Oil prices rise after EU agrees Russian sanctions
- FTSE 100 flies 60 points
- Trump agreed to extend EU talks until 9 July
- UK shop price inflation broadly flat in May
4:59pm: FTSE up
The FTSE 100 Index closed up 0.7% today, gaining 60 points to finish at 8,778.
4.13pm: FTSE with spring in step
With just under half an hour to go, the FTSE 100 still has a spring in its step and is heading for a gain of around 0.8%, around 120 points from its all-time high.
Aerospace components maker Melrose Industries (LON:MRON) PLC (LSE:MRO, OTC:MLSPF) and BA parent International Consolidated Airlines Group (LON:ICAG) SA (LSE:IAG) are top of the leaderboard, up either side of 5%.
Private equity investor ICG, defence giant BAE Systems (LON:BAES) and a group of US-exposed stocks such as Ahtead, Entain (LON:ENT) and Polar Capital Technology (LON:PCT) are among the other risers.
Miners, including Rio Tinto (LON:RIO) and Endeavour, are among the fallers.
3.55pm: Quick US comment
After the strong rebound in US consumer confidence, IG market analyst Chris Beauchamp says: "It is unwise to hope that all upcoming US data will be as encouraging as today’s confidence figure, but it is certainly a relief that US consumers have managed to maintain their sunny outlook.
"An early wobble for Wall Street on the open gave way to more gains, though of course there is still tomorrow’s hurdle of Nvidia (NASDAQ:NVDA) earnings to navigate."
3.35pm: Date set for US-EU trade deal talks
Stocks are soaring in New York, with the Nasdaq now up over 2%.
As well as a 5% gain for Tesla, there are also 2%-plus gains for Nvidia, Alphabet (NASDAQ:GOOGL), Broadcom (NASDAQ:AVGO), ASML (AS:ASML) and Palantir (NASDAQ:PLTR).
In the past hour, we’ve had some strong US consumer confidence and some words from Donald Trump.
The consumer confidence index jumped to 98 in May from a revised-down 85.7 the previous month, the Conference Board.
It was the first gain after five months of decline and was much better than Wall Street had forecast, which was for the index to remain around 86.
Trump, meanwhile, posted that he is "extremely satisfied" after his threat of 50% tariffs on the European Union imports resulted in meetings being set up with the EU’s negotiators.
He says the EU "were ’slow walking’ (to put it mildly!) our negotiations with them" and he has "just been informed that the EU has called to quickly establish meeting dates".
"This is a positive event, and I hope that they will, finally, like my same demand to China, open up the European nations for trade with the United States of America. They will both be very happy, and successful, if they do," he added.
2.46pm: New York starts in positive mood
The FTSE 100 has picked back up after Wall Street opened higher.
Tech stocks are leading the way this morning in New York, having been at the forefront of the declines at the end of last week.
The Nasdaq has opened 1.4% higher and the S&P 500 has added 1.2% in early trade, with the Dow Jones and Russell 2000 up 0.9% and 1%.
Back in London, the Footsie is up 0.75%.
British Airways owner IAG, aerospace parts maker Melrose and construction equipment hire chain Ashtead (LON:AHT) are the top risers.
1.44am: UK growth foreast upped by IMF
The UK’s growth forecast for this year has been upped by the IMF as it sees an "economic recovery... underway"
Gross domestic product is expected to grow 1.2% in 2025, up from its previous forecast a month ago when the UK’s predicted performance was cut from 1.6% to 1.1%.
In the first quarter of the year, GDP grew 0.7%, according to the Office for National Statistics.
The IMF’s revisions "reflect the strong GDP performance in the first quarter, reflecting the resilience of the UK economy despite the complex external environment," said the IMF’s Luc Eyraud.
He said GDP growth in 2026 should increase 1.4%, and would have been 1.7% if it was not for US tariffs.
1.05pm: Thoughts on defence sector from JPMorgan (NYSE:JPM)
The gains for defence stocks in London today have been seen in Europe too, following recent geopolitical happenings, say analysts at JPMorgan.
Upward moves in share prices on Monday in Europe was, the analysts think, "due to two major pieces of news over the weekend: expectations for the upcoming NATO summit [and] Russia’s latest attacks on Ukraine".
