- FTSE 100 rises 47 points to 8,679
- QinetiQ warns of UK delays and US defence challenges
- Life insurer Phoenix Group tops blue-chip leaderboard
4.14pm: Gains all round, apart from US big tech
London’s blue-chip index is heading to a solid gain for the start of the week.
Phoenix Group is the top riser for the day, up over 10% on the back of its results earlier. Life insurers M&G and Prudential (LON:PRU), which report later in the week, were lifted too.
Gains for oil giants Shell (LON:SHEL) and BP (LON:BP), precious metals miners Fresnillo (LON:FRES) and Endeavour, and industrial metals miners Rio Tinto (LON:RIO) and Anglo American (LON:AAL) were also helping lift the index.
Supermarkets led the fallers after Asda’s statement on Friday, with analysts speculating on how it could impact the sector.
European and US stocks indices were generally higher too, apart from the Nasdaq, which was down 0.5%, as Tesla (down 6% today and 34% in the past month) and Nvidia (NASDAQ:NVDA) (down 2.7% today and 15% over a month) led another tech sell-off.
3.53pm: Klarna will test investor appetite
Buy now, pay later fintech Klarna Group pulled the trigger on an IPO in New York last week.
Klarna announced on Friday that it has publicly filed an initial public offering registration statement with the US Securities and Exchange Commission, though has not yet confirmed the number of shares that will be offered nor the proposed price range.
Goldman Sachs (NYSE:GS), JP Morgan and Morgan Stanley (NYSE:MS) have been engaged to coordinate the fundraising, with Bank of America (NYSE:BAC), Citi, Deutsche Bank (ETR:DBKGn), SocGen and UBS acting as bookrunners, with Keefe, Bruyette & Woods, Wedbush Securities and others as co-managers.
Analyst Nalin Patel at PitchBook said the heavily anticipated IPO "arrives amid a challenging landscape for public equities, characterised by market volatility, macroeconomic uncertainty, and geopolitical tension", so will "will test investor appetite for fintech companies", especially those operating in BNPL space after increases to regulatory scrutiny and interest rate changes in recent years.
"By opting for a US listing, Klarna underscores its commitment to expanding in the US market, which now accounts for a significant portion of its revenue," said Patel.
A number of UK fintechs were thought to be eyeing a listing in recent years, though some like Revolut have ruled out London as a prospective IPO venue.
3.26pm: Dividend records
The Association of Investment Companies (AIC) has published its updated list of 20 "dividend heroes", investment trusts that have increased their annual dividends for at least 20 years in a row.
Two thirds of the trusts have increased their dividends for 30 or more consecutive years, incliding 10 that have done so for at least half a century.
City of London Investment Trust (LSE:CTY), Bankers Investment Trust PLC (LSE:LON:BNKR) and recently merged Alliance Witan PLC (LSE:ALW) have the longest records, 58 years, followed not far behind by Caledonia Investments (LSE:LON:CLDN) with 57 years.
FTSE 100-listed F&C Investment Trust PLC (LSE:FCIT), which declared a 6.1% hike in its dividend today, and The Global Smaller Companies Trust have consistently increased their dividends for 54 years, followed by Brunner Investment Trust (LSE:BUT), JPMorgan (NYSE:JPM) Claverhouse, Murray Income Trust plc (LSE:MUT) and Scottish American (51).
The newest addition to the list is Murray International Trust plc (LSE:LON:MYI), with 20 consecutive years of dividend increases, which brings the list back up to 20 trusts after last year’s merger of Alliance Trust (LON:ALWA) and Witan.
3.01pm: Air taxis story anyone?
Electric air taxis are coming to the UK through a new partnership between Virgin Atlantic and Joby Aviation Inc (NYSE:JOBY).
The deal will see the companies work together to launch zero-emission, short-range flights connecting cities and airports, starting with Heathrow and Manchester.
Virgin Atlantic will help promote the service, engage with regulators, and support landing infrastructure development.
Designed for short-haul flights, Joby’s air taxis seat four passengers and a pilot and can hit 200mph without as much noise as a helicopter, cutting the journey from Heathrow to Canary Wharf to just 8 minutes.
2.52pm: Gold tops $3K again
The price of gold has nosed back above $3,000 in the past few minutes.
