Choppy stock market conditions are continuing after a spike in bond yields caused by higher-for-longer interest rate expectations.
Tech stocks led US markets sharply lower on Tuesday night, with the Vix index of volatility at its highest level since May.
In London, Tesco shares are in demand after the supermarket giant upgraded its full-year profits guidance.
FTSE 100 Live Wednesday
Tesco upgrades profit guidance
UK private sector still in decline
Spirent shares slide on weaker outlook
End-of-day market snapshot
Wednesday 4 October 2023 16:55 , Daniel O'Boyle
Take a look at our market snapshot as the FTSE 100 closes lower.
FTSE closes down after another afternoon tumble
Wednesday 4 October 2023 16:36 , Daniel O'Boyle
The FTSE 100 tumbled in the afternoon for the third straight day, eventuallly finishing at 7,412.45.
The index fell below the 7400 mark, leaving it at its lowest in over a month, before reocvering some of those losses late in the day.
To risers included IAG after an upgrade and Tesco following its results. Fallers included Whitread and BAE.
Richard Caring’s rapid rollout helps to serve up record profits for The Ivy’s parent company
Wednesday 4 October 2023 14:48 , Daniel O'Boyle
Richard Caring’s rapid rollout of The Ivy restaurant brand has delivered record sales and profits despite the challenges facing the hospitality sector, latest accounts reveal.
Troia (UK) Restaurants, which owns the original Theatreland celebrity haunt as well as dozens of other sister venues that bear its name, saw sales grow by half to £302.9 million in 2022. Pre-tax profits were also higher, from £20.4 million to £29 million.
Caring bought The Ivy in 2005 and launched the first spin-off, Ivy Market Grill in Covent Garden, in 2014. Since then, there has been a quickfire expansion all over the UK, including under the Ivy Asia format, which has been the focus of much of the recent expansion.
What3words: The life-saving app that finds everything apart from profits
Wednesday 4 October 2023 14:14 , Daniel O'Boyle
A little more than a year ago, hundreds of thousands of people packed the streets of London in the queue to see the coffin of the late Queen. We British are known for our queuing etiquette, but even for us, something which at its peak ran as long as 10 miles had the potential to become very unruly. Mercifully, a novel piece of technology was on hand to assist.
The Department for Culture, Media and Sport (DCMS) issued instructions to attendees on where they should head to join the back of the queue. ‘Go to tent.pipe.descended’ for the queue, said DCMS on Twitter. ‘Now head to doll.heads.effort. Now same.valve.grit. Now trendy.format.fuel.’
The response of a lot of people might have been: ‘What on earth are you talking about?’ The locations sounded more like MI5 codenames than places on a street in Westminster.
For many, this was their first introduction to what3words: a geolocation app designed to make it easier to pinpoint precise locations using three-word co-ordinates when an address either doesn’t exist or won’t suffice.
Market snapshot as FTSE sinks again
Wednesday 4 October 2023 13:37 , Daniel O'Boyle
The FTSE 100 has sunk back into the red, though gilt yields have also eased slightly.
Take a look at our key market data,
Young London tech workers pin hopes on AI
Wednesday 4 October 2023 13:22 , Simon English
Gen Z tech workers in London believe the generative AI revolution will supercharge the industry they work in, as startups across the capital emerge to cash in on the technology.
A survey of 2,000 20-30-year-olds working in tech across Europe by venture capital investor Eight Roads Ventures shows that British tech workers are more confident of AI than any other European workers, with 4 in 5 convinced it will boost their careers.
Levels of job satisfaction among young UK tech workers have bounced back this year. The proportion of employees feeling unhappy in their role fell from 35% in 2022 to 15% in 2023.
Hopes for AI follow a host of London companies raising funds from venture capital investors in the last six months and ChatGPT developer OpenAI opening its first office outside the US in London.
Davor Hebel, Managing Partner, Eight Roads Ventures, said: “Today’s young professionals are proving just how resilient and adaptable they can be. Not surprisingly, they are the fastest generation to embrace AI, seeing it as a strong productivity lever, and not a threat.”
The survey of Gen Z workers also indicates that younger workers are keen to return to the office, with more than half preferring to work four or five days in the office. Almost a third (29%) said they prefer being in the office five days a week, while only 9% said they like working fully remotely.
Merger could push up scampi prices in UK pubs and restaurants, CMA finds
Wednesday 4 October 2023 13:12 , Daniel O'Boyle
A merger of the UK’s two largest scampi suppliers could ultimately push up prices for UK pubs and restaurants, the competition watchdog has said.
Whitby Seafoods is currently the largest UK supplier of breaded scampi to customers including pubs, restaurants, and fish and chip shops, holding a market share of about 90%.
Businesses slam Sunak decision to scrap Northern leg of HS2
Wednesday 4 October 2023 12:29 , Daniel O'Boyle
Rishi Sunak has officially scrapped the Northern leg of HS2, arguing the facts had changed since the project was launched, in a decision widely condemned by business leaders.
BusinessLDN chief executive John Dickie said: “The Government has done the unthinkable by building a new north-south railway and stopping halfway.
“This short-sighted decision has been made with little attempt to work with business to explore how costs could be reduced and private investment increased. It pulls the handbrake on the long-term benefits of growth, levelling up and sustainability that HS2 would have delivered for communities across the country.
“Constant chopping and changing has increased costs and undermined delivery of HS2. This meddling by ministers sends a very negative signal to investors and contractors, which will drive up the price that we all pay when it comes to delivering future major infrastructure projects.”
Market snapshot: FTSE steady, gilt yields remain high
Wednesday 4 October 2023 12:24 , Daniel O'Boyle
The FTSE 100 is slightly up today after an initial fall, but gilt yields are still at historic highs.
Take a look at our full market snapshot.
SSE sees production lower than hoped due to poor weather
Wednesday 4 October 2023 11:27 , Daniel O'Boyle
Electricity giant SSE said output from its renewables divisions has been worse than planned in the six months to the end of September, as the weather proved unfavourable.
The generation company said output was around 19% lower than had been expected during the period, leaving it with a 7% shortfall compared with where it expects to be by the end of the financial year.
SSE said it expects that adjusted earnings per share will hit “at least 30 pence” when it reports results for the six months.
Prime London housing market more robust than mainstream equivalents – Savills
Wednesday 4 October 2023 11:00 , Daniel O'Boyle
The prime property market in London appears to be holding up relatively strongly in the face of rising interest rates, according to an index.
House prices in prime central London in the third quarter of 2023 were typically 1.2% lower than a year earlier, estate agent Savills reported.
Property values across London’s prime property market generally were down by 2.1% annually in the third quarter of this year.
Savills’ definition of prime properties is those in the top 5% to 10% by value in any given market.
India deal boosts Superdry shares, FTSE 100 flat
Wednesday 4 October 2023 10:30 , Graeme Evans
Heavily-sold Superdry shares jumped 28% today as investors cheered a deal accelerating the brand’s growth opportunities in India.
The proceeds from the sale of Superdry’s intellectual property in South Asia to India’s Reliance Brands provides a timely boost for the UK chain’s balance sheet.
As part of today’s agreement, India’s largest retailer will hold 76% of a newly-created joint venture targeting the country’s fast-growing fashion market.
Superdry shares jumped 12.1p to 55.3p, putting back some of the heavy falls seen after founder and chief executive Julian Dunkerton reported a bottom-line loss of £148 million in last month’s delayed full-year results.
When it was flying high and its logo-led clothes seemed to be everywhere, the company had a stock market value of £1.6 billion. That’s now down to about £50 million.
The India deal, which is subject to shareholder approval, is the second major overseas move after the recent sale of the Superdry trademark in Asia Pacific countries.
Superdry expects cash proceeds of £30 million from today’s agreement, adding that existing partner Reliance is best placed to drive growth in India while it focuses on the areas where it has strongest expertise.
The rebound for Superdry came during another testing session for London investors amid the prospect of global interest rates staying high in 2024.
While the FTSE 100 index held firm with a rise of 5.70 points to 7475.86, the mood was little changed on yesterday’s decline of 0.5%. Among stocks on the front foot, British Airways owner IAG lifted 2.65p to 147.45p.
Energy giant SSE was also in focus after it revealed renewables output some 19% below plan, mainly due to adverse weather conditions in the six months to 30 September.
Despite the shortfall, it continues to forecast adjusted earnings per share of more than 150p across the financial year. Shares rose 10.5p to 1531p, having fallen by about 5% in the past month.
The FTSE 250 index closed last night at its low for the year, with the UK-focused benchmark off another 62.05 points to 17,615.71 today. In the FTSE All-Share, Smiths News jumped 2.1p to 42.9p after it forecast operating profits at least in line with City expectations of £38.1 million.
Telecoms testing firm Spirent’s shares plunge 34% on profit warning
Wednesday 4 October 2023 09:49 , Daniel O'Boyle
Shares in telecoms testing firm Spirent Communications plunged by as much as 34.3% as it warned its clients are delaying their spending on infrastructure.
The business expects a 20% fall in revenue this year as network providers which use Spirent to make sure their 5G services are not at risk of going down “continue to be very challenged”, and so are not spending on Spirent’s services.
The business said that, after a weak start to the year, it had expected to see “a strong pick-up in orders from China”, which represents a large portion of its revenue. However, this did not occur, as the Chinese government cut spending amid fears that trouble in the country’s property sector could turn into a wider crisis.
Private sector declines in September, but by less than feared
Wednesday 4 October 2023 09:37 , Daniel O'Boyle
The UK private sector was stronger than expected in September, but still in decline, according to a closely watched survey.
The S&P Global / CIPS UK Services Purchasing Managers Index came to 48.5. While any figure below 50 still represents decline, that’s ahead of the initial “flash” reading of 46.5. The dominant service sector’s PMI reading was 49.3, well ahead of the flash 47.2 figure.
John Glen, Chief Economist at the Chartered Institute of Procurement & Supply (CIPS), said:”The UK economy is still showing signs of strain and the impact of interest rate rises are having an effect. Consumers are concerned by the higher cost of living and expenses continuing to rise especially fuel costs and are reining in spend accordingly.”
Motorway losses triple amid accounting error
Wednesday 4 October 2023 09:00 , Simon Hunt
Online used car marketplace Motorway saw its losses more than triple in 2022, its annual report shows, as the firm discovered a £1.3 million ‘error’ in its previous accounts.
The London-based business saw a 237% rise in its pre-tax losses to £43.4 million, greater than its total sales for the year which stood at £41.2 million. Motorway put the losses down to increased costs associated with recruiting more staff and a splurge on marketing spend to “increase brand awareness and engagement from sellers and dealers on the platform.”
Motorway also said it had discovered an ‘error’ in in its 2021 accounts after failing to record the costs of share-based payments made to staff, which increased expenses by £1.3 million. Accountants PwC said Motorway’s restated figures for 2021 were unaudited as a result of the change.
Motorway rival Cazoo last year laid off as many as 1500 staff and withdrew from several European markets as CEO Alex Chesterman blamed a “perfect storm” of “rising inflation and interest rates with supply chain issues caused by the pandemic and war [which] has driven up the cost of living and hit consumer confidence."
Motorway co-founders Tom Leathes, Harry Jones and Alex Battle each have a net worth of £46 million, according to the Evening Standard Tech Rich List.
Tesco leads FTSE 100, Spirent slumps 27% in FTSE 250
Wednesday 4 October 2023 08:26 , Graeme Evans
Tesco shares are more than 2% higher, up 5.7p to 265.3p, after the supermarket giant upgraded its profits guidance alongside half-year results.
Energy giant SSE was the other blue-chip stock in focus today after it said its renewables output had come in 19% below plan due to adverse weather conditions in the six months to 30 September.
Shares still rose 4p to 1524.5p as SSE stuck by expectations for full-year adjusted earnings per share of more than 150p across the financial year.