Many of the European defence companies covered have share prices that are above JPMorgan’s share price targets, the analysts noted, so "we may need to revisit our forecasts in light of fast moving events".
But regardless of current price targets, "we would not be surprised to see the [European defence sector] continue to outperform the market in the coming month at least".
12.14pm: FTSE gives up some gain as US futures surge
London’s blue-chip index has seen some of its earlier progress wiped out in the past hour, as we approach the US begins to wake up.
Having earlier topped the 8,800 mark, only around a hundred points from its all-time high, the FTSE’s defensive status is hampering gains at the moment, with miners – especially precious metals, utilities and big tobacco the main fallers.
US futures have surged higher, led by the tech-powered Nasdaq 100, up 1.5%, while S&P 500 futures have risen 1.3% and those for the Dow Jones are up 1.2%.
Although President Trump has postponed the EU tariff deadline to 9 July, Friday’s sell-off on his threat of a 50% tariff has "left its mark and sentiment remains cautious", says market analyst David Morrison at Trade Nation.
"Investors appear to be weighing the relief from the delay against the possibility of renewed pressure should talks falter."
Despite this caution, the German DAX posted a fresh intra-day high earlier, while the Euro Stoxx 50, like the FTSE 100, is hovering not far from the record highs made earlier this year.
FX markets have been quite busy, Morrison notes, with the US dollar making gains across the board, while the DXY dollar index remains below the key 100 level, "reflecting continued downside pressure amid trade policy concerns and fiscal uncertainty".
As the dollar’s weakness since mid-January has supported commodities like gold, its gains today have accomnpanied a 1.7% decline in the yellow metal today.
The Japanese yen also drew more attention, with the rally in the first four months of this year against the dollar seeing USDJPY fall below 140.00 in April, hitting its lowest level since last September.
"Then the dollar began to bounce, as analysts rowed back on US rate cut expectations, while the Bank of Japan became less hawkish than earlier in the year. Now, the yen appears to be rallying once again, although it spiked lower overnight as Japanese policymakers pondered action to push yields down."
11.38m: Elementis (LON:ELM) and financials
Analysts at Jefferies said the Elementic talc deal was "a positive and long-awaited" deal.
The sale was agreed at 12.6 times EBITA, which is a "significantly higher than the value we ascribed to the business", they add, as their previous valuation estimate had incorporated additional risk following the WHO ruling last year that talc was probably carcinogenic.
Selling off the business "will improve earnings quality and, importantly, reduce a significant overhang for the equity story, which we believe has acted as a hindrance to investor interest."
Shares are up 11.7%.
Scattered among the other FTSE 350 risers are several investment groups, including Jupiter Fund Management (LON:JUP) (9.8%), Bridgepoint (5.9%), Molten (LON:GROW) Ventures (3.9%), Intermediate Capital (LON:ICGIN) (3.8%), Man Group (LON:EMG) (3.1%), Petershill Partners (2.3%), Ashmore (LON:ASHM) (2.2%) and St James (LON:SJP)’s Place (2.1%).
Could bonds be the key?
Going forward, the bond market could be a big driver of stocks, says market analyst Kathleen Brooks at XTB.
However, although UK bond yields were rising last week, the FTSE 100 was one of the best-performing European indices last week, she says.
"However, the real pain of higher yields is felt in the more domestically focused indices, the FTSE 250 slid by more than 1% last week, and we could see more under performance if bond yields remain unstable going forward."
10.38am: Tesla rival cuts prices
Tomorrow is a big day for investors in Nvidia as it reports earnings but today another US tech company favoured by investors is being highlighted: Tesla.
Recent quarterly results from Elon Musk’s electric carmaker were not as bad as the market feared but the company’s global competitive position was brought into focus by price cuts announced by Chinese rival BYD at the weekend,
BYD slashed prices on several of its models, which made "the difference between the price tag on its vehicles versus Tesla’s particularly stark", says Russ Mould at AJ Bell (LON:AJBA).
With Tesla in Europe halving last month, against a backdrop of a meaningful increase in other EVs in Europe, "it suggests the brand damage caused by Elon Musk’s political interventions may be lasting", says Mould.
