FTSE 100 poised to be ‘winner’ in stocks turmoil, says JP Morgan
The FTSE 100 is on track to end the week more strongly than the US as Britain’s flagship stock index becomes a safe-haven amid the turmoil on global markets.
The blue-chip index could still end the week higher - having been down as much as 3.2pc amid fears of a US recession. It is up 0.2pc today.
Meanwhile, Wall Street is still on track to suffer sharp declines this week after megacap tech stocks were hit particularly hard in the sell-off that began last Friday.
The Dow Jones Industrial Average, S&P 500 and Nasdaq Composite all fell as trading began in New York today.
The FTSE 250 is up 0.4pc today but is on track to end the week down 1.1pc - still a big recovery from falls of as much as 4.2pc compared to the previous week.
JP Morgan strategist Mislav Matejka said Britain “is a good place to be in when activity is disappointing”.
He said: “The UK has traditionally been a low beta, defensive market, which performs well on a relative basis during downturns.
“If global equities see a pullback into summer, the UK could be a relative winner.”
European shares have clawed back nearly all of their losses since the global stocks rout began amid fears of a US recession.
Matt Britzman, senior equity analyst at Hargreaves Lansdown, said: “We rarely get to say the UK’s been a benefactor of its low-tech exposure, but that’s certainly been the case this week.”
Read the latest updates below.
05:30 PM BST
Investors betting on fall in dollar
The proportion of traders who think the value of the US dollar will fall has nearly tripled in the last month as markets prepare for the Federal Reserve’s first interest rate cut.
Almost a quarter (23pc) of investors said they were expecting a drop in the dollar, up from just 8pc in July, according to a survey by the Bank of America. This was the biggest share in the year to date.
The US currency has outperformed this year but recent data showing the US economy was slowing down pushed investors to bet on imminent interest rate cuts from the Federal Reserve, which in turn has cut the dollar’s rally short.
05:07 PM BST
Global shares climb
Global shares have climbed again, recovering further from the week’s sell-off, following signals from the Federal Reserve that it would cut interest rates.
The MSCI All Country stock index jumped by 0.4pc on Friday, regaining more of the losses from earlier in the week.
In the US, the Dow Jones Industrial Average rose by 0.11pc, while the S&P 500 climbed by 0.33pc and the Nasdaq Composite increase by 0.29pc.
The upticks followed clear messages from three Federal Reserve policymakers that they felt inflation was falling sustainably enough for them to be able to cut interest rates soon.
In Europe, the STOXX index of 600 firms rose by 0.55pc, almost completely making up for the week’s falls.
04:39 PM BST
Belarusian defence companies hit with new sanctions
A series of individuals and companies in Belarus have been hit with new UK and US sanctions for breaching human rights their ongoing support of Russia’s war with Ukraine.
The UK Foreign Office on Friday sanctioned four commanding officers in penal colonies, two Belarusian machine tool manufacturers that export to the Russian military and a government-affiliated defence business.
The US also announced new sanctions on 19 individuals, 14 companies and one aircraft that it said were involved in sanctions evasion and money making for people in President Alexander Lukashenko’s inner circle.
It is exactly four years since the “deeply flawed” 2020 election when President Lukashenko claimed to have won 80pc of the vote and launched a crackdown on civil society.
04:16 PM BST
Water bottle mogul knocked off top spot in China’s rich list
Covid billionaire Colin Huang has officially become China’s richest person, overtaking the businessman Zhong Shanshan who has held the top spot since 2021.
Mr Huang has amassed a $48.6bn e-commerce fortune that now surpasses that of the Nongfu Spring bottled water company founder, making him the first tech executive to top the wealth rankings in more than three years, according to the Bloomberg Billionaires Index.
Mr Huang founded the Chinese online retail giant Pinduoduo in 2015, which boomed during the pandemic but then slumped. At the company’s peak in early 2021, Mr Huang’s net worth was $71.5bn.
