FTSE 100 Live: Stocks rally to new high as UK exits recession; economy growing at fastest rate in two years

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  • FTSE 100 up 56 points to 8,437

  • Tesla gigafactory stormed by protestors 

  • GDP rises 0.6% in first quarter

15.56pm: FTSE 100 to close out week at record high

The FTSE 100 is set to close out the week at another all-time high, continuing one of the index’s best runs in recent times. 

The blue-chip index is set to close around 56 points, or 0.7%, higher at 8,437. 

Today’s gains were helped by 3% rises for St James’s Place, Standard Chartered and Spirax-Sarcro Engineering.

British Airways owner IAG kept flat despite reporting its net losses after tax had decreased to €4 million from €87 million in the first quarter.

Anglo American jumped around 1.5% after it was revealed Rio Tinto may be interested in purchasing it, with Glencore also believed to be mulling an offer. 

Rightmove was the index’s biggest faller, dropping nearly 5%, after it if failed to tweak its guidance despite saying it would be “a better year for the UK property market in 2024 than in 2023″.

15.31pm: Morrisons workers to strike 

Morrisons workers are set to walk out after they disagreed with the company’s changes to their pension plans. 

Unite union said around 1,000 of its members who are employed as warehouse stock controllers, canteen staff and administrators at the supermarket voted in favour of the strikes. 

Workers based in Chesire in Wakefield will take part in industrial action between May 23 and May 26 before a second strike from June 13 to June 16. 

The dispute is believed to be over changes to pension contributions, which Unite says will leave employees £500 worse off. 

Sharon Graham, Unite’s general secretary said: “Unite is focused on our members’ jobs, pay and conditions and these unmerited changes to workers’ pensions will leave our members worse off every month.”

14.34pm: US stocks open higher

Wall Street has opened higher on Friday as US stocks finish up first quarter results season and investors turn their focus to interest rate hikes. 

All three indexes rose around 0.2% at the sound of the opening bell, with the Dow Jones at 39,479, the S&P 500 at 5,227 and the Nasdaq at 16,385.

Yesterday, weekly jobless claims rose to their highest level in nearly a year, pushing bond yields higher, indicating that the US may cut rates in 2024. 

While company results appears to be settling down in the States, it hasn’t stopped some stocks from soaring. 

Novavax, the biotech firm, soared 134.9% at the open after it revealed it agreed a deal to sell its Covid vaccine with Sanofi, the French pharmaceutical giant. 

The two companies will co-commercialise Novavax’s product across the globe, barring India, Japan and South Korea due to the US company already having partnership deals there.

14.17pm: UK economy to keep growing at similar pace 

Britain’s economy is expected to continue growing at a similar pace in the current quarter, the National Institute of Economic and Social Research (NIESR) said.

Between April and June, the research institute believes GDP will grow by 0.6%, matching the first quarter figure released this morning. 

NIESR said: “The fact that the UK’s GDP growth transitioned into positive territory after experiencing the shallow recession in the second half of 2023 is encouraging. However, the UK economy has largely flatlined following the initial stages of post-pandemic recovery.

“To escape the low-growth trend into a new and sustained era of high output growth requires structural changes and public investment.

“We expect that monthly GDP will continue its momentum in April, growing by 0.1 per cent relative to March, driven by growth mainly in services and production, particularly Agriculture.”

13.56pm: Apple apoligies for iPad advert

Apple has apologised for its advert for the new iPad after it showed creative tools such as cameras, paint cans and musical instruments being crushed by an industrial press.

Some celebrities and artists were left outraged after feeling the advert celebrated the destruction of artistry, with actor Hugh Grant claiming it represented the “destruction of the human experience”.

Tor Myhren, Apple’s vice president of marketing communications, responded: “Creativity is in our DNA at Apple, and it’s incredibly important to us to design products that empower creatives all over the world.

“Our goal is to always celebrate the myriad of ways users express themselves and bring their ideas to life through iPad. We missed the mark with this video, and we’re sorry.

13.31pm: Wall Street to open higher 

US stocks are poised to open higher on Friday, with the Dow Jones on track to record its long winning streak this year.

Dow Jones futures implied the index would open around 122 points higher at 39,629.

Should the index finish the session higher it would mark the seventh consecutive session of positive gains. The longest streak before this was a nine-day run in December. 

Both the S&P 500 and Nasdaq are also expected to open higher, with the former implied to rise 16 points to 5,255, having closed above the 5,200 mark for the first time since early April.

Chris Hyzy, chief investment officer of Merrill and Bank of America Private Bank said: “What’s important in all of this context is, ‘are we in the early stages of a long-term bull market or not?

