Proactive Investors -
- Blue chips up 17 points to 8,116
- Inflation climbs to 2.3%
- Sage Group (LON:SGE) rallies
10.26am: Trump trade sends Bitcoin close to $94,000
Bitcoin came close to surpassing $94,000 for the first time ever in late-Tuesday exchanges.
The world’s largest cryptocurrency peaked at a new all-time high of $93,905 before a bout of profit taking sent it back to a flat $93,000 at the time of writing.
Bitcoin has been remarkably well bid since president-elect Donald Trump’s overwhelming victory over Kamala Harris in the US presidential elections.
Trump has pledged to promote pro-crypto policies and create a bitcoin reserve.
The BTC/USD pair is now up more than 120% year to date.
9.45am: Rent prices soar again
The UK saw significant growth in rental prices alongside a more moderate increase in house prices, per the latest data from the Office of National Statistics.
In the 12 months to October, UK private rents increased by 8.7%, with the average monthly rent in Great Britain reaching £1,307.
London led the regional increases with a 10.4% rise, while the lowest growth rate was in Yorkshire and the Humber at 5.9%.
UK house prices, meanwhile, saw an annual increase of 2.9% in the 12 months to September 2024, reaching an average of £292,000.
England recorded a 2.5% rise to £309,000, while Wales saw a smaller increase of 0.4% to £217,000. Scotland experienced a 5.7% increase, pushing prices to £198,000, and Northern Ireland house prices rose by 6.2% to £191,000.
9.34am: Housebuilder Vistry flops to 12-month low
Housebuilder Vistry Group (LON:VTYV) PLC (LSE:VTY) flopped to a 12-month low after a board rejig spooked investors in the FTSE 100-listed group.
Vistry announced that its chief operating officer Earl Sibley will get his P45 at the end of the year, after almost a decade with the business.
His departure follows a profit warning earlier in the year due to cost overruns.
"Earl has been an integral part of our operational and executive team and his leadership and contribution have been significant in helping to establish Vistry as a leading housebuilding and partnerships business," said executive chair Greg Fitzgerald.
Shares are currently down 3.9% from yesterday’s close and nearly 30% year to date.
9.09am: The morning so far
Inflation was the point of focus this morning after the consumer price index (CPI) for October came in at 2.3%, marking a sharp shift upwards from September’s 1.7% print.
This was mainly thanks to an increase in the Ofgem energy price cap, resulting in electricity and gas prices going up.
Monica George Michail, associate economist at the National Institute of Economic and Social Research, stated: “While we think the Bank of England will continue to cut rates in 2025, the pace of rate cuts is expected to be slower than previously anticipated, and rates may stay elevated for longer.
On the company news front, Sage Group plc shares rocketed up 17% following its full-year results.
The accounting software group reported improving profit margins and a £400 million share buyback, with chief executive Steve Hare stating: "Sage has delivered another successful year, achieving strong, broad-based revenue growth together with significantly higher profits and cash flows.
“We also invested further in our products and continued to execute well against our strategic priorities."
FTSE 100-listed water firm Severn Trent PLC (LSE:LON:SVT) saw a huge swing in interim profits while warning about missing certain environmental targets.
The group said it is expected to fail the compliance risk index (CRI), which measures water quality, this year. Shares shot up 4.2%.
British Land Company PLC (LSE:LON:BLND) fell around 3% after reporting a stable overall portfolio valuation in the first half of 2024, supported by strong performance in retail parks, which offset declines in other segments.
The FTSE 100 is currently trading 16 points higher at 8,115.
8.56am: Brace for higher inflation in 2023, warns Deutsche Bank (ETR:DBKGn)
Inflation is expected to continue pushing higher in 2025, a Deutsche Bank analyst has warned in the wake of today’s 2.3% October CPI print.
“Today’s data won’t be as encouraging for the Bank of England, who have talked up a gradual approach in dialling down restrictive policy,” said Sanjay Raja, chief UK economist at Deutsche Bank Research.
“In fact, today’s data will likely reinforce this message – allowing the MPC to take a more gradual and cautious path in cutting interest rates.
“For now, upward pressure in price momentum will rise. Administrative tax changes will push prices up for things like alcohol, tobacco, VED, air passenger duty – to name a few.”
Raja added that the hike to employer National Insurance Contributions implemented in Labour chancellor Rachel Reeves’ Budget “will almost certainly push inflation higher as retail, hospitality and leisure firms grapple with a double whammy or higher minimum wage costs and payroll tax”.
“This alone, we think, will push inflation higher by a few tenths. As a result, we expect inflation in 2025 to track higher than this year, but still return to the BoE’s target in two years’ time.”
8.42am: Sage Group soars
Sage Group plc shares have pumped 17% to 1,275p, making it easily the top FTSE 100 riser today, after the accounting software group reported improving profit margins and a £400 million share buyback.
Underlying profit (EBITDA) grew 16% to £622 million, with margin increasing by 160 basis points to 26.6%, which was ahead of forecasts.
Chief executive Steve Hare said: "Sage has delivered another successful year, achieving strong, broad-based revenue growth together with significantly higher profits and cash flows. We also invested further in our products and continued to execute well against our strategic priorities."
The buyback reflected “Sage's strong cash generation, robust financial position, and the board's confidence in Sage's future prospects", the company stated.
8.29am: Blue chips gain
The FTSE 100 opened 16 points higher at 8,115 this morning, despite trending in the red in the pre market.
Sage Group skyrocketed more than 16% after the opening bell following publication of its annual results and a new share buyback programme.
Severn Trent (NS:TREN) PLC (LSE:SVT) is the second-highest riser at 2.4% following its interim results.
British Land plc was the second-biggest faller at 2% after reporting that its portfolio valuation barely budged in the first half.
Vistry Group PLC (LSE:VTY) fell around 2.8%.
8.05am: Severn Trent profits nearly triple
FTSE 100-listed water firm Severn Trent PLC (LSE:SVT) saw a huge swing in interim profits despite acknowledging that it will miss certain water-safety performance metrics this financial year.
The group reported a near tripling of profit after tax to £141.4 million for the six months ending 30 September, up from £51.60 million a year earlier.
Severn Trent espoused its environmental credentials by way of securing a four-star Environmental Performance Assessment (EPA) status from the Environment Agency for the fifth consecutive year.
However, the group also admitted that it is expected to fail the compliance risk index (CRI) this year.
Management stated: “Whilst our performance is green on the vast majority of water ODIs (outcome delivery incentives), one exception is CRI, which we're expecting to be in penalty this year.
“This is mainly caused by our Strensham site, where we expect the introduction of our biggest ever ultraviolet disinfection scheme to deliver significant improvement.”
Severn Trent increased the interim dividend by 4.2% to 48.68p per share.
The group had a net debt position of £7.7 billion and a pension deficit of £185 million at the end of the period.
7.30am: UK inflation climbs to 2.3% in October - report
The UK’s Consumer Prices Index (CPI) increased 2.3% annually in October, surpassing the forecasted 2.2% and marking a significant rise from September’s 1.7%.
The acceleration was primarily driven by an increase in the Ofgem energy price cap, resulting in electricity prices rising by 7.7% and gas prices by 11.7%.
Recreation and culture prices, including live music and theatre tickets, experienced declines, providing a partial offset to the upward trend.
Sticky inflation is gearing up to be a major pressure point for the Labour government.
Chancellor Rachel Reeves’ tax-heavy fiscal policy, coupled with the prospect of tariffs being imposed by US president-elect Donald Trump, both threaten to push consumer prices up.
Monica George Michail, associate economist at the National Institute of Economic and Social Research, stated: “While we think the Bank of England will continue to cut rates in 2025, the pace of rate cuts is expected to be slower than previously anticipated, and rates may stay elevated for longer.
“This outlook reflects forecasted inflationary pressures stemming from the recently announced budget, in addition to heightened global uncertainty, particularly surrounding the Trump presidency".
7.13am: Inflation accelerates
The FTSE 100 is expected to open slightly lower this Wednesday, with pre-market trades hovering between 10-20 points of losses.
It will add to the 10-plus points of losses in yesterday’s mixed bag of a session, when the blue-chip index spent the majority of the day in the red before creeping higher in the closing hours.
Traders will be weighing up the impact of today’s inflation print, which came in slightly higher than expected at 2.3% against a market forecast of 2.2%.
Higher energy costs were the main culprit.
Office of National Statistics’ chief economist Grant Fitzner said: “Inflation rose this month as the increase in the energy price cap meant higher costs for gas and electricity compared with a fall at the same time last year.
“These were partially offset by falls in recreation and culture, including live music and theatre ticket prices.
“The cost of raw materials for businesses continued to fall, once again driven by lower crude oil prices.”
5am: The day ahead
Inflation, Mitchells & Butlers and Severn Trent will be in focus this side of the Atlantic before Nvidia's latest earnings later in the day.
Nvidia's update once again will be in focus as expectations for another earnings beat loom... Read more
Cost pressures as a result of the Budget will again be in view when Mitchells & Butlers updates... Read more
Severn Trent's update comes after analysts said it should benefit from draft water incentive plans... Read more
Announcements due:
Interims: James Cropper plc, Molten Ventures PLC (LON:GROW), HICL Infrastructure (LON:HICL) PLC, Rotork (LON:ROR) PLC, Softcat (LON:SCTS) PLC, Severn Trent PLC (LSE:SVT), Twentyfour Income Fund Ltd
Finals: Mitchells & Butlers PLC, Nanoco Group PLC, Sage Group PLC, Tracsis PLC
US earnings: Nio Inc, NVIDIA Corp (NASDAQ:NVDA), Palo Alto Networks Inc (NASDAQ:PANW), Snowflake Inc (NYSE:SNOW)
AGMs: CVS Group PLC (LON:CVSG), Tritax Eurobox PLC (LON:EBOX), Genus (LON:GNS) PLC, Hays (LON:HAYS) PLC, Leeds Group PLC, Made Tech Group PLC
Economic announcements: Consumer Price Index (UK), Producer Price Index (UK), Retail Price Index (UK), MBA Mortgage Applications (US), Crude Oil Inventories (US)