The FTSE 100 has ended the day higher, up 0.5% or 42 points to 8,210 as it continued its recovery from last week’s slump.
Shares in BT were the clear winner among blue-chips, with the stock making further gains in late trade to finish the session up 7.6% to 140p after the telco announced a near one-quarter stake had been bought by Indian firm Bharti.
Telco rival Vodafone also rose nearly 1% after the announcement.
What to make of the BT-Bharti deal?
16:11 , Simon Hunt
Susanah Streeter, head of money and markets, Hargreaves Lansdown, said: “This is a confidence boosting move, with Bharti Global clearly confident that there is long-term untapped value in the group.
“It clearly sees great potential in Openreach, which is responsible for maintaining and building out the new fibre networks. It hopes to reach 25mn premises by 2026 and looks well on track to do that.
“It’s also likely to have been encouraged by indications that the cost of building 5G infrastructure may have peaked, and once new customers are moved over to the new networks, there is the potential for lower running costs.”
HSBC pledges no more branch closures until at least 2026
15:29
HSBC has promised it will not announce any new closures of its bank branches until at least 2026, extending a commitment to face-to-face banking amid a wider cull of branches on UK high streets.
The banking group also said it was planning to spend more than ￡50 million this year on updating and improving its branch network.
The pledge means the bank must keep its 327 branches running for the next year-and-a-half, and possibly longer.
It previously committed to announcing no new closures in 2024.
Meanwhile, thousands of bank branches across the UK have been shut in recent years, leaving many towns without any local services.
US stocks made gains in the opening minutes of trade on Wall Street, as the recovery from last week’s slump continued.
The S&P 500 was up 0.24% at 5356.23 points, while the Nasdaq Composite rose 0.45% at 16820 points at the opening bell.
Shares in Nvidia rose 3%, but remain down more than 16% over the past month.
Investors are getting ready to search for recession warning signs as a flurry of fresh economic data comes in later this week, including on inflation and unemployment.
David Morrison, Senior Market Analyst at Trade Nation, said: “It feels that any number that falls outside of expectation could be the catalyst for an outsized move, in either direction.
“It is worth considering that US Treasuries remain in demand, suggesting that investors are wary of taking on too much additional exposure to equities. Bonds are also getting support from the prospect of a sharp fall in interest rates.”
NatWest joins the rate cutting stampede with 3.89% mortgage deal
13:54 , Simon Hunt
The price war in the fixed rate mortgage market gathered pace today with NatWest reducing its headline five year deal to 3.89%.
The high street lender is the latest to go “sub-4” in a rush of eye-catching cuts by leading banks and building societies.
The move by NatWest follows similar reductions by rivals such as Santander, Halifax and HSBC over recent days.
NatWest said the rate on its five year offer for borrowers with a minimum 40% deposit would be lowered by 14 basis points from 4.03% to 3.89%, with a fee ￡1,495.
The rates on most of the rest of its range are being lowered by 14 or 20 basis points.
Sir Pascal Soriot was knighted by the King at Windsor Castle (Kirsty O’Connor/PA) (PA Wire)
Burger King expansion races ahead in the UK after revenue growth
11:07 , Simon Hunt
Burger King opened another 18 stores in the UK in 2023 after posting a jump in sales.
The company reported total revenue up 30% to ￡381.8 million with like-for-like sales growth of 3%, in part thanks to bringing a number of externally-owned franchises in-house.
The company turned around an operating loss of ￡20.7 million in 2022 to a profit of ￡13.4 million in the following year.
Burger King UK CEO Alasdair Murdoch said: “Our revenue performance and improvement in operating profit reflects the strength of our brand and the continued demand for our high-quality, affordable food offering.
“Despite ongoing macro-economic challenges, we expanded our footprint.”
(HANDOUT: Burger King)
Heathrow boss warns on 'devastating' impact of ￡10 electronic permits for transit passengers
10:11 , Simon Hunt
The boss of Heathrow today said the airport has already lost 90,000 transfer passengers since the introduction of a ￡10 a head electronic permit system last year.