It broke above here on Friday but pulled back.
Since last Tuesday, the price of the yellow metal has rallied over 4% from $2,880.
Some analysts are citing Warren Buffett’s line on the metal from a speech that he gave at Harvard in 1998: "Gold gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head."
Others, like David Morrison at Trade Nation are pointing to technical analysis runes indicating gold is "not yet as overbought as it was towards the end of February when it was trading around $2,930. That suggests that there’s still more room to the upside, but not much."
He said the test will be if gold can "really punch through" the $3,000 mark with conviction.
"If so, the healthiest scenario from the bullish perspective would be if gold could then consolidate above $3,000 for an extended period."
1.48pm: Wall Street opens higher
US stocks have opened higher, following the mixed US retail sales report.
The Dow Jones has risen 0.4%, the S&P 500 is up 0.35% and the Nasdaq 0.1%.
Headline retail sales numbers were disappointing, rising just 0.2% last month compared to an expected increase of 0.6%.
However, the control group for retail sales saw an increase of 1% last month, following a 1% decline the month before.
"The result for the control group of retail sales has a closer relationship to US GDP, so this data may go some way to assuage concerns about US growth," says Kathleen Brooks, head of research at XTB.
"The sharp decline in consumer confidence in the US, suggested that consumption could fall off a cliff, however, the real economic data is not as pessimistic, which could fuel another leg in the US stock market recovery rally, which is once again being led higher by the US tech sector.
"One piece of economic data will not be able to sustain a recovery rally in US stocks for the long term, in our view, and the recovery could remain fragile in the coming days as we lead up to some key event risks."
The latest Atlanta Fed GDP estimate will be released later on Monday, with the last estimate having seen a 2.4% plunge for GDP after the 2.3% gain in the final quarter of 2024.
Earlier, the OECD revised down its forecasts for global growth this year, also making cautious sounds about the outlook for inflation, as trade tariffs increase the cost of doing business.
US growth is expected to slow sharply to 1.6% next year, the weakest since 2011, excluding Covid.
Trump’s trade policies are expected to push Mexico into a recession, with Canadian GDP forecasts slashed in half compared to a December estimate.
The OECD now expects the UK’s economic growth to outperform the rest of the Eurozone and Canada this year and next.
12.57am: London IPO news
Quantum Base Holdings Plc has announced its intention to float on London’s AIM market next month.
The company, a spin-out from Lancaster University as a means to commercialise Professor Robert Young’s discoveries in the field of quantum physics, will be raising between £3 million and £5 million as part of its initial public offer.
It describes its products as "near unbreakable and non-replicable authenticity tags" that promise to significantly mitigate counterfeiting.
Chief executive Tom Taylor says: "We believe that floating on AIM will provide us with this independence, whilst also enabling us to leverage access to a world-leading market and potential investor base."
12.13pm: European stocks climbing, US futures down
As we move into the afternoon, European markets are stepping higher, while US stock futures are pointing to a decline.
The FTSE 100 index is up 15 points or 0.2%, while the FTSE 250 is a rare source of red, but only down 0.1% due to QinetiQ mainly.
In Germany, the DAX is up 0.2% and in France the CAC 40 is up 0.3%, with Spain and Italian indices still in green.
The Euro Stoxx 600 is up 0.4%, with London names leading the risers (Phoenix Group) and the fallers (QinetiQ).
"European markets are making tentative strides towards the upside," says Joshua Mahony at Scope Markets, following the "welcome" rebound in global equity markets at the end of last week.
"Despite the threat of 200% tariffs on European alcohol, there is still a case of realignment as the overwhelming risk around the US economy sees flows into Asian and European equities."
He observes that the Footsie has enjoyed a boost from the oil & gas sector, with both crude and natural gas pushing higher in the wake of Chinese stimulus pledges and the US offensive in Yemen.
"Trump’s attack on the Houthi rebels in Yemen highlights his desire to get global supply chains back onto a more efficient footing, with ships having sailed the longer route around South Africa since the attacks started in November 2023."
Brent crude has climbed above $71 a barrel, having been pushing towards near three-year lows in the past week.
Another market analyst, Neil Wilson at TipRanks, highlights the quote from German Chancellor-in-waiting Friedrich Merz that "Germany is back."
