Proactive Investors -
- Blue-chip index up 43 points to 7,977
- Tesco (LON:TSCO) impresses with yearly results
- Direct Line (LON:DLGD)'s new CFO
9.07am: China downgraded by Fitch
Concerns over the health of China's economy have been revived after the nation had its outlooked downgraded to negative by credit rating firm Fitch.
It comes as a result of China's rising debt pile, with Fitch warning that it is likely to continue borrowing as part of plans to breathe life back into its real estate industry.
“Fiscal policy is increasingly likely to play an important role in supporting growth in the coming years which could keep debt on a steady upward trend," Fitch said.
Public debt in China has surged in recent times as part of government plans to pour money into the economy.
In recent times, the government has offered financial support to families and businesses, promising that there is more to come.
8.50am: The morning so far
Tesco PLC (LSE:TSCO) was the star of the show this morning, with the supermarket giant attributing sales volume growth across the UK and Ireland to an easing off of inflationary pressure in today’s preliminary results.
Group sales (excluding VAT and fuel) increased to £61.5 billion, marking a year-on-year growth rate of 7.4%, or 7.2% at constant currency rates.
These strong results were largely expected, but the stock managed to add 0.9% nonetheless.
Elsewhere in company news, Direct Line Group has appointed Jane Poole as the insurance firm’s new chief financial officer, replacing Neil Manser, who has been in the role for three years.
The lossmaking FTSE 250-listed insurance firm’s chief executive Danuta Gray said: “The board conducted an extensive search to secure such a high calibre appointee and I am confident that Jane Poole will be a great asset to our organisation.”
Advertising giant WPP (LON:WPP) shares were at the top of the movers list, following last night’s news of a “groundbreaking new collaboration” that uses Google’s Gemini large-language artificial intelligence model to produce advertisements for its blue-chip clients.
WPP shares added 2.5% to 770p.
Other top morning risers include Ocado Group PLC (LSE:LON:OCDO) (up 4.6%), Croda (up 4% and Burberry Group (LON:BRBY) (up 3.2%).
There’s little to watch out for on the UK macroeconomic calendar today, but US consumer prices will be closely watched later on.
“There will be growing hope that the numbers are heading south, to help guide the Federal Reserve to cut interest rates this summer,” said Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown (LON:HRGV).
At the time of writing, the FTSE 100 was trading 44 points higher at 7,979.
8.40am: Bitcoin lower, gold remains near ATH
Bitcoin (BTC) is down today, having been slapped 3.5% lower on Tuesday.
The world’s largest cryptocurrency was approaching all-time highs on Monday, but the bulls were unable to push it over the line. At the time of writing, the BTC/USD pair was swapping for $69,425.
Meanwhile, gold remains at around its ATH amid its stellar run on precious metals prices, which is helping to keep the mining stocks-heavy FTSE 100 in a strong position.
The blue-chip index is currently 46 points higher at 7,981.
8.26am: WPP shares on the move
Advertising giant WPP PLC (LSE:WPP)’s shares are in the driving seat today, adding 2.4% in opening exchanges.
Last night, the firm announced a “groundbreaking new collaboration” that uses Google’s Gemini large-language artificial intelligence model to produce advertisements for its blue-chip clients.
Integrating Google’s Gemini 1.5 Pro technology will allow teams to generate headlines, turn sketches into images and create AI-generated video, including voice narration.
The latter will be handled by WPP partner ElevenLabs. Shares were last seen at 768.6p
The FTSE 100 remains bullish this morning, adding 40 points to 7,975.
7.48am: Direct Line appoints new CFO
Direct Line Group has appointed Jane Poole as the insurance firm’s new chief financial officer, replacing Neil Manser, who has been in the role for three years.
Since 2021, Poole has been CFO for Aviva (LON:AV)'s UK and Ireland general insurance business; prior to Aviva, she held the same role at Royal & Sun Alliance’s UK & International businesses.
"The Board conducted an extensive search to secure such a high calibre appointee and I am confident that Jane Poole will be a great asset to our organisation,” Danuta Gray, chair of Direct Line Group, said of the appointment.
“At the same time, I would like to thank Neil Manser for steering the Group through what has been a challenging time and the part he has played in stabilising the business for the future."
The FTSE 250-listed company chalked up significant operating losses in the past year, forcing management to implement a £100 million cost-saving programme.
"I am delighted to be joining Direct Line Group as CFO at this important time and motivated to drive business performance to realise the significant potential ahead for the Group,” said Poole.
7.34am: Tesco reports strong sales growth
Tesco PLC (LSE:TSCO) attributed sales volume growth across the UK and Ireland to an easing off of inflationary pressure in today’s preliminary results.
Group sales (excluding VAT and fuel) increased to £61.5 billion, marking a year-on-year growth rate of 7.4%, or 7.2% at constant currency rates.
Operating profit was up 18.8% to £2.8 billion, while the dividend per share was up 11% to 12.1p.
"Inflationary pressures have lessened substantially, however we are conscious that things are still difficult for many customers, so we have worked hard to reduce prices and have now been the cheapest full-line grocer for well over a year," said chief executive Ken Murphy.
For the 2024/25 financial year, Tesco expects retail adjusted operating profit of at least £2.8 billion and total adjusted operating profit from the retained Tesco Bank business of around £80 million.
A further £1 billion share buyback programme was announced, partially funded by a special dividend from the Tesco Bank disposal.
7.07am: Blue chips to open 50 points higher
The FTSE 100 index is set to open up to 50 points higher this Wednesday, having closed eight points lower at 7,934 yesterday.
Mining stocks helped to keep the index afloat throughout the session, with Fresnillo (LON:FRES), Rio Tinto (LON:RIO) and Anglo American (JO:AGLJ) reacting well to surging commodities prices (chiefly gold’s continued rally to all-time highs.
Commodity prices will be closely tracked again today, while Tesco PLC (LSE:TSCO)’s finals will be the point of focus on the company news front.
There are no major announcements on the UK macroeconomic calendar today, though the release of the latest FOMC interest rate minutes in the US will surely garner some attention.