But now the company’s international expansion, under the brand name of Temu, means the firm has staged a comeback, offsetting a downturn in domestic demand as China grapples with its real estate crisis.
03:31 PM BST
Handing over
After a tumultuous start to the month, I’m making like the financial markets and sloping off at the end of the week. I will leave you in the good hands of Melissa Lawford.
With European and the US indexes ending the week with a wimper, let’s have a quick look at money markets.
Traders are betting that there is a 40pc chance of the Bank of England cutting interest rates in September, while the Federal Reserve is priced in to announce a first quarter of a point cut in five years.
There is a 60pc chance that the Fed will cut borrowing costs by half a percentage point, but some analysts think markets are getting ahead of themselves:
Market pricing for the Fed has pulled back from the panic a week ago, but it's still aggressive. There's four-and-a-half 25 bp cuts priced for this year and another similar number of cuts priced for 2025. I'm an inflation dove, but I don't think we get more than 3 cuts this year. pic.twitter.com/Kg3RYha9M6
— Robin Brooks (@robin_j_brooks) August 9, 2024
03:14 PM BST
Stocks rebound runs out of steam as traders ‘lack conviction’
The stocks rebound has run out of steam at the end of a roller-coaster week for markets amid worries the US economy could tip into recession.
Wall Street’s top indices opened lower a day after rallying on unemployment data that soothed concerns the world’s largest economy was set to slump into a downturn.
The FTSE 100 was up 0.2pc, giving up gains of as much as 0.7pcm, while Europe’s other top indices pulled back in afternoon trading.
“There’s not a lot of conviction from buyers or sellers,” Briefing.com analyst Patrick O’Hare said.
Mark Haefele, chief investment officer at UBS Global Wealth Management, added:
A drop in jobless claims helped alleviate recession fears.
Markets are now eyeing upcoming (US) inflation and retail sales data, which could lead to future volatility.
02:51 PM BST
Abu Dhabi acquires minority stake in Sotheby’s
Abu Dhabi’s sovereign wealth fund has acquired a minority stake in Sotheby’s.
ADQ said the investment will help the auction house reduce its debts and support its growth plans.
Patrick Drahi, who acquired Sotheby’s in 2019, will also put in more money and remain its majority owner. The total investment amounts to about $1bn (￡785m).
Hamad Al Hammadi, deputy chief executive of ADQ, said:
We are delighted to partner with Sotheby’s, a distinguished institution with a storied heritage.
ADQ remains committed to exploring compelling investment opportunities that drive value for Abu Dhabi.
Sotheby’s chief executive Charles F Stewart added: “The additional capital and investment expertise will enable us to accelerate our strategic initiatives, expand our commitment to excellence in the art and luxury markets, and continue to innovate to better serve our clients around the world.”
02:34 PM BST
US markets slump at end of volatile week
Wall Street stocks dropped at the opening bell as jitters returned to financial markets at the end of a turbulent week.
The Dow Jones Industrial Average fell 38.4 points, or 0.1pc, at the open to 39,408.06.
The S&P 500 fell 4.7 points, or 0.1pc, at the open to 5,314.66​, while the Nasdaq Composite dropped 23.5 points, or 0.1pc, to 16,636.522.
02:14 PM BST
Bitcoin edges lower amid fresh jitters
Bitcoin edged lower amid fresh jitters in stock markets.
The world’s largest cryptocurrency rose as much as 5.3pc to briefly top $62,600, extending gains from Thursday, but was last down 1.5pc to $60,750.
The moves marked a turnaround from earlier this week when the market posted its steepest decline since the days of FTX’s collapse in 2022.
Bitcoin on Thursday posted its largest one-day gain in more than 16 months.
However, it has turned lower this afternoon as volatility in markets continues, with European indexes reducing their earlier gains.
01:59 PM BST
Wall Street expected to open lower as Canada’s employment falls
US stock markets have turned sharply lower in premarket trading as Canada published its latest employment figures.
