnificent Seven tech stocks including Apple and Amazon.com also improved as softer US inflation trends lifted interest rate cut hopes.
The Nasdaq closed more than 2% higher, while leading domestic semiconductor firms helped Japan’s Nikkei 225 to improve 1.2% to near a fresh 33 year high.
Aside from shares in Baillie Gifford’s Scottish Mortgage, which took its recovery since October to about 20%, London’s FTSE 100 index missed out on the rebound.
The top flight fell two points to 7692.16, with the next best performers being Rolls-Royce after a gain of 5.5p to 310.5p and BAE Systems with a rise of 14.5p to 1159.5p.
Weakness among mining stocks put pressure on the FTSE 100 performance, with Rio Tinto down 60p to 5625p. The selling of JD Sports Fashion also continued after last week’s profit warning, while B&Q owner Kingfisher retreated 3.1p to 28p.
The FTSE 250 index fell 54.35 points to 19,339.45, with recruitment firms PageGroup and SThree down by around 4% after rival Hays reported a difficult December.
Games Workshop shares slide despite record profits
09:21 , Daniel O'Boyle
Warhammer maker Games Workshop reported record first-half sales and profits today, but shares slid as it said it would have to hold onto more cash because of higher costs.
Profit rose to £95.2 million, as revenue fell just short of a quarter of a billion pounds.
CEO Kevin Rountree said: “Morale is good at Games Workshop and our hobbyists are having fun too.”
Games Workshop added that December sales are in line with its expectations.
The firm has handed big returns to shareholders over the years, with dividends growing 195p per share in the half-year. But today said higher costs meant it had to increase its “cash buffer” to £75 million, potentially meaning less room for dividends down the line.
The shares lost 410p, or 4.2%, today to 9365p. They skyrocketed between 2009 and 2023, but are now down 20% since late July.
Market snapshot
08:37 , Daniel O'Boyle
Take a look at today's market snapshot with the FTSE 100 slightly higher this morning
Hays shares slide 19% on tough December trading, FTSE 100 higher
08:30 , Graeme Evans
London’s FTSE 100 index is 13.67 points higher at 7707.86, with Rolls-Royce among the best performing stocks after a rise of 2.5p to 307.7p.
GSK also improved 14.8p to 1563.8p following its acquisition of respiratory drug maker Aiolos Bio for $1 billion, while oil company BP added 4p to 460.5p.
On the fallers board, B&M European Value Retail shed 10.8p to 551p despite announcing a 20p a share special dividend alongside figures showing revenues growth of 5% in its Christmas quarter.
The FTSE 250 index fell 43.58 points to 19,350.22, with recruitment firm Hays down 19% or 20.6p to 87.1p after it reported a downturn in trading conditions December. Rival Page Group also shed 8% or 35.4p to 434.2p.
Meanwhile, Jupiter Fund Management slid 11p to 77.5p after it reported higher-than-expected outflows of £2.2 billion in 2023.
Strong Christmas trading helps B&M present special payout to investors
07:44 , Michael Hunter
B&M European Value announced plans for a special payday for shareholders today, powered by a strong showing in the peak Christmas trading season..
The FTSE 100 high street discounter unveiled plan for the 20p per share dividend along with its update for the festive sales season.
It reported group revenue growth of 5% in its third quarter, the 13 weeks from 24 September to 23 December. On a year-to-date basis, revenue was up over 8% to £4.2 billion.
B&M, which runs over 700 stores and employs 35,000 people has around 4 million customers a week. It also said today it was "on track" to open 76 new stores, including 11 in France.
Alex Russo, chief executive, of the £5.6 billion firm, said: "The performance across the Golden Quarter has been pleasing, with strong operational execution.
"Our strategy remains unchanged - we are an everyday low-price discounter with a laser-focus in keeping excellence in retail standards and our costs the lowest. This allows us to provide our products at the best price to all customers - many of whom continue to face significant cost-of-living pressures."
More strife at Jupiter at Whitmore exits
07:36 , Simon English
There was more strife at Jupiter today when it said star manager Ben Whitmore will be leaving.
The fund group has struggled with indifferent performance that has seen clients pull money away.
Today it said it expected to post total net outflows of £2.2 billion pounds 2023, more than previously anticipated.
The British fund firm blamed "a delay" in the funding of some institutional mandates and weaker than anticipated retail sentiment in October and November for the increased outflows, after forecasting "modest net outflows" for the year at the start of 2023.
However, Jupiter expects to report performance fees of more than 10 million pounds for the year ended Dec. 31, higher than previous guidance.