CEO Thomas Woldbye said the Electronic Travel Authorisation (ETA), introduced for nationals from seven countries - Qatar, Bahrain, Jordan, Kuwait, Oman, Saudi Arabia and the United Arab Emirates - who could previously travel visa free with just a passport had been “devastating” for Heathrow’s hub status.
Passengers from those countries are obliged to obtain and pay for an ETA even if they are simply transiting through Heathrow and do not pass the UK border.
It is due to be rolled out to visitors from other countries, including the EU and US, later this year.
Heathrow airport said a record 39.8 million passengers travelled through its terminals in the first half of the year (Steve Parsons/PA) (PA Archive)
US economy stays on investors' radar as market recovery holds in broad rebound for FTSE 100
09:16 , Michael Hunter
The bulk of the FTSE 100 is making gains this morning, as investors continue to buy back into stocks after the sharp sell-off earlier in the summer opened the way for bargain hunting.
There are only a handful of stocks falling on the top-tier index – and only one blue-chip constituent, JD Sports, is down by over 0.5% – as the improving mood brings with it a broad rebound.
The main UK index is up over 40 points at 8,210.56, leaving it heading up from the low-point of 8,008.23 it hit during the sell off.
Its nadir was reached when weak-looking US jobs data stoked fears of a potential recession in the US, amid concern that an interest rate cut could be over due in the world’s biggest economy.
This week brings a series of inflation data around the world, including in the US. It will test the improving mood, playing into assessments of whether the Federal Reserve has room to cut rates after its long, hard fight to tame inflation with higher borrowing costs.
Richard Hunter, head markets at Interactive Investor, said more recent US jobs data raised hopes that the numbers that spooked markets “could have been an anomaly”, but also pointed out there could be further worries ahead:
“The volatility could easily reignite, especially set against the seasonal lack of liquidity which can exacerbate market movements. This week sees the release of retail sales and consumer prices in the US, with the latter estimated to have risen by 0.2% at both core and headline level, annualising to 3.2% for the core reading.
“Retail sales meanwhile are expected to have added 0.8% after a weaker June, which would point to some resilience within the pivotal consumer sector. Further colour will be added on this front with the latest reports from the likes of Walmart and Home Depot, although otherwise the reporting season is beginning to wind down.”
JD Sports makes the biggest fall on the FTSE 100 after broker cuts rating on the stock
08:44 , Michael Hunter
Shares in high street leisure and sportswear retailer JD Sports are making the biggest fall of the morning on the FTSE 100, after a broker downgrade for the stock.
It fell by 3%, or over 3p, to 122p after Deutsche Bank slapped a “sell” rating on the shares, down from “hold”. They also trimmed their price target to 110p from 115p.
The analysis said spending in the category looked “subdued”.
JD has moved into US markets with a high-profile acquisition earlier this year, when it paid $1 billion ($878 million) for Hibbett, a sportswear firm based in Birmingham, Alabama.
BT shares rally on back of Mittal deal
08:27 , Simon Hunt
BT shares haven risen as much as 6.4% to 139p in the opening minutes of trade in London on the back of news an investment firm owned by Indian billionaire Sunil Mittal is to acquire a 24.5% stake in the telco.
That makes BT the top riser on the FTSE 100 this morning, helping lift the index.
FTSE 100 up almost 40 points in opening trade
08:20
The recovery from this summer’s sharp summer sell-off on stock markets is continuing in opening trade, with the UK’s main share index up by around 40 points in opening trade.
London’s FTSE 100 rose 0.5% to 8209.40 in initial trade, a gain of almost 42 points. The second-tier FTSE 250 was up almost 120 points to 20625.18, a rise of 0.6%.
As the improving mood took deeper hold, fashion house Burberry Group made the best single gain in early trade. Its shares were up 1.6% to 696p, helping it rebound from lows seen earlier in the summer when it revealed sales fell by over a fifth.
