FTSE 100 Live: Tesco sales up 8.8% as Travis Perkins warns on profit, Japan holds rates
Today in the City, important events include updates on Tesco's sales and a warning about reduced profits from Travis Perkins.
The FTSE 100 index has increased as the markets in the United States continued to perform well last night due to the belief that interest rates have almost reached their maximum limit.
Unlike other countries, Japan has continued to follow an ultra-loose monetary policy. This is evident from its decision to keep its short-term interest rate at -0.1%.
Tesco Shares Drop, FTSE 100 Up, ASOS Leads FTSE 250
It is currently 8:42 AM according to Graeme Evans.
The FTSE 100 index has improved by 31.11 points to reach 7659.37, thanks to a positive influence from both Asia and Wall Street. This continues the momentum from a 25 point increase from yesterday.
The owner of Sports Direct, Frasers Group, experienced a 2% increase in their stock value, causing them to become the top performer in the stock market. Their stock rose by 15.5p, ultimately reaching 699.5p. Persimmon was another company that received support from investors, causing a 22p lift in their stock value to 1204p. However, other companies in the housing development industry, such as Barratt Developments, experienced a decrease in their stock value during this session.
Shares in Tesco dropped by 2.2p and reached 262.3p, even though the company stated that it is expected to achieve its full-year profit guidance. Tesco's sales in the UK and Ireland increased by 8.8% in the 13 weeks leading up to 27th May and this was reflected in the trading update.
Kingfisher, the company that owns B&Q, also suffered a 1% drop in their stock. Specifically, their stocks fell by 2.2p to 233.8p. This decline followed a profit warning from Travis Perskins, whose shares plummeted 6% or 55p to 811.8p in the FTSE 250 index.
The secondary stock market that primarily focuses on the UK experienced an uptick of 47.73 points and landed at 19,087.14. This was attributed to the prominent presence of the fast fashion brand, ASOS, which surged yet again by 6% or 22.6p, reaching 399p.
At 8:41, Daniel O'Boyle wrote a blog section.
Stocks began the day with a small increase, but the rates for government bonds are still on the rise.
Have a glance at our entire market summary.
"Chances Of City's 6% Interest Rates Are High"
At 8:15 am, Daniel O'Boyle wrote this piece.
Traders who work in the city envision a higher probability of 6% interest rates, as gilts with a shorter term of maturity increased even further to reach a 15-year high.
Investors are predicting higher interest rates, causing two-year gilts to yield 4.92%, which is the highest amount seen since 2008. In addition, three-year and five-year gilts are at their highest rates in 15 years.
Exchange markets indicate that there is a more than 50% probability of interest rates reaching 6% in the beginning of next year. This would be the Bank of England's highest rate since the year 2000.
"Japan Maintains -0.1% Interest Rate, Tokyo Stocks Up"
At 08:01, Graeme Evans wrote a blog post.
The monetary policy of Japan stands in stark contrast to the rest of the world, as its central bank has recently decided to keep its short-term interest rate target at negative 0.1%.
The Bank of Japan has decided to maintain its current strategy even though core inflation has increased to 4.1%, the highest it has been since the 1980s, due to a prolonged struggle against deflation.
Leaders in charge of creating policies are of the opinion that the rise of prices in the market will gradually subside towards the end of the current year. Consequently, they have decided to uphold the actions taken to boost Japan's economic resurgence.
The yen lost strength following the meetings of the Federal Reserve and European Central Bank this week, as they both adopted a notably dovish approach, leading many to anticipate more increases in rates.
The stocks in Japan are getting a boost from the monetary policies being implemented, serving as a positive force for the market. The Nikkei 225 in Tokyo saw another increase of 0.7%, ending at its highest level in more than thirty years.
Travis Perkins Warns Of Profit Drop From High Interest Rates Affecting Housing Market
It's currently 7:56 in the morning, stated by Michael Hunter.
Travis Perkins, a supplier of building materials, has released a statement today declaring that their profits may be negatively impacted due to the current higher interest rates. The housing market has been affected by this and there has been a decrease in demand for products from those who are renovating their homes.
The corporation predicted that it would earn £240 million, which is a decrease from the previous year's £295 million. It also mentioned that the anticipated improvement in the housing market during the second quarter had not occurred.
According to Travis, the market for newly built and renovated homes is still feeling the effects of high interest rates and a decline in consumer confidence due to the unexpected and consistently high increase in consumer prices.
Peel Hunt Reports Annual Loss In Tough Year With Disastrous Mini-Budget
It is currently 07:39 as stated by Michael Hunter.
The investment bank and stockbroker Peel Hunt based in the city announced a significant decrease in their yearly earnings by more than one-third and shifted towards a loss. Their banking profits dwindled down to 60%.
During the year ending in March, the market experienced a significant level of chaos, according to the report. As a result, the company incurred an overall loss of £1.5 million, compared to a profit of over £41 million in the previous year. Revenue declined by more than 37%, from £131 million to £82.3 million. As a consequence, no annual dividend will be paid for this year.