"The company may also be suffering from its lack of tyre print in the hybrid market with many motorists still wary of going fully electric."
Tesla shares are up 2.6% pre-market this morning, with other factors such as Trump’s EU tariff U-turn perhaps being the driver.
9.56am: Japan’s woes (UK Treasury ’should take note’)
Bonds are in focus again today as is Japan, which is holding out for a deal to eliminate US tariffs, potentially including a huge joint US-Japanese joint wealth fund.
Bond yields are falling around the world this morning, notes Kathleen Brooks at XTB, which is "easing fears of a sovereign debt crunch for some of the world’s most indebted nations".
The drop in bond yields is most pronounced in Japan, where the 30-year yield is down 20bps, but the 30-year US Treasury yield is lower by 7bps and yields in Europe are also lower, led by the UK.
"The driver of the bond market move was reports that Japan’s finance ministry has tapped bond investors to ask their opinions about the appropriate amount of debt issuance they can absorb," says Brooks.
A possible "bargaining chip" in the talks, says market analyst Susannah Streeter at HL, a massive US-Japan fund is mooted as "a blueprint for other countries to create closer investment ties with the US".
Japan’s unsustainable debt metrics have been "hiding in plain sight for three decades," says Marc Ostwald, economist and strategist at ADM Investor Services.
And it has taken almost 18 months for markets to get on board with what’s happening in Japan, he says, with Tokyo’s finance ministry now "effectively being strong-armed" into rebalancing its issuance away from ultra-long government bonds and boosting shorter-dated sales, which will reduce its debt servicing costs.
"The UK Treasury should take note, and action," Ostwald adds.
He says Japan is "no more than papering over the cracks" as its ageing demographics underpins an inherent weakness in domestic demand that make this "a Herculean task to rectify, and it will need to formulate some form of grand bargain, most likely with the US, to leverage its huge pool of external assets to rectify this. This will have a very profound impact on markets for many a year to come."
8.56am: UK retail prices mixed
UK retail prices were broadly flat this past month, according to the monthly shop price index from the British Retail Consortuum and NIQ.
Non-food deflation deepened to 1.5% in May from 1.4% in April, as prices for fashion and furniture saw retailers unwinding heavy promotional activity.
Prices were falling faster for electricals, which the BRC said was due to retailers trying to encourage spending before any potential knock-on impact from US tariffs.
Food inflation increased to 2.8% year on year in May, against growth of 2.6% in April, with beef steaks one of the notable increases as wholesale beef prices increased.
8.34am: Share price movers
Elementis plc (LSE:ELM) shares are up just over 10%, topping the FTSE 350 leaderboard, after its talc deal announcement.
Another mover is React Group PLC (LSE:REAT), which has tumbled almost 22% after the cleaning services company warned that full-year results are now expected to fall below market expectations.
It posted double-digit revenue and profit growth for the first half, but this was thanks to a recent acquisition.
Otherwise, the company cited reasons for the downgrade as being "prevailing sector specific and global economic pressures extending business decision cycles, particularly for higher value contracts".
8.12am: FTSE 100 leaps at the open, aerospace firms fly higher
The FTSE 100 has leapt to a 72-point gain in initial trading to 8,790.67.
Playing catch-up with European indices solid gains yesterday, the London benchmark is being led by finance and aerospace names, including Melrose Industries, BAE Systems, IAG, Rolls-Royce (LON:RR), St James’s Place, Intermediate Capital and Schroders (LON:SDR).
Precious metals miners are the laggards, though the gold price has slipped $40 from Friday.
7.59am: Alphawave still in takeover talks
And talks continue between Alphawave IP Group (LON:IPO) PLC (LSE:AWE) and Qualcomm Inc (NASDAQ:NASDAQ:QCOM, ETR:QCI).
Nasdaq 100-listed Qualcom said at the start of April that it was considering making an offer for the Canadian maker of high-speed microchips.
Today, having already extended the ’put up or shut up’ deadline to 12 May and 27 May, says the two companies "remain engaged in discussions in respect of a possible offer" and so the date has been set for 2 June now.
7.52am: One in for Saatchi and one out for Elementis
A couple of deals now.