Further signs of hope of a rebound in the house market helped cement gains for the sector. They came after landscape products group Marshalls added is voice to the consensus that an improvement was on the way in the second half of the year, with interest rates heading down from 16-year highs.
Rightmove, the online property portal that is often provides the way into home markets for house hunters, added 1.6% to 546p. Persimmon, the developer, was up 1.2% to 1595p.
Shares in Marshalls itself were under pressure, down 2.4% to 332p, with its own outlook sounding more muted than some other recent statements on the sector. The firm said it was “cautiously optimistic of a modest improvement”. It also said it was reviewing its strategy.
Landscape products group Marshalls points to improving building markets
07:30 , Michael Hunter
Marshalls, the building and landscape products firm has reported a drop of a fifth in half-year profit due in part to the decline in activity in the house market, but became the latest big name in the industry to produce a rebound.
Adjusted profit before tax for the six months to the end of June fell 20% to ￡26.6 million from revenue of ￡306.7 million, down 13%.
The ￡857million firm’s CEO, Matt Pullen, hailed it as “a resilient performance in weak end markets”, adding:
“We remain cautiously optimistic of a modest improvement in the group's end markets during the second half of the year predicated on a progressive improvement in the macro-economic environment.”
The company said is stone and aggregates have been so widely supplied to London, they have reached every location on the Monopoly board. The landmark came in 1990 when it supplied stone to Islington.
It also said today its annual performance would meet expectations.
Sunil Mittal-owned Bharti to acquire 25% BT stake
07:27 , Simon Hunt
An investment firm owned by Indian billionaire Sunil Mittal is to acquire a 25% stake in BT.
Bharti Global, which has interests in telecoms, digital infrastructure and space communications, is to acquire the stake from French billionaire Patrick Drahi’s Altice.
Bharti has reached an agreement with Altice UK to acquire c.9.99% stake of BT's issued capital, with the balance c.14.51% to be acquired following regulatory clearance. Bharti is also applying voluntarily for UK National Security and Investment Act clearance. Sunil Mittal said: "This investment demonstrates the confidence we have in BT and in the UK. BT has a strong portfolio of market leading brands, high-quality assets and an experienced management team with a compelling strategy mandated by the BT Board to deliver value over the long term, which we fully support.”
BT previously owned a 21% stake along with two board seats in Bharti Airtel Limited from 1997 to 2001. But the firm today added it had no intention to make an offer to acquire the entire company.
BT CEO Allison Kirkby said: "We welcome investors who recognise the long-term value of our business, and this scale of investment from Bharti Global is a great vote of confidence in the future of BT Group and our strategy.”
(BT/PA) (PA Media)
FTSE 100 set to rise after Asian rebound continues
07:13 , Michael Hunter
London’s FTSE 100 is on course to make progress in opening trade, after the rebound on global stock markets kept Asian markets positive.
Futures trade expects London’s main index to rise by around 30 points at the start of full business at 8.00 am.
It would leave the index heading away from the turmoil earlier in the month, sparked by fears of a recession in the US which now look overstated.
The improving mood faces a test this week from a run of inflation data due around the world, including in Europe and the US itself.
The UK’s consumer price index is due on Wednesday and is expected to come in at 2.3%, slightly higher than the 2% last time around, which was bang on the Bank of England’s 2% target.
Investors will scrutinise the data for insight into the outlook for interest rate cuts from the Bank of England. Policymakers took the base cost of borrowing down by a quarter-point to 5.25% at their last meeting in August. It ended a 16-year high for interest rates and was the first cut since the pandemic.
There are hopes in the City that more action could take rates to 4.75% by the end of the year, which could boost spending power and stoke economic growth.
Recap: Friday's top headlines
06:51 , Simon Hunt
Good morning from the Standard City desk.
Here’s a summary of our top headlines from Friday: