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FTSE 100 Live: Flat week as FTSE closes at 7757; Tesco chair to step down; US shares down on default fears

The FTSE 100 is higher today  (Evening Standard)
The FTSE 100 is higher today (Evening Standard)

The FTSE 100 index found positive territory today despite Hong Kong shares falling after Alibaba sales came in below expectations.

Traders on both sides of the Atlantic have been lifted by signs that the US will avoid a debt default, while Japan’s Nikkei 225 closed the week near to a three-decade high as the weak yen continues to benefit overseas-earning stocks.

London’s upbeat mood was reflected in the latest update from FTSE 100-listed conglomerate Smiths Group, which raised its full-year revenues guidance for the third time this year.

FTSE 100 Live Friday

  • Nationwide posts record profits

  • Hong Kong stocks slide on Alibaba sales miss

  • Consumer confidence continues to recover

Key market data as trading session comes to close

16:52 , Daniel O'Boyle

As today’s trading session draws to a close, here’s a look at today’s key market data.

Click through the buttons below to view the data.

FTSE ends week at 7,756.87

16:38 , Daniel O'Boyle

The FTSE 100 finished the weak almost perfectly flat, closing today at 7756.87.

The index of London blue-chips was close to 7800 for much of the day, but fell late on amid comments from US central bankers about the Federal Reserve’s interest rate strategy and an apparent step back in the country’s debt ceiling talks.

BT was the biggest riser while JD Sports was the biggest faller.

Tesco chair to step down

14:21 , Daniel O'Boyle

Tesco chair John Allan will step down after the company’s AGM next month, the supermarket giant revealed today, after he was accused of inappropriate behaviour last week.

He had been head of Tesco’s board since 2015.

Read more here

Morgan Stanley boss to step down within next year

14:05 , Daniel O'Boyle

Morgan Stanley CEO James Gorman will leave the post within the next year, he revealed today.

At the banking giant’s annual general meeting, Gorman said: “It is the board’s and my expectation that it will occur at some point in the next 12 months”, though he added that this could change in the event of “a major change in the external environment”.

He will initially become executive chairman when his time as CEO is over.

Two thirds of workers think AI will take over more jobs than it creates

14:03 , Daniel O'Boyle

Nearly two in three workers in the UK think the emergence of artificial intelligence (AI) will take away more jobs that it will create, but many fewer are worried about their own prospects, a new study has suggested.

In a poll taken earlier this month before BT said it might lose around 10,000 workers to AI by the end of the decade, 62% of working Britons said that robotics and AI would take over more jobs than they create.

Read more here

Markets snapshot at 1:00pm

13:03 , Daniel O'Boyle

The FTSE 100 climbed higher in the late morning and early afternoon, with the Scottish Mortgage Investment Trust the biggest riser of the day.

Check out all of the latest markets movements with our data hub

Princess of Wales’s parents’ party firm bought after falling into administration

12:57 , Daniel O'Boyle

The party supplier business founded by the Princess of Wales’s parents has been sold in a rescue deal after falling into administration.

Party Pieces Holdings, which was founded by Carole and Michael Middleton in 1987, has been sold to entrepreneur James Sinclair in a pre-pack administration deal.

The Middletons hired insolvency specialists from Interpath Advisory earlier on Thursday.

Read more here

Flexible working reforms move closer to becoming law

12:51 , Daniel O'Boyle

Peers have supported moves to give employees the right to request flexible working from their first day in a job.

The Employment Relations (Flexible Working) Bill is a “very welcome starting point and not an end point” for reforming working conditions, according to Labour.

The measures are supported by the Government and received an unopposed second reading in the House of Lords.

Under the current rules, a person who has 26 weeks of continuous service with their employer can request a change to their working hours, times or location.

Read more here

If we don’t build more and secure TfL funding, London will fall behind

12:45 , Daniel O'Boyle

Earlier this month, the World Health Organisation declared the Covid-19 public health emergency over.

But while the darkest days of the pandemic may be officially behind us, its enduring impact means that our city faces a once-in-a-generation inflection point if it’s to remain successful and meet the changing needs of Londoners.

Read more here

Major survey busts myth that scrapping tourist tax would cost millions

11:47 , Daniel O'Boyle

A major survey of tourists carried out before the Treasury decided to scrap VAT-free shopping found that the scheme was hugely popular with foreign visitors and that much of the money they saved was spent in the UK.

The findings from the confidential research conducted for HMRC call into question the Government’s argument that scrapping the “tourist tax” would cost billions and make little difference to the number of people holidaying in London and the UK.