According to Steven Fine, who is the head of the company, the financial services industry has faced many difficulties in the past year. These problems have had a noticeable effect on market activity and how investors feel about the industry as a whole. This has been reflected in our financial results for the year 2023.
Peel Hunt made reference to various domestic and international "economic and geopolitical events" in the broader statement accompanying its figures.
Interest rates in Europe are rapidly increasing due to both the conflict on the continent and the negative economic effects of the UK Government's recent mini-budget. These higher rates, currently at their highest level in 14 years, have contributed to a decline in investor confidence and market activity in the UK. Additionally, major bank failures in recent years have also had a significant impact on the financial landscape.
The article mentioned that the UK stock market had a tough year, with very few trades being made. This was particularly true for companies that were just starting to trade on the market. As a result, Peel Hunt, who offers investment banking services, experienced a significant drop in revenue. Their investment banking revenues went from £57.9 million last year to £23.4 million this year. Additionally, the number of deals that Peel Hunt worked on fell from 46 to 27.
Fine, the CEO, declared that they are optimistic about being prepared and in an advantageous position to take advantage of the market when it returns to its usual level of activity.
Asia And Wall Street Markets Rise; FTSE 100 Holds Gains
At 7:21 am, Graeme Evans wrote this blog post.
Yesterday's upward push by the US markets persisted with the S&P 500 index gaining an additional 1.2%, marking its sixth consecutive session in which it finished positively.
The standard reached a record high above 4400 for the initial occasion since April 2022, whereas the Nasdaq Composite which focuses on technology kept its momentum by rising 1.1%.
The profits came after the weekly numbers on jobless claims in the US were better than anticipated, which made people believe that the Federal Reserve won't proceed with the two extra rate increases discussed during its meeting on Wednesday.
Despite the European Central Bank's release of inflation projections that were greater than anticipated and an additional 0.25% increase in interest rates, there was still a noteworthy surge in the Wall Street market.
During a recent announcement, Christine Lagarde, who serves as the president of the European Central Bank, hinted at the possibility of a rate increase at the upcoming meeting scheduled for the following month.
Yesterday, the FTSE 100 index ended higher at 7628.26, gaining 25.52 points. CMC Markets predicts that it will increase by seven points to 7635 today. This positive development follows a strong performance by the Hang Seng in Asia, which surged by more than 1% in response to Wall Street's impressive performance.
ITV To Acquire All3Media, Creator Of Gogglebox
It's early in the morning at 7:18 am according to Michael Hunter.
Today, ITV announced that they are currently looking into the possibility of acquiring All3Media. All3Media is a large independent production company based in the UK and is responsible for popular TV programs such as Call the Midwife and Gogglebox.
The primary British broadcaster that doesn't require payment made a statement acknowledging that there is no definite assurance that any exchange will occur.
Warner Bros Discovery and Liberty Global both have ownership of All3Media, while ITV is a shareholder.
Yesterday, Reuters disclosed that a likely agreement could estimate All3Media's worth at more than £1 billion.
Currys To Sell Greek Unit Soon
At 7:17 AM, Simon Hunt wrote a blog entry.
The company Currys is considering the possibility of selling its retail division Kotsovolos, which is located in Greece.
Dixons acquired the company, which had more than 90 stores in Greece, in 2005. Later, Dixons merged with Currys.
In a written communication, the corporation expressed that the power of the Kotsovolos label, its successful history of providing profitable outcomes, and its dominant market presence are presently not accurately represented in the company's worth.
Because the economy of Greece appears strong and there are chances for growth in the future, the Board feels that it's a good moment to examine every possible choice for Kotsovolos.
The blog section is saying that Tim Goode captured an impressive photograph. This photograph was shown in a recent article. It is unknown what the article was about.
Tesco CEO Notes Inflation Starting To Decline
It's currently 7:14 AM according to Daniel O'Boyle's blog entry.
Ken Murphy, the head of Tesco, has indicated that inflation might be subsiding. The supermarket giant has projected profits of £1.4 billion to £1.8 billion for the year.
Murphy, who earned £4.4 million in the previous year, expressed that the supermarket has been the pioneer in reducing prices.
The speaker stated that they are aware that a lot of their clients are experiencing high expenses and they have taken action by reducing the prices of necessary items. They have observed an optimistic beginning of a decrease in inflation throughout the industry, and they are committed to continue working hard to provide Tesco's customers with the greatest value possible.
Revenue reached £13.8 billion, showing an increase of 8.8%. The UK market was responsible for £10.8 billion of that amount.
Yesterday's Highlights In News
At 6:48 am, Simon Hunt wrote a blog post.
Hello there! Here's a rundown of the major happenings from yesterday:
CAB payments, a fintech company based in London, has announced that it will continue with its plans to list on the London Stock Exchange (LSE), despite the recent cancellation of WE Soda's initial public offering (IPO).
Odey Asset Management, which has been embroiled in scandal, is getting ready to divide itself.
ASOS's stocks experienced a boost when the Chief Executive Officer announced specifics regarding his strategy to transform the company.