The wider FTSE 100 index held firm at 7469 but selling pressure for the FTSE 250 continued as the UK benchmark dropped another 83.46 points to 17,594.30.
The worst performing stock in the FTSE 250 index was telecoms testing firm Spirent Communications, which slumped 27% or 36.15p to 94.95p after it lowered the City’s full-year results expectations.
Tesco toasts higher profits and sees food inflation falling
Wednesday 4 October 2023 07:32 , Joanna Bourke
Tesco has seen food inflation fall and expects further easing, the supermarket giant’s boss said alongside reporting higher revenue and profits.
Like for like sales at the UK’s largest supermarket chain rose 8.4% in the six months to end of August, helping total revenue gain 5% to £30.7 billion (excluding fuel).
The FTSE 100 company added that pre-tax profits soared to £1.2 billion from £396 million, although last year’s figure included a significant impairment charge. Adjusted operating profit was 14% higher at £1.48 billion.
Tesco, which has around 27.2% of the UK grocery market share, has been facing rising costs but has also been trying to keep prices low and price match with discounter rival Aldi.
Chief executive Ken Murphy said: “We are committed to doing everything we can to drive down food bills and Tesco is now consistently the cheapest full-line grocer.”
He added: “Food inflation fell across the half and while external pressures remain, we expect that it will continue to do so in the second half of the year. We are in a strong position to keep investing for customers, and will continue to lower prices wherever we can.”
Following the grocer’s “strong” first half performance it expects full year retail adjusted operating profit of between £2.6 billion and £2.7 billion. The firm previously guided £2.5 billion.
US rate rise fears continue, FTSE 100 seen lower
Wednesday 4 October 2023 07:25 , Graeme Evans
Shares in Tesla and tech giant Amazon fell by 3% last night as the pressure from higher bond yields continues to be felt on Wall Street.
With the Vix index of volatility above 20 for the first time since May, the selling left the Nasdaq Composite down by 1.9% and the S&P 500 index at a four-month low following a 1.4% decline.
The flight from risk followed better-than-expected figures on the number of job openings in the US economy, with traders increasingly worried that interest rates will stay high.
The 10-year Treasury yield reflected this by rising more than 10 basis points to close at a post-2007 high of 4.80%, while the UK’s 30-year gilt yield finished yesterday’s session at its highest level since 2002 at 5.05%.
The poor trading conditions left the FTSE 100 index 0.5% lower last night, with the UK-focused FTSE 250 index now at its lowest level this year.
Asia markets traded lower this morning and CMC Markets expects no upturn in trading conditions in London after forecasting the FTSE 100 will open six points lower at 7464.
Vertu eyes acquisitions as profits grow
Wednesday 4 October 2023 07:24 , Daniel O'Boyle
Vertu Motors says it is seeking acquisition opportunities as profits rose in the first half of the year, while revenue jumped beyond £2.4 billion.
The car dealership firm’s profits grew to £31.5 million, as revenue grew by 20%.
Boss Robert Forrester said: “The consistent strategies around digitalisation, cost efficiency, smart capital allocation and the development of our management and colleagues is providing a firm grounding to deliver value to our shareholders.”
The business is looking for bolt-on acquisition opportunities, while some of its London-listed rivals have been the subject of discussions about being acquired this year.
Forrester added: “Trading in the key month of September was strong reflecting the plate change in new cars."
Recap:Yesterday’s top stories
Tuesday 3 October 2023 21:50 , Simon Hunt
Good morning. Here’s a summary of our top headlines from yesterday:
Fears of a major fashion crunch deepen as online retailers Boohoo warns of revenue slump of up to 17% this year
All conquering Greggs becomes the biggest fast-food chain in the UK as it it targets record 140 new shop openings this year
Long term gilt yields surge over UK economic uncertainty
AstraZeneca pays $425 million to settle US product liability claims over stomach acid drugs Nexium and Prilosec
Westminster report: Number of candy stores on Oxford Street falls from 29 to 21 after crackdown
Ryanair reports 9% jump in passengers in September