North America’s second largest economy suffered a 2,800 decline in employment following a 1,300 drop in June.
It was much weaker than analyst estimates of a 22,500 rise. Unemployment remained flat at 6.4pc.
In premarket trading, the Dow Jones Industrial Average was down 0.2pc, the S&P 500 was down 0.3pc and the Nasdaq 100 had fallen 0.4pc.
01:47 PM BST
Gold prices rise as calm returns to markets
Gold prices have risen amid renewed hopes the US economy is not heading for a deep recession.
Bullion was up 0.4pc to more than $2,428, although it remains on course for a slight loss this week following the sell-off in financial markets.
Gold enjoyed its biggest one-day surge in three weeks on Thursday as US jobless claims figures were better than expected and reassured markets.
It had shed more than 3pc during a five-day losing streak.
Silver prices were up 0.1pc.
Thursday's bullish engulfing #silver candle points to renewed interest following the latest 19% top to bottom correction. A break above $28.17 and more importantly $28.75 are the levels that would send a technical bullish signal, so more work is needed pic.twitter.com/93oqYVL4A7
— Ole S Hansen (@Ole_S_Hansen) August 9, 2024
01:28 PM BST
Mountain Warehouse aims to open more stores amid outdoor boom
Mountain Warehouse has pledged to open more stores across the UK amid a boom in demand for outdoor clothing.
The retail chain said it has opened 20 stores over the past six months and has a “strong” pipeline of new locations, including more shops at retail parks.
It came as the company revealed it returned to a profit over the year to February 2024 after more shoppers returned to stores.
Mountain Warehouse delivered a ￡26.2m pre-tax profit for the year, jumping from a ￡1.5m loss a year earlier as it continued to be weighed down from the impact of the pandemic.
The company, which employs around 3,700 people across the UK, said this was buoyed by record sales over the year.
Revenues jumped by 4pc to ￡386m, boosted by a 7.1pc improvement from its stores.
This was aided by the opening and relocation of 28 new shops over the year, as it continued with its expansion programme.
Mark Neale, founder and chief executive officer of Mountain Warehouse, said: “Rents have got more affordable so we are now taking on new stores that we might not have previously gone for.”
01:09 PM BST
UK stocks could be ‘relative winner’ from stocks turmoil, says JP Morgan
JP Morgan strategist Mislav Matejka said Britain “is a good place to be in when activity is disappointing”.
The FTSE 100 is on track to end the week 0.1pc higher, while the recovery on Wall Street is still expected to see its main indexes in the red following the global stocks sell-off.
He said:
The UK has traditionally been a low beta, defensive market, which performs well on a relative basis during downturns.
If global equities see a pullback into summer, the UK could be a relative winner.
12:36 PM BST
FTSE 100 on track for weekly gain
After all the chaos, the FTSE 100 is on track to end the week higher after all.
Britain’s blue chip index is on course to end the week up 0.1pc - having been down as much as 3.2pc amid fears of a US recession. It is up 0.4pc today.
The FTSE 250 is up 0.8pc today but is on track to end the week down 0.8pc - still a big recovery from falls of as much as 4.2pc compared to the previous week.
12:22 PM BST
Evening Standard owner Lord Lebedev accused of closing newspaper ‘on the cheap’
The Russian-born peer who owns The Evening Standard has been accused of failing in his duty of care over plans to make scores of journalists – including women on maternity leave – redundant “on the cheap”.
Our reporter James Warrington has the details:
In a letter to Lord Evgeny Lebedev, newsroom staff at risk of redundancy hit out at “devastating” plans for 70 job cuts and said that the terms on offer were “among the worst ever seen in the industry”.
As many as six women on maternity leave are expected to lose their jobs.
Lord Lebedev is the son of a former KGB officer who received his peerage from Boris Johnson in 2020.
He has proposed to make statutory minimum redundancy payments plus ￡1,000, capped at ￡21,000.
Read what the Evening Standard journalists wrote.