‘It feels comfortable saying it on a day like this, but we are, in our opinion.”

13.14pm: Activists storm Tesla gigafactory in Berlin 

Tesla’s gigafactory in Berlin has been stormed by environmental activists, who broke through police lines after initially protesting outside the site. 

Campaigners had started protests outside the site on Thursday over the EV maker’s plans to expand the facility into a forest nearby. 

Social media posts showed hundreds of the protesters running into the site, while police officials attempted to stop them by spraying mace. 

“At this camp we are working together to protect forests and water and for a real transport transition, beyond Tesla,” Karolina Drzewo, a spokesman for the campaigners said.

12.56pm: Anglo-American lifts on fresh takeover reports 

London’s blue chips are continuing to push higher, smashing yet more intra-day records as they look to finish the week at yet another record high. 

The FTSE 100 is up around 67 points or 0.8% at 8,448, helped by gains from Standard Chartered, Kingfisher and Glencore. 

Also rising 2% was Anglo American, the mining company which has been at the centre of takeover interest from industry rivals. 

Last month, the group rejected an offer from BHP as management claimed it significantly undervalued the company. 

Last week, reports revealed Glencore was mulling a bid.

Now its Rio Tinto’s turn, with Australian reports indicating it was also considering tabling an offer. 

Rio “management had not ruled out making a play for part or all of the mining group and continued to study the day-to-day situation”, the Australian Financial Review reported. 

12.32pm: Jaguar Land Rover sees profits soar on record revenues 

Jaguar Land Rover posted its largest set of annual profits in nearly a decade after it said it achieved “sustained global demand” for its luxury vehicles. 

Pre-tax profits reached £2.2 billion for the year, an improvement on every year since 2015.

It comes as revenues hit all-time highs of £29 billion, driven by a record fourth quarter, which saw sales soar to £7.9 billion.

JLR’s total order book reached 133,000 vehicles by the end of its financial year, 76% of which were for Range Rovers, Range Rover Sports and Defender models. 

Around 28,700 drivers signed up to the waiting list for Range Rover’s new electric vehicle. 

Chief executive Adrian Mardell said: “We have delivered a record financial performance for the company, generating free cashflow of £2.3bn, enabling us to reduce net debt to £700m.

“The foundation of this performance was the sustained global demand for our modern luxury vehicles, led by our Range Rover and Defender brands, underpinned by a consistent focus on operational improvement.”

12.13pm: Lidl hikes workers pay again

Lidl is hiking its workers’ pay for the third time in the last twelve months as it restarts its expansion plan. 

Ahead of a planned hiring spree, the German discounter has upped hourly pay from £13.55 to £13.65 in London and from £12 to £12.40 in the rest of the UK.

After increasing salaries in both September and March, Lidl now claims it offers the best hourly pay within the supermarket industry.

Lidl recently restarted its expansion drive, planning to open hundreds of stores within the coming years.

New sites are expected to be opened in areas such as Edinburgh, Leeds and Woking.

The supermarket also offered Brits the chance at a cash reward for recommending a suitable location for a new store. 

11.44am: UK economy “going gangbusters”, says ONS

Britain’s economy is “going gangbusters” claimed the UK’s Office for National Statistics, after it was revealed the country had escaped a short-lived recession. 

GDP increased by 0.6% during the first three months of 2024, beating the market consensus of a 0.4% lift. 

ONS chief economist Grant Fitzner said: “To paraphrase the former Australian Prime Minister Paul Keating, you could say the economy is going gangbusters.”

James Smith at ING added: “The bottom line is that the economy is entering a brighter period. The timing of the March bounce provides a nice starting point for the second quarter, where growth could easily come in at 0.4% or 0.5%.”

11.21am: Oil prices rise 

Oil prices have risen for the third consecutive day, bringing the commodity to a one-week high.

It comes as US unemployment data surged to its highest level since August last year, bolstering the argument that the Federal Reserve should cut interest rates this year.

Brent Crude, the international benchmark, lifted 0.55% to US$84.34 per barrel. 

West Texas Intermediate, a benchmark for “lighter” oil, jumped 0.68% to reach US$79.80 a barrel. 

Also helping improve sentiment were dovish messages from the Bank of England yesterday as it nears an interest rate cut in the coming months. 

10.59am: June rate cut likelihood grows 

Money markets have narrowed the odds that the Bank of England will cut interest rates in June.

Markets are now estimating there is a 48% chance that the BoE will lower borrowing rates to 5% next month, while there is a 52% possibility it will hold. 

Yesterday, a June rate cut was 45% likely. 

Governor Andrew Bailey warned markets that upcoming rate cuts could be sharper than expected. 