Read more here

An economist’s stance on the political minefield of migration

11:18 , Daniel O'Boyle

You’re going to hear a lot about migration between now and the next general election.

It’s hard to write about as it has become so politicised. But it can’t be ignored as it can influence the economy. So here are some thoughts on migration with a difference — no politics, just economics.

Read more here

Who will be in line for Nationwide’s new Fairer Share payments?

10:44 , Daniel O'Boyle

Around 3.4 million Nationwide Building Society members are in line for a £100 windfall.

The mutual has launched Nationwide Fairer Share – a new reward for its members “with the deepest relationships”.

A £340 million pot will be distributed to eligible members holding a qualifying current account plus either a qualifying savings or mortgage product.

Read more here

Smiths continues strong run, FTSE 100 higher

10:15 , Graeme Evans

The run of upgrades at Smiths Group continued today as the blue-chip conglomerate said it expects annual revenues to be 10% higher.

That represents the third lift to guidance this year after the airport scanners business oiginally signalled growth of 4%-4.5%.

In today’s update, boss Paul Keel said Smiths had now delivered eight consecutive quarters of growth as most of its markets continue to see strong demand. The Detection arm had a particularly strong three months, reflecting some key contract wins.

Shares lifted 8.5p to 1713p but the FTSE 100 company continues to trade below the high for the year of 1803p seen in early February.

Smiths was overtaken at the top of the risers board by a number of commodity-focused stocks, with Anglo American and Glencore among those up more than 1%.

Their performance helped the FTSE 100 index to improve 23.69 points to 7765.99 as global markets benefit from hopes that the US can avoid a debt default next month.

In Asia, Japan’s Nikkei 225 rallied again as the weak yen and strong domestic earnings lifted the benchmark for the seventh session in row to the highest level since 1990. Hong Kong’s Hang Seng missed out, however, falling 1.4% on the back of disappointing sales figures from e-commerce giant Alibaba.

The update failed to dent the recent recovery of cyclical and tech stocks as Amazon-to-Tencent backer Scottish Mortgage Investment Trust continued its strong week with a rise of 12p to 647p. Elsewhere in top flight, BT shares steadied at 141.35p after yesterday’s results-day mauling.

The FTSE 250 index edged 8.81 points higher to 19,307.06, with Aston Martin Lagonda up another 3% or 7.6p to 267.6p following Thursday’s disclosure of a major investment by Chinese carmaker Geely.

City Comment

09:44 , Simon English

Nationwide Building Society is a national treasure. It exists as a permanent affront to the big banks, which spent years maneuvering in the background, trying to persuade members to force a vote that would see it give up its mutual status and become just like them.

That it fended off these bids is a result for all of us.

One hopes that the commitment of new-ish CEO Debbie Crosbie to this mutual status is as sincere as she says (we’ve no reason to think otherwise).

Commentators who alight on its record profits as if that were evidence that it is just like the big banks really are missing the point. The profits go back to members, not to shareholders, since there aren’t any.

Nationwide’s share of the mortgage market did fall this year a little, but that’s evidence of it sticking to its knitting.

It isn’t, and should not be, in the business of chasing risky business. It isn’t always going to offer the best saving or loan deals at any given moment; it will be just be better value over the lifetime of a member or a member’s mortgage.

That said, there’s a slight feeling it could do more for those with less than pristine credit histories.

Some perfectly reliable people get into trouble due to circumstances they can’t control and deserve another shot, whatever the credit check people say.

Nationwide’s credit impairment charges are low, which helps to protect those who are already members.

What about the hard working, but a bit down on their luck, family that aspires to become members?

Something, perhaps, for Crosbie to think about as she begins her second year at the helm.

Alphawave auditors say its profits are £7 million lower than previously reported

09:35 , Daniel O'Boyle

Chip maker Alphawave revealed today that its profits for 2022 were $7 million (£5.6 million) lower than it had previously reported, as it released its audited accounts three weeks after the Financial Conduct Authority’s deadline.

Alphawave’s shares have been suspended since the end of April, when it said accountants at KPMG had to request more time to complete their audit of its results.

At the time, the chip firm published unaudited figures, showing profit was up 44% to £56.3 million as revenue more than doubled. Its board added that they did “not expect any changes” in the audited version, which they said were going to be published on 12 May, but its shares fell by 15% after it revealed the looming suspension.

However, the final results published today show a profit of £49.3 million, £7 million less than reported in April, with revenue reduced by roughly the same amount.