11:56 AM BST
New Boeing boss eschewing Washington HQ to be based at crisis-hit plants
Boeing’s new boss Kelly Ortberg will base himself in Seattle to be closer to the aircraft assembly lines at the centre of the firm’s safety and quality control crisis.
Our transport industry editor Christopher Jasper has the latest:
Mr Ortberg said in a message to staff that the complexities of Boeing’s business are such that he needs to be located near its production processes and development programmes.
Boeing bosses have been based away from Seattle since 2001, when the company shifted its headquarters first to Chicago and then Washington DC.
Politicians and unions had suggested the relative isolation of Boeing’s leadership was partly to blame for issues surrounding the 737 Max programme, which after recovering from two fatal crashes was plunged back into crisis in January, when an Alaska Airlines plane narrowly escaped disaster after a faulty door plug blew out at 16,000 feet.
Mr Ortberg said: “I plan to be based in Seattle so that I can be close to the commercial aeroplane programmes. I’ll be visiting many of our sites and I look forward to meeting with teammates around the world.”
The CEO, plucked out of retirement to succeed Dave Calhoun, who stood down this week, said his first assignment would be to tour the factory floor at the Renton plant that assembles the Max, speaking with employees and reviewing safety and quality plans.
11:34 AM BST
Wall Street poised for gains as calm returns
US stock indexes climbed in premarket trading as Wall Street’s so-called “fear index” fell to its lowest level in a week.
Chipmaker Nvidia led the gains in megacap technology stocks in the premarket trading, with a 2.5pc advance.
Global markets have witnessed extreme turbulence this week following July’s weak jobs data that raised fears of a slowdown in the United States.
A surge in yen after Bank of Japan’s surprise rate hike also resulted in unwinding of currency carry trades but the volatility has since abated.
Wall Street’s so called “fear gauge” - the CBOE Volatility Index - declining to 23.21 points, from a high of 65.73 at the start of the week.
US stocks jumped on Thursday after jobless claims last week fell more than expected, soothing worries that the labour market was rapidly deteriorating.
Money markets see a 59pc chance that the Fed will cut interest rates in September by half a percentage point, and expect two more cuts by the end of 2024.
In premarket trading, the Dow Jones Industrial Average was up 0.1pc, the S&P 500 had gained 0.2pc and the Nasdaq 100 was up 0.3pc.
11:17 AM BST
Shein plots UK warehouse ahead of blockbuster float
The Chinese fast fashion giant Shein is preparing to open its first British warehouse in preparation for a ￡50bn listing on the London Stock Exchange.
Our business correspondent Pui-Guan Man has the latest:
The Singapore-headquartered company is seeking a large site within the Midlands’ so-called “golden logistics triangle”.
It is targeting buildings measuring between 300,000 and 400,000 sq ft, although it is understood to be open to options as large as 600,000 sq ft.
Shein has dispatched a team of representatives to the UK to visit potential warehouses in the past few months, with around 10 viewings including sites in Derby, Daventry, Coventry and Castle Donington.
These two charts show how Shein would be one of FTSE’s biggest listings.
10:57 AM BST
China appeals against ‘wrong’ EU electric car tariffs
Beijing said has filed an appeal with the World Trade Organisation over the European Union’s imposition of additional tariffs on imports of electric vehicles from China.
In July, the EU slapped extra provisional duties of up to 38pc on Chinese EVs after its executive arm concluded in an investigation that they were unfairly undermining European rivals.
A spokesman for China’s commerce ministry said: “On August 9, China appealed to the World Trade Organisation’s dispute settlement mechanism over the EU’s temporary anti-subsidy measures on EVs.”
The ministry said the appeal aimed to “safeguard the development rights and interests of the electric vehicle industry and cooperation over the global green transformation”.
It said:
The EU’s preliminary ruling lacks a factual and legal basis, seriously violates WTO rules, and undermines the overall situation of global cooperation in addressing climate change.