Veteran portfolio manager Ben Whitmore, who manages around £10 billion, would leave the firm in July to launch an independent boutique. Both parties have agreed his new boutique, once established, will not compete with Jupiter for two years from his leaving date.
Alex Savvides is expected to join Jupiter by autumn and will assume management of the£ 2.1 billion Jupiter UK Special Situations Fund.
Whitmore will remain with Jupiter until at least end-July, to complete an "orderly and collaborative transition process" in relation to assets he currently manages, the company said.
Unite Students properties filling even up faster than last year
07:33 , Daniel O'Boyle
Unite students says its properties for 2024/25 are filling up even faster than last year, when it was left with no room by the start of term.
The student landlord’s properties are 71% full, ahead of the 70%% of its rooms that were full this time last year.
Joe Lister, Unite Students Chief Executive Officer, said: “We have seen a strong start to the 2024/25 sales cycle, reflecting the continued appeal of our fixed-priced, all-inclusive offer.
“The letting performance highlights the ongoing strength of demand from students and universities and underpins a positive outlook for rental growth for the 2024/25 academic year.
“We will continue to play a leading role in increasing the supply of much needed student accommodation at a time when HMO landlords are leaving the market at pace and the new supply of purpose-built student accommodation slows. We are committed to working closely with our university partners to ensure students have access to high quality, affordable accommodation.”
The business maintained its previous guidance for adjusted EPS at the upper end of our 43-44p range. The property value of its UK Student Accommodation Fund increased by 2.1% while the value of its London Student Accommodation Joint Venture was down slightly.
GSK to buy respiratory drug maker Aiolos Bio for $1 billion
07:29 , Michael Hunter
FTSE 100 pharmaceutical giant GSK has unveiled plans to buy respiratory drug maker Aiolos Bio for $1 billion.
The deal will bring promising drugs into GSK's pipeline, including treatments for asthma. Depending on the performance of the drugs after the deal, it could pay a further $400 million to the firm.
Aiolos Bio is based in San Francisco and has offices in London.
The deal is subject to regulatory clearance, including in the US.
Slowdown in jobs market hits Hays
07:27 , Simon English
The slowdown in the jobs market has hit recruitment firm Hays, which saw fees dip 10% in the last quarter.
Those figures were worse in the UK and Ireland, down 17%, as employers marked time while waiting for clarity on costs and interest rates.
In response the recruiter is looking to cut costs by £30 million over the year.
CEO Dirk Hahn said: "Overall market conditions became increasingly challenging through the quarter, including a clear slowdown in most markets in December, notably in our Perm businesses as client and candidate decision-making slowed."
Hays expects profits for the full year to be about £60 million.Hahn added: "Given increased uncertainties and reduced client and candidate confidence, our New Year 'return to work' is particularly important, and we are closely monitoring activity levels. It is too early to say if December's weakness reflects a sustained market slowdown or some placement deferrals, however, we expect near-term market conditions to remain challenging."
Wall Street tech rebound lifts market mood, FTSE 100 seen higher
07:24 , Graeme Evans
Nvidia shares led a rebound for Wall Street’s tech sector yesterday as the S&P 500 index closed 1.4% higher and the Nasdaq Composite by 2.2%.
Semiconductor giant Nvidia jumped 6% to a record high after announcing three artificial intelligence chips for use in personal computing, while shares in rivals Advanced Micro Devices and Intel also rose 5% and 3% respectively.
The Wall Street mood was further helped by a fall in US inflation expectations, as well as the 3% drop in Brent Crude futures to around $76 a barrel.
Among the fallers, an 8% slump for Boeing shares after a blowout on a 737 Max 9 plane limited the gain for the Dow Jones Industrial Average to 0.6%.
In today’s session, Asia markets are higher on the back of the US progress and CMC Markets expects the FTSE 100 index to open up 18 points at 7712.
Recap: Yesterday's top stories
06:40 , Simon Hunt
Good morning.
The Standard’s City desk had a big year in 2023, as our selection of stock tips delivered returns well ahead of the market.
Simon Hunt’s pick of Darktrace was the top performer, with the cybersecurity firm’s stock surging 41%.
If you’d bought an equal value of shares in all six tips, you would have finished the year up almost 20%. That’s a performance that few of the City’s highest-paid stock pickers managed to match.
Read last year's stock picks here and find out our share tips for 2024.
Here's a summary of our top stories from yesterday:
Bet 365 boss Denise Coates pays herself £220 million in salary and £50 million in dividend despite the online betting company making a loss
Spread better firms CMC Markets and Plus 500 both raise their forecasts for te year
Shell says earnings from its gas trading operations are forecast to be “significantly higher” in the fourth quarter