Wilson says this is signalling a "correction of past mistakes" and "feels like a fork in the road of history".
Merz has secured the backing of the Greens to push through constitutional reform of Germany’s debt-brake, which limits how much governments can spend, with the Greens’ quid pro quo being that €100 billion of the €500 billion defence-and-infrastructure package is allocated for climate and economic transformation
"It’s a big win and necessary to get done quickly before the new parliament sits," says Wilson.
11.46am: US recession concern is ’misplaced’
Concerns that the US economy may descend into recession "are misplaced", according to economists at Berenberg.
"President Donald Trump‘s trade wars and his erratic policy U-turns may well dent sentiment and spending modestly in coming months. However, economic fundamentals suggest that the economy will remain resilient," writes economist Atakan Bakiskan.
He points out that in the last two years, similar recession scares "have turned out to be false alarms" and sees consumer and corporate balance sheets as "healthy" and fiscal policy as "still expansionary", meaning the economy can continue to grow above its 2% trend rate in 2025, with the labour market remaining healthy despite slower employment growth.
A major reversal in the equity market may eventually weigh on consumer spending, "this will not happen immediately" as the reaction of spending to changes in wealth operates with a lag.
"For this year, the major gains in wealth in the last two years will likely shape consumer spending more than the current correction."
Bakiskan admits there are risks to this call, especially if elevated uncertainty persists throughout the year, the equity market continues to decline, and Trump becomes more aggressive with tariffs while trading partners retaliate.
"Even in such a case, a recession would remain unlikely against the backdrop of healthy consumer and corporate balance sheets."
11.22am: QinetiQ hit by US spending squeeze
QinetiQ Group PLC (LSE:QQ.) shares are down almost 22% now, with others in the sector lile Chemring (LON:CHG) down 2.6%, Melrose (LON:MRON) down 2.1%, Cohort sliding 1.6% and BAE Systems (LON:BAES) now flat.
Analyst Jamie Murray at Shore Capital says today’s trading update equates to around a 15% downgrade versus his expectations.
"This has been driven by delays in short cycle work across UK Intelligence and US Sectors, which we believe is a direct consequence of the SDR review in the UK and the Trump Administration’s proposed defence cuts in the US."
Growth guidance for the new financial year has also been downgraded to 3-5% revenue growth at 11-12% margins, which the analyst says equates to a circa-8% downgrade to his EBIT forecasts.
"That said, the group has extended its share buyback programme by £200 million over the next two years. This illustrates that the group remains confident over the medium term, despite the near term volatility."
Murray said he is putting his recommendation on the shares under review.
10.52am: Crispin Odey fined and banned by FCA
The UK financial watchdog says it has decided has fined Crispin Odey £1.8 million and banned him from the UK financial services industry.
Odey "deliberately sought to frustrate" the disciplinary processes by his majority owned Odey Asset Management (OAM) into allegations of sexual harassment "to protect his own interests", the Financial Conduct Authority said.
The FCA said Odey "showed reckless disregard for OAM’s governance, causing OAM to breach certain regulatory requirements"... and considers his conduct "demonstrated that he is not a fit and proper person to perform any function related to regulated activities".
Odey has referred the decision to the high court, so these findings are provisional.
The regulator said Odey used his majority stake in OAM to remove the existing members of its executive committee weeks before he was due to appear for a disciplinary hearing in January 2022. Having appointed himself the exco’s sole member, he decided the disciplinary hearing into his conduct would be indefinitely postponed since he said he was unable to conduct it with impartiality, the FCA explains, before appointing new members to the exco, then disbanding it again after a disagreement and eventually apoointing members who held a disciplinary hearing in late 2022.
Odey has denied the allegations and is suing the FT for libel.
10.31am: Analysts weigh in on Asda impact on grocery market
ASDA’s promise to invest in price and store standards in 2025 led to a rout in Tesco (LON:TSCO), Sainsbury and to a lesser extent MKS (LON:MKS) on Friday and these stocks are still falling this morning.
"Clearly, market conditions are changing rapidly," says analyst Frederick Wild at Jefferies.
He says "it remains far from clear whether ASDA has the ability to commit to the scale of cuts outlined on Friday if volume growth does not improve measurably in the coming weeks and months. Until this evidence arrives, we expect sector valuations to remain pressured."