We urge the EU to immediately correct its wrong practices and jointly maintain the stability of China-EU economic and trade cooperation as well as EV industrial and supply chains.
10:40 AM BST
European shares claw back losses after global turmoil
European shares have clawed back nearly all of their losses since the global stocks rout began amid fears of a US recession.
The FTSE has gained 0.6pc today and is up 0.2pc this week, leaving it 0.8pc shy of its starting position on Friday when the panic on markets took hold. It had dropped as much 4pc.
The continent-wide Stoxx 600 index rose 1pc, regaining the key 500 mark and is set for its longest winning streak since May 15.
The US jobs report on Thursday helped calm investor nerves after July’s weak labour market figures fuelled worries of a prolonged slowdown in the world’s largest economy, leading to a financial market selloff.
The French Cac 40, Germany’s Dax, Spain’s Ibex 35 and Milan’s FTSE MIB all gained between 0.5pc and 1.2pc.
Teeuwe Mevissen, senior macro strategist at Rabobank, said:
Investors are buying the dip.. however, with the lack of liquidity in markets, we could see more volatility in the coming months and it could mean that the stock markets could take a step back.
10:26 AM BST
Oil on track to end week higher as stocks rally
Oil prices have steadied after a three-day rebound as traders monitor developments in the Middle East and a rally in wider markets.
Brent traded just above $79 a barrel after rising 1.1pc on Thursday and West Texas Intermediate was above $76, as signs of resilience in the US jobs market boosted stocks.
Oil has rallied after Brent tumbled on Monday to a seven-month low amid a rout in global equity markets.
The international benchmark is on track to end a four-week run of losses as the halting of production at Libya’s biggest field raised prices, as well as a sixth week of drawdowns from US stockpiles.
Meanwhile, the US, Qatar and Egypt are calling for a new round of ceasefire talks to end the war in Gaza, as the Middle East braces for an expected Iranian attack on Israel.
10:03 AM BST
Gas prices trade near eight-month highs
Gas prices are on track to jump nearly 10pc this week amid conflict around a key transit point near the Ukraine border.
Dutch front-month futures, the European benchmark, were last down 1.1pc today to less than €40 per megawatt hour, close to their highest levels since December.
Prices have risen more than 45pc since the beginning of the stockpiling season, pushed higher this week by Ukrainian troops taking the Sudzha point, which is the last transit point for Russian pipeline gas heading for Europe through Ukraine.
Moldova put its gas sector on “early alert” on Thursday amid concerns about a possible halt in supplies.
Rystad Energy analyst Christoph Halser said:
Fears of supply shortages continued to shape gas price developments this week.
The latest attack could jeopardize ongoing talks between Azerbaijan, Ukraine and the European Union for the continued flow of gas through Ukraine after the current transit agreement expires at the end of the year.
However, other analysts have tried to put the rising gas prices into perspective, pointing out they are at similar levels to last year:
Rise in natural gas prices catching some headlines. But as it turns out, exactly one year ago we also had a little summer scare with gas prices owing to strikes in Australia (remember that? no, me neither). So as it turns out, gas prices are still rising 0% in annual terms. pic.twitter.com/9WlakavnNF
— ángel Talavera (@atalaveraEcon) August 9, 2024
09:48 AM BST
China stocks fall despite inflation surprise
China stocks closed lower even after data showed inflation increased at a faster-than-expected rate in the world’s second largest economy in July, as analysts highlighted that demand remains sluggish.
The Shanghai Composite index was down 0.3pc at 2,862.19, while the blue-chip CSI300 index was down 0.3pc.
Asian shares were trying to end a tough week on a high note after Wall Street bounced following data that showed US jobless claims fell more than expected last week.
China’s consumer price index (CPI) edged up 0.5pc in July from a year earlier, versus a 0.2pc rise in June, the National Bureau of Statistics reported, higher than an expected rise of 0.3pc.