Derek Halpenny at financial group Mitsubishi UFJ said: “Most of the key guidance comments…were clear in signalling rate cuts are coming.

“Mostly notable was Bailey’s Comment that the monetary stance would “likely” need to be made less restrictive and “possibly more so than currently priced into market rates”. That comment really couldn’t be much clearer in signalling where the bias is shifting within the MPC and in our view strengthens the prospect of a June cut.”

10.11am: Sorrell’s S4 to cash in on AI boom 

Martin Sorrell’s digital marketing firm S4 Capital saw its shares jump by over 17% after it revealed it was honing in on AI projects.  

S4 Capital’s share price lift comes despite sales slipping by a fifth to £210 million in the first three months of the year.

Sorrell, who also founded the world’s largest advertising and PR firm WPP, has previously warned about the threat of a shrinking ad industry and said S4’s sales slump was driven by “volatile global macroeconomic conditions” and “general client caution”.

He added: “In addition to significant new business activity, we continue to capitalise on our prominent AI positioning, developing multiple initial assignments as clients start to experiment with and implement applications.”

9.53am: British Airways can fly higher

British Airway owner IAG saw shares rise 1% today after it reported net losses after tax had decreased to €4 million from €87 million in the first quarter.

The airline has lifted around 3.5% in the last five days, helping it increase its market valuation by close to a fifth within the year-to-date. 

Derren Nathan, head equity researcher at Hargreaves Lansdown said: “The timing of the Easter break no doubt helped but, even so, it’s an impressive start to the year.

“There was little in the way of forward guidance but the tone was confident, with IAG well positioned for the summer, against a backdrop of continuing high demand for leisure travel. 

“Although the shares have performed well recently, the valuation is still below the historic average as a multiple of revenue.

“IAG could fly higher still.”

9.34am: Gas prices on track for two weeks of gains  

Gas prices have lifted higher, placing it on track to register two consecutive weeks of gains.

Europe’s benchmark contract lifted up as much as 1.4% on Friday, with global heatwaves driving demand for air conditioning. 

Britain’s equivalent contract notched as much as 1.6% during this morning of trading. 

In Norway, ongoing maintenance at facilities is being monitored in case the work overruns, as it could potentially affect supplies. 

9.14am: FTSE 100 still smashing record highs

The FTSE 100 is continuing its stellar run which has seen hit breach all-time highs multiple times in recent months.

Today, the blue-chip index jumped around 41 points to rise above the 8,4000 mark for the first time in its history.

Top risers include Antofagasta, Glencore and Vodafone.

Meanwhile, Rightmove, down 4.5%, is the only constituent to have experienced a share price slide greater than 1%.

8.53am: The morning so far

Markets entered the last day of a shortened week in high spirits, continuing a remarkable run of all-time highs for London’s blue chips.

The FTSE 100 is currently up 40 points, making for a fresh all-time high of 8,421.

Stocks are bolstered by today’s GDP print showing the UK economy grew 0.2% year on year and 0.6% sequentially in the first quarter of 2024, officially putting recession fears to rest after slipping at the end of 2023.

It follows a rather dovish hold on interest rates from the Bank of England yesterday, making for a bullish macroeconomic environment for stocks to rally.

Rightmove’s trading update also brought some optimism to the housing market, with the property portal reporting a 1.1% month-on-month increase in average asking prices and a 17% rise in sales agreements from January to April 2024.

However, Rightmove’s share price went in the other direction, falling 5% to make it the worst performer among the FTSE 100 set. Traders may have been disappointed by the unchanged forward guidance.

Elsewhere in company news, British Airways owner IAG saw a major improvement in its financial performance for the first quarter of 2024, with net losses after tax decreasing to €4 million from €87 million in the first quarter of 2023. Shares added 0.85% in early trades.

Oteher top footsie risers include Ocado Group, Glencore, Vodafone and Fresnillo.

Dr Martens PLC (LSE:DOCS) confirmed its newly appointed chief finance officer will join the company two weeks earlier than forecast.

Giles Wilson was initially set to take up his role on 27 May, but will now start on Monday, May 13. Shares were off 0.5%.

8.40am: Rightmove shares off 5%

Rightmove’s latest trading update has underwhelmed, going by the property portal’s poor performance in early exchanges.

The group reported a 1.1% month-on-month increase in average asking prices and a 17% rise in sales agreements from January to April 2024.

Although Rightmove expects “a better year for the UK property market in 2024 than in 2023”, the market may have been disappointed at the unchanged guidance.

Revenue growth predictions for 2024 were kept at 7-9% higher than in 2023, with an operating margin forecast remaining steady at 70%.