Clive Black at Shore Capital says: "Asda’s market share seepage has been a key feature UK grocery retailing this decade, but its duration becomes more, not less, worrying to us as the necessary steps to stabilise become costlier."
He salutes a "definitive management change", with industry heavyweight Allan Leighton - ’Big Al’ - brought in as "a clear and necessary indication of intent to invest in the price and proposition".
On what the impact will be, Black says equity markets are displaying some nervousness on the shares of listed UK grocers, which is an "understandable" knee-jerk.
From a direct commercial impact in terms of store adjacencies and customer switching, Black said mostly this would hit the likes of B&M European Value Retail SA (LSE:BME), Iceland and Morrisons and "because of its scale, Tesco may notice some ripples too".
"Whilst no one is immune to the chess moves of others, Marks & Spencer, Sainsbury’s (LON:SBRY), and Waitrose would singularly appear less exposed we contend, as would Aldi and Lidl with their stronger private label assortments."
Citi has also estimated how much Tesco and Sainsbo’s could lose in terms of earnings and cashflow if they react or don’t.
9.29am: Markets mixed, China provides boost
The FTSE 100 is searching for direction this morning, currently up 13 points or 0.15% but having dipped below the waterline twice in the first hour and a half of trading.
Mid-caps are lower, with the FTSE 250 down 52 points or 0.3%.
In Europe, the DAC and CAC are both just below flat, while Spain’s and Italy’s benchmarks are both up around 0.2%.
"Markets are in choppy waters at the start of a week dominated by central bank decisions, as investors navigate risky trade currents and geopolitical uncertainty," says market analyst Susannah Streeter at Hargreaves Lansdown (LON:HRGV).
"Hopes that a new consumer life raft in China will buoy up the country’s prospects of recovery have helped lift sentiment slightly, but caution remains."
China announced new stimulus measures – a "special action plan for boosting consumption" – that it expects will "vigorously" boost consumption and "expand domestic demand in all directions".
The plan is focused on raising incomes, stabilising the real estate and stock markets and improving the social safety net, though few details were provided with the announcement.
Streeter notes that it also trying to shift habits away from a squirrel-like savings culture by offering more support to pensioners and students, to try and encourage more spending.
Chinese retail sales data was also released, showing a 4.0% year-over-year increase in January and February after climbing 3.7% in December. Consensus was 3.7%.
On gold, Streeter notes that the yellow metal is hovering near fresh records as geopolitical tensions and trade concerns keep up demand for the safe-haven asset, with news including US strikes continuing against Yemen’s Houthi’s, who have been accused of attacking ships in the Red Sea.
"Concerns that the prospects for a ceasefire in Ukraine has diminished have also added to uncertainty."
9.06am: Gold flat this morning, but UBS says it can go higher
After the gold price notched a new record high above $3,000 per ounce at the end of last week, the price is trundling sideways at just under $2,900 this morning.
The metal has gained 14% in the year to-date, following a 27% gain in 2024, and UBS reckons it can go higher.
"With the price now reaching our long-held target of USD 3,000/oz, the main question is whether the rally will continue," says UBS strategist Wayne Gordon.
"We think so," he says in a note this morning, "as long as policy risks and an intensifying trade conflict continues to spur safe-haven demand."
8.53am: Mike Ashley
Mike Ashley has been appointed to the board at circular economy e-commerce group Huddled Group PLC (AIM:HUD).
He is an "accomplished leader with extensive experience" in the retail sector, yes yes we know this.
But it turns out that there are two Mike Ashleys in the UK retail sector and this is not the one who founded Sports Direct (LON:FRAS) and still has a strong controlling hand at Frasers Group PLC (LSE:FRAS) despite no longer being CEO.
This Mike Ashley was chief commercial officer at Holland & Barrett and has held management roles at Boots, Argos, Dixons Retail Group, Travis Perkins (LON:TPK), Holland & Barrett, and Magnet Kitchens.
You might have thought he would go for Mick or Michael, but no.
8.37am: UK online safety act threatens big fines
From today, tech giants such as Facebook (NASDAQ:META) and Instagram owner Meta, YouTube owner Alphabet (NASDAQ:GOOGL) and X face fines of 10% of worldwide revenue if they fail to crack down on illegal content in the UK under new digital safety laws.
The Online Safety Act requires firms to remove or block harmful material, including fraud, terrorism, and child sexual abuse content.
From today, companies must also tackle suicide encouragement, drug sales, and extreme pornography or risk big fines. In extreme cases, services could be taken down.
8.15am: FTSE 100 opens higher, QinetiQ plunges
The FTSE 100 trotted off to a 20-point gain to begin the day but has already seen this whittled back to just two points at 8,634.
Phoenix Group Holdings PLC (LSE:LON:PHNX), the life insurer, is top of the early leaderboard, up 6.2% after it reported better-than-expected cash results, with a solid solvency position and an improved outlook.
Airlines and insurers are next, including British Airways (LON:ICAG) owner IAG, easyJet (LON:EZJ), Beazley (LON:BEZG) and Legal & General.
Fallers are led by Tesco, down 4.1%, Marks & Spencer and Sainsbury’s.
BAE Systems is down 1.1% as QinetiQ plunges 15% on the FTSE 250 following its profit warning.
7.57am: Housing market logjam
Monthly housing data from Rightmove (LON:RMV) shows the highest number of houses on the market in a decade for any buyers who miss the upcoming deadline for the stamp duty tax break expires at the end of this month.
The average price of property coming to market for sale rose 1.1% this month to £371,870, in line with the long-term March average.
A "massive log-jam" of 575,000 moves are currently in the legal completion process, with sellers trying to beat the stamp duty deadline.
7.45am: Qinetiq (LON:QQ) warning
Defence technology supplier QinetiQ Group PLC (LSE:QQ.) has warned that its full-year results will be hit by a £140 million write-down due to restructuring and "challenging" conditions in the US market.
The FTSE 250-listed group said it has also experienced delays to contract awards from the UK Ministry of Defence in the intelligence sector, which represents around 25% of group revenue.
On the plus side, QinetiQ talked up its long-term potential as a supplier to the UK, US, Australia and other NATO allies, and announced an extension to its share buyback programme of up to £200 million over the next two years.
7.33am: $1bn deal for AstraZeneca
AstraZeneca PLC (LSE:LON:AZN) has topped up its innovative cancer treatment toolkit with a deal to pay up to $1 billion to buy EsoBiotec, a Belgian company that has made clinical breakthroughs in cell therapy, where immune cells are engineered directly within the patient’s body.
The FTSE 100 pharma giant will pay $425 million when the deal closes, which is expected before June, plus up to a further $575 million based on development and regulatory milestones.
Compared to traditional cell therapies, which require cells to be removed from a patient and modified outside the body before being readministered to the patient as a medicine some weeks later, the Anglo-Swedish group said EsoBiotec’s technique involves engineering immune cells directly within the patient’s body, speeding up and simplifying the process.
"EsoBiotec will accelerate and expand the impact of our recent investments and marks a major step forward in realising our ambition to harness the full potential of cell therapy," said AstraZeneca’s executive vice president for oncology haematology R&D, Susan Galbraith.
7.16am: FTSE 100 set for positive start in BoE meeting week
A positive start for the FTSE 100 is predicted on Monday, continuing the upwards momentum from the end of last week.
On the futures market, the London benchmark is trading 7 points higher, having finished last Friday at 8,6323.3, losing just under 48 points over the past five days.
It was a similar story for US markets last week, closing with a strong session but losing ground over the five days.
This week brings meetings for the Bank of England, Federal Reserve and Bank of Japan, amongst others, plus a host of company updates and results, including QinetiQ today.
Asian stock markets are pointing upwards this morning ahead of the European session, led by the Hang Seng and Nikkei, up 1% and 0.9% respectively.
Monday 17 March
Announcements due:
Interims: Beeks Financial Cloud Group PLC, Eagle Eye Solutions Group PLC
Finals: Alpha Group International PLC, BATM Advanced Communications, Diversified Energy Company PLC (LON:DEC), Marshalls PLC (LON:MSLH), SigmaRoc PLC
US earnings: Science Applications International Corporation
AGMs: Hercules Site Services PLC (LON:HERC), Schroder European Real Estate Investment Trust PLC
Economic news: Industrial Production (China), Retail Sales (China), Retail Sales (US)