Lynn Song, chief economist of Greater China at ING, said:
Conditions are in place to see inflation trend a little higher in the coming months but it should not impede further monetary easing
With low inflation and weak credit activity, domestic factors continue to favour further monetary policy easing.
We continue to look for at least one more rate cut this year with the potential for more if global rate cuts accelerate.
09:38 AM BST
Pound faces worst losses against euro in two years
The pound is on track for its worst losing streak against the euro in two years amid the global volatility in financial markets.
Sterling was last up 0.1pc against the single currency for today at 85.5p but has tumbled sharply since the end of July, when the euro was worth just 83.9p.
The value of the pound plunged against both the euro and the dollar during the global financial turmoil this week, which was triggered by US recession fears and the unwinding of complex carry trades by major investors.
Sterling had already been dented by the Bank of England cutting interest rates for the first time in four years last week, having hit a one-year high of $1.295 in mid-July following Labour’s election victory.
However it is on track for a fourth consecutive weekly decline against both currencies, which is its worst run since December 2022 against the euro, and its worst run since September versus the dollar.
Shabab Jalinoos, global head of currency at UBS, said: “The Labour honeymoon is likely over. The pound has finally reacted to what has some time seemed like excessive long positioning.”
09:22 AM BST
Trading pioneers in line for ￡800m payday after selling Hargreaves Lansdown
Trading pioneers Peter Hargreaves and Stephen Lansdown are in line for an ￡800m payday after selling the eponymous business they founded in a spare bedroom in Bristol more than 40 years ago.
Our reporter Michael Bow has the latest:
The two men, who co-founded Britain’s biggest share trading platform Hargreaves Lansdown in a bedroom in 1981, have backed a takeover of the business by European and Middle Eastern investors.
Mr Hargreaves, 77, has agreed to sell half of his stake in the business for cash to the consortium, composed of big money investors CVC Capital, Nordic Capital and Abu Dhabi’s sovereign wealth fund.
Meanwhile, Mr Lansdown, 71, will sell all of his shares for cash.
Read what the two men stand to earn after another blow for the London Stock Exchange.
09:06 AM BST
UK borrowing costs face highest weekly jump since April
UK government borrowing costs are facing their biggest weekly rise since April after a volatile week dominated by concerns about the outlook of the world’s largest economy.
The yield on 10-year UK gilts - the return the government promises to pay buyers of its debt - slumped to its lowest level since February on Monday.
It dropped to 3.83pc at the height of the market turmoil as investors rushed to the safe haven of government bonds but it has since climbed to 3.96pc. Bond yields move inversely to prices.
The bond is actually down slightly today as concerns around a US recession have eased. The interest-rate sensitive two-year gilt yield was down slightly today to 3.6pc.
08:50 AM BST
UK markets rise as US jobs figures calm recession fears
The FTSE 100 rose as better-than-expected US jobs data allayed fears of recession in the world’s largest economy.
The blue-chip index was last up 0.2pc, while the mid-cap FTSE 250 rose 0.4pc, although both are set to post weekly declines for a second straight week.
Data showed on Thursday that weekly US jobless claims fell more-than-expected, suggesting that fears of an unravelling labour market were overblown and allayed some fears of a potential American. recession.
Weak economic data last week spurring recession fears in the US and the unwinding of the yen carry trade, which triggered a steep sell-off across stock markets.
Today, industrial metal miners led gains in London, rising as much as 2pc as copper prices rebounded.
Rate sensitive real estate investment trusts and real estate sectors also moved up 1.4pc each.
Hargreaves Lansdown gained 2.1pc after the investment platform agreed to a ￡5.4bn takeover by a private equity consortium.
Beazly gained 2.1pc after jumping more than 10pc on Thursday as the insurer’s first half-profits beat expectations.
08:27 AM BST
Revolution Bars to close 25 venues as High Court approves turnaround plan
The boss of struggling Revolution Bars has said he is “very pleased” to have secured High Court approval for its restructuring plan, which could stave off potential insolvency but result in the closure of around 25 bars.