Market snapshot as trading opens in London

08:20 , Simon Hunt

As trading begins in London, here’s a look through your key market indicators this morning.

Click through the different buttons to view the different data.

FTSE 100 higher as BT steadies, upgrade lifts Smiths Group

08:19 , Graeme Evans

A strong session for investors in the US and Japan has set the tone for a positive start to trading in London, with the FTSE 100 index 16.80 points higher at 7759.10.

Risers included industrial conglomerate Smiths Group, which lifted 20.5p to 1725p after a third quarter trading update included improved full-year guidance for around 10% organic revenue growth. The figure had been 4-4.5% at the start of the year.

BT Group steadied at 141p after yesterday’s results-day hammering, while Burberry lost another 39p to 2350p.

The FTSE 250 index edged 20.42 points higher to 19,318.67, with Aston Martin Lagonda up another 6p to 266p following Thursday’s disclosure of a major investment by Chinese carmaker Geely.

Over-55s fashion retailer Unbound looks for rescue sale

07:49 , Daniel O'Boyle

AIM-listed online fashion for over-55s retailer Unbound is looking to sell itself as it warns that it is unlikely to be able to pay all its obligations at the previously agreed time.

The business warned last week that sales were likely to be lower than anticipated, and at the same time, discussions over new funding had fallen through.

It said  that this  meant it was now likely to need to waive or defer some of its debts  in the short-term, and had opened discussions with banks about this.

“As a consequence of the factors described above, the board has also decided to initiate a formal review of strategic options available to the group, including a formal sale process, pursuant to which the board will consider the options available to maximise value for the company’s shareholders and the group’s other stakeholders,” its board said.

Nikkei leads way as stock markets rally, sterling lower

07:20 , Graeme Evans

The US dollar has continued to strengthen amid optimism over the progress of debt ceiling negotiations and after comments from Federal Reserve officials pushed back against the case for a pause in interest rates.

The pound today dipped below $1.24, which compares with a one-year high of near to $1.27 on 10 May when traders began pricing in further Bank of England rate hikes.

The positive signs that the US will avoid a debt default have also benefited Wall Street shares, with the S&P 500 index up by 0.9% at last night’s close to a near nine-month high.

Cyclical and tech stocks were in demand as the Nasdaq Composite also continued its recent outperformance with a gain of 1.2%.

In Asia, Japan’s Nikkei led the way as the weak yen and strong domestic earnings lifted the benchmark for the seventh session in row to the highest level since 1990. Hong Kong’s Hang Seng missed out, however, falling 1% on the back of disappointing results from Alibaba.

The FTSE 100 index added 0.3% yesterday and is expected by CMC Markets to open 20 points higher at 7762.

Consumer confidence continues to recover despite living cost pressures

06:54 , Daniel O'Boyle

Consumer confidence in the year ahead is continuing to recover despite persistent cost-of-living pressures, a long-running survey suggests.

GfK’s Consumer Confidence Index rose by three points in May to minus 27, the fourth monthly increase in a row from January’s minus 45.

Confidence in personal finances over the coming 12 months saw a “robust” five-point jump to minus 8 – 17 points higher than this time last year.

Read more here

Hong Kong stocks slide on Alibaba sales miss

06:36 , Simon Hunt

Stocks fell in Hong Kong this morning after Alibaba’s fourth-quarter sales miss added to fears of a slowdown in China’s post-Covid recovery.

The e-commerce business posted a 3% drop in its domestic commerce sales, while its cloud division saw its first ever year-on-year revenue dip. Alibaba said it would plan an IPO spin-off for its cloud business, and would consider separate listings for its logistics and grocery businesses.

The Hang Seng China Enterprises Index fell 2.=4%, while Alibaba shares fell as much as 5.4%, their biggest single-day fall in almost three months.

Recap: Yesterday’s top stories

06:23 , Simon Hunt

Good morning. Here’s a summary of our top stories from yesterday.

  1. BT said it would slash as much as 55,000 jobs by the end of the decade as it expected an increased role for AI and automation.

  2. Royal Mail apologised for failures to customers after it made a £1 billion loss amid a wave of strike action.

  3. The CEO of Burberry has warned on the damage caused to the high street by the abolition of VAT-free shopping for tourists and called on Jeremy Hunt to scrap the tax.

  4. The boss of National Grid warned measures used to keep lights on this winter by cutting demand were a “glimpse of the future” after the firm’s operating profits neared £5 billion.

  5. Easyjet said it expects to soar back to profits this year as Brits favour summer sun over almost all other purchases outside household bills.