Shares are swapping for 544p, down 5%, making it the worst performer among an otherwise bullish FTSE 100 set.

8.27am: FTSE 100 continues march higher

The blue-chip index rallied 45 points to 8,425 in the opening 30 minutes, building on the impressive run of all-time highs seen in the past week.

Top footsie risers include Ocado Group, Glencore, Vodafone and Fresnillo.

8.21am: UK economy has turned a corner

Here is what Susannah Streeter, head of money and markets at Hargreaves Lansdown, said of today’s GDP print: “The UK economy has jogged out of recession, picking up pace more than expected. It’s clear a corner has been turned, as intense cost-of-living pressures subside, and consumers and companies eye lower borrowing costs on the horizon.

“The 0.6% growth registered in the first three months of the year was higher than forecast, with the green shoots seen in January and February flowering into a stronger growth spurt in March.

“Confidence breeds more optimism, and with the economy showing signs of repairing and the FTSE 100 rallying higher, the glass half full sentiment is settling in.”

8.07am: Rightmove expects UK property market to improve

Rightmove PLC (LSE:RMV) has updated its average revenue per advertiser (ARPA) guidance to reflect increased customer numbers.

The property portal reported a 1.1% month-on-month increase in average asking prices and a 17% rise in sales agreements from January to April 2024.

Rightmove said the rental market remains robust, with an 18% increase in listing availability and average rents up 7.6% compared to the same period in 2023.

Rightmove’s customer base grew by approximately 250 agent members since the end of 2023, with notable growth in the lettings sector. The company also added over 90 new developments to its Access package for housing associations.

Revenue growth for 2024 is anticipated to be between 7-9% higher than in 2023, with an operating margin forecast remaining steady at 70%. The number of agent branches is expected to increase by up to 2% this year.

“Overall, we continue to expect a better year for the UK property market in 2024 than in 2023,” said chief executive Johan Svanstrom.

7.50am: British Airways owner IAG lands solid first-quarter results

British Airways owner International Consolidated Airlines Group SA (LSE:IAG) saw a major improvement in its financial performance for the first quarter of 2024, with net losses after tax decreasing to €4 million from €87 million in the first quarter of 2023.

On the top line, total revenues increased 9.2% year on year to €6.43 billion and operating profit rose to €68 million from €9 million.

Passenger capacity, measured in available seat kilometres (ASK), grew by 7%, while fuel costs per ASK reduced by 4.9%, reflecting lower average fuel prices.

The results build for a solid year of recovery for IAG, justifying numerous upgrades, including one from JPMorgan in March.

Luis Gallego, chief executive of IAG, stated: “Our transformation initiatives and increased demand, including over the Easter holidays, have delivered another very good set of results with improvements to both revenue and operating profit.

“Our group benefits from the strength of our core markets – North Atlantic, South Atlantic and intra-Europe – and the performance of our brands.

“Investment across the group in transformation is delivering encouraging improvements in punctuality and customer experience at our airlines. IAG Loyalty continues to perform very well.”

Galileo said the group is “well-positioned for the summer”.

7.26am: UK economy grows in first quarter

The UK economy grew 0.2% year on year and 0.6% sequentially in the first quarter of 2024, officially putting recession fears to rest after slipping at the end of 2023.

In fact, Britain’s economy grew at the fastest rate in two years, with the 0.6% quarter-on-quarter growth rate eclipsing market forecasts of 0.4%.

Services grew 0.7%, production 0.8% and construction 0.9%.

“Encouragingly, the UK’s economic growth seen so far this year is broad-based across both manufacturing and services. Meanwhile, confidence among both businesses and consumers has grown,” said Rob Morgan, chief investment analyst at Charles Stanley (LSE:CAY).

“Having battled the impact of stubborn inflation and high interest rates, many households are now starting to reap the benefits of inflation falling more rapidly than wage growth.”

But Morgan warned that it’s still “a lacklustre situation. Zooming out to the bigger picture, the economy is likely to continue to tread a steady but underwhelming path and requires productivity gains to set it on a steeper growth trajectory”.

7.10am: Stocks to hit another record

The FTSE 100 is expected to round the week off by opening at another all-time high, with futures contracts suggesting 33 points of gains to 8,413 when markets open.

If it holds at this level until close, it will mark the sixth straight day of record highs for the blue-chip index.

Dovish undertones from the Bank of England’s interest rate hold on Thursday have put the stock market in good spirits, while today’s GDP print proved that the UK’s technical recession at the end of 2023 was as shallow as it comes.

British Airways owner International Consolidated Airlines Group SA (LSE:IAG) will shortly have its first-quarter results out, as will Rightmove and Cairn Homes.

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