The hospitality business needed the court to sanction its overhaul which it hopes will restore its finances after a difficult few years following the pandemic.
Shares surged 24pc after the approval of the restructuring plan, which will involve ending the leases of several loss-making venues, leaving the group with fewer bars across the UK.
After the overhaul is completed, the company said it will operate 27 Revolution Bars, 15 Revolucion de Cuba bars, 22 Peach Pubs and one Founders & Co site - leaving it with 65 venues in total.
At the end of the 2023 financial year, it had 89 sites including 46 Revolution Bars.
Chief executive Rob Pitcher said:
The group is now well diversified across the key brands, providing a more secure financial base and we look forward to the future with improved optimism.
We know this has been a very difficult period for all of our teams both in our sites and in our support office and I’d like to thank them for their support and resilience.
08:10 AM BST
Bellway expects to build more homes as property market recovers
Housebuilder Bellway has pointed to signs of recovery on the horizon for the housing market, as its order book strengthens.
Our business correspondent Pui-Guan Man has the details:
The FTSE 250 developer, which is awaiting news on its ￡720m bid for rival Crest Nicholson, built more homes than expected in the year to July 31.
New home completions fell to 7,654 homes, from 10,945 in the previous year, with the overall average selling price of those falling to around ￡308,000, from ￡310,306. However, both totals were slightly ahead of previous guidance.
Revenue fell by around 31pc to ￡2.4bn but Bellway said that the improved picture for mortgage interest rates has eased affordability constraints and improved consumer confidence.
Shares rose by 1.1pc, reflecting the brighter outlook for trading, as the developer said its forward order book has grown to 5,144 homes, from 4,411 homes, collectively valued at ￡1.4bn.
Chief executive Jason Honeyman said: “The improving trading backdrop, combined with the strength of our outlet opening programme, has generated healthy growth in the year-end order book. As a result, we are in a strong position to return to growth in financial year 2025, as previously guided.”
The news comes after Bellway was given an extra 12 days to make a firm takeover offer for rival Crest Nicholson. In July, Bellway made a ￡720m bid for the company. It has until 20 August to meet a “put up or shut up” deadline.
08:03 AM BST
UK markets subdued at the open
The FTSE 100 edged higher as trading began as uncertainty remains over the outlook for global markets.
The UK’s blue-chip stock index rose 0.1pc to 8,151.81 while the midcap FTSE 250 was flat at 20,509.72.
07:52 AM BST
China’s inflation rate more than doubles
Chinese inflation rose more than expected in July to hit a five-month high, official data showed, allaying fears about deflation in the world’s second largest economy.
The 0.5pc increase in the consumer price index was sharply up from the 0.2pc seen in June and marked the sixth straight month of rising, according to the National Bureau of Statistics (NBS).
China endured a period of deflation between October to January, when sliding prices of goods and services heightened worries of an economic slowdown.
July’s reading - which beat forecasts - represents the fastest rise in consumer prices since February, when the figure increased 0.7pc year-on-year.
Beijing has said it wants annual economic growth this year of around 5pc, a target considered ambitious by many experts as the country is also laden by prolonged debt crisis in the real estate sector, and high youth unemployment.
China Inflation Ratehttps://t.co/0Z209yoVX7 pic.twitter.com/266a0So3lP
— TRADING ECONOMICS (@tEconomics) August 9, 2024
07:34 AM BST
Hargreaves Lansdown takeover expected to be complete next year
Under the terms of the ￡5.4bn takeover bid for Hargreaves Lansdown, the Bristol-based investment platform would be bought for 1,110p per share, while shareholders would get a dividend of 30p per share.
The group of bidders is led by private equity buyout giant CVC, alongside Nordic Capital, and Platinum Ivy, a wholly-owned subsidiary of the Abu Dhabi Investment Authority.
In a stock market update, the consortium said the deal is set to complete in the first quarter of 2025, if shareholders approve the terms.