M&C Saatchi PLC (AIM:SAA) has struck a deal to buy a UAE-based sports agency that it says will "bolt on" to its existing business in Dubai and Abu Dhabi.
Dune 23 Sport & Entertainment currently has a client roster including Emirates Dubai 7s rugby festival, Mubadala Abu Dhabi Open women’s tennis tournament, Chicago Bulls, LIWA Festival, Zayed Sports City, All Things Live, Dubai Watch Week, Longines Global Champions Tour, Nada Dairy, BRED by Hypebeast and SailGP.
"Dune 23 brings specialist expertise, a proven track record, and a team uniquely attuned to creating lasting impact through passion and fandom," the UK ad agency says, with its expansion into the Middle East "driven by increasing demand from clients and growth opportunities".
And Elementis plc (LSE:ELM) has completed the sale of its talc business to IMI (LON:IMI) Fabi for net cash proceeds after transaction costs of roughly $55 million (almost £41 million).
The chemicals group launched a strategic review of the business last August and the board is said to see the sale as representing "the best outcome for all stakeholders".
As well as representing another "milestone" in the group’s refocusing as a specialist provider of additives for the high-margin coatings and personal care markets, the disposal also improves its profit margin.
The plan is to return $50 million to shareholders by way of a share buyback.
7.31am: Whitbread (LON:WTB) chair steps down after seven years
Whitbread PLC (LSE:WTB) chairman Adam Crozier, a well-known figure in the City and around the UK from former roles as boss of ITV (LON:ITV), Royal Mail (LON:IDSI) and the Football Association, is stepping down from the hotel company.
He will leave at the start of September after seven years in the role, with former Capgemini boss and current Severn Trent (LON:SVT) chair Christine Hodgson taking his seat.
Crozier joined Whitbread in 2017 and oversaw the sale of its Costa Coffee chain for £3.9 billion to become wholly focused on its budget hotels and gastropubs.
7.24am: Market showing evidence of ’fear fatigue’
This week is half-term in the UK, so activity could be a bit slower, says Jim Reid at Deutsche Bank (ETR:DBKGn).
This "could have been a problem if we were still facing the June 1st 50% tariff deadline for the EU," he adds, "but yet again we saw a deadline delay over the weekend back to the original July 9th date after a positive call between Trump and EC President von der Leyen."
This saw the Stoxx 600 jump 1% to make up for Friday’s 0.9% fall, but Reid says the size of Friday’s fall "showed that markets are getting more accustomed to Trump’s threats and now partly assume the full threat won’t immediately materialise".
"There is certainly fear fatigue."
He notes that the dollar hasn’t rallied since the news on Friday and has instead edged lower.
"Investors are seemingly of the view that continued aggressive tariff headlines chip away at investors desire to hold US assets," he adds, noting that 10yr European bond markets rallied a couple of basis points yesterday while 30yr yields were 2-5bps lower.
7.15am: FTSE 100 called slightly higher
The FTSE 100 has been called higher as it begins its week on Tuesday morning after a long weekend, potentially playing catch-up with gains seen in Europe the previous day.
On the futures market the London index is anticipating a gain of six points, having ended last week on a down note following a threat by US President Donald Trump to hit the European Union with a 50% tariff from 1 June.
However, yesterday the White House announced it will delay the introduction of a 50% tariff on all EU imports until July 9 to allow time for trade negotiations.
Following a phone call between Trump and EU Commission President Ursula von der Leyen, who requested more time to facilitate ongoing discussions, the US President said on a social media post that he had "agreed to the extension".
Yesterday the German DAX and French CAC added 1.7% and 1.2%, while the US indices were on holiday too.
Asian markets are mainly higher this morning, with the Japan’s Nikkei up 0.4% and the Hang Seng up 0.3%, but the Shanghai Composite down 0.2%.
Announcements due on Tuesday 27 May:
Interims: Greencore Group (LON:GNC)
Overseas earnings: Auto Zone, Soitec (EPA:SOIT), Xiaomi (HK:1810)
Economic announcements: BRC Shop Price Index (UK), Business Climate Indicator (EU), Consumer Confidence (EU), Durable Goods Orders (US), House Price Index (US), Consumer Confidence (US)