Alison Platt, chairwoman of Hargreaves Lansdown (HL), said the offer was an “attractive opportunity for HL shareholders to realise an immediate and certain cash value for their investment at a level which may not be achievable until the execution of the strategy is delivered over the medium to longer term”.
A statement from the consortium partners added that Hargreaves “requires substantial investment in an extensive technology-led transformation to improve HL’s proposition and resilience, and to drive the next phase of HL’s growth and development.”
07:27 AM BST
Hargreaves Landown agrees ￡5.4bn private equity takeover
Hargreaves Lansdown will be taken private and delist from the London Stock Exchange after agreeing to a takeover which values the trading platform at ￡5.4bn.
The FTSE 100 said it would recommend to shareholders the ￡11.40 per share cash offer tabled by a consortium of private equity funds led by CVC Capital Partners and Abu Dhabi.
It comes as it revealed assets under management last year rose by 16pc to ￡155.3bn as it increased its number of active clients by 78,000 to nearly 1.9m.
Underlying profit before tax increased by 4pc to ￡456m.
Chief executive Dan Olley said it has been an “eventful first 12 months” for him in the job. He said:
As I made clear on joining, we need to help more people across the UK save and invest to secure their financial future, so for us this is more than a mission, it’s an obligation.
I have therefore been reassured during process that the consortium are aligned with our mission.
07:25 AM BST
Get ready for months more market chaos, says Wall Street bank
The turmoil in global markets could last for months, a Wall Street bank has warned, amid efforts to close so-called “carry trades” which have been heavily squeezed.
Analysts at Bank of New York Mellon (BNY) said major investors face further pain as the Japanese yen will likely strengthen further.
Stocks have faced huge volatility this week amid fears of a recession in the US and a squeeze on major investors grappling with the recent surge in the yen.
The currency has risen after the Bank of Japan unexpectedly increased interest rates for only the second time in 17 years last week.
This squeezed margins on carry trades invested in the yen and forced investors like hedge funds to dump stocks in a race to meet their risk requirements.
Earlier this week, JP Morgan suggested the unwinding of these carry trades was only three-quarters complete.
Bob Savage, head of markets strategy and insights at BNY, said:
Expect the pain for yen shorts to remain in play for the weeks, if not months ahead.
Further risk reductions are going to follow and August will continue to be a highly volatile month.
07:07 AM BST
Good morning
Thanks for joining me. Stock markets face more turmoil this month as major investors still have more work to do to unwind the carry trades that are squeezing their margins, according to a Wall Street Bank.
Bob Savage, head of markets strategy and insights at BNY, said: “Further risk reductions are going to follow and August will continue to be a highly volatile month.”
5 things to start your day
1) All carers to get paid time off under proposals considered by ministers | It is hoped the proposal would help tackle Britain’s worklessness crisis
2) Linklaters partner banned from drinking at work events after Vienna trip | Magic Circle law firm issues final warning after partner accused of inappropriate behaviour
3) Trump: President should set interest rates | The Republican said he has “a better instinct” than many central bankers when it comes to setting borrowing costs
4) Japan nearly blew up global markets this week | Here’s how it could happen again
5) Channel 5-owner’s TV business loses $6bn of value | Paramount has cut $6bn (￡4.7bn) from the valuation of its cable TV networks in a sign of the looming death of traditional TV
What happened overnight
Asian shares are ending a rough week on a high as Japanese stocks are close to recouping all of the huge losses from Monday.
Meanwhile the yen slipped again as markets pared back the chance of an outsized US rate cut.
The Nikkei rose as much as 2.4pc early in the session before falling into the red and then edging up 0.6pc. It has erased most of the losses from a 13pc crash on Monday and finished the week 3pc lower.
The Hang Seng in Hong Kong added 1.9pc to 17,211.26 and the Shanghai Composite index edged 0.2pc higher to 2,876.51.
In South Korea, the Kospi jumped 1.5pc to 2,595.50, Australia’s S&P/ASX 200 advanced 1.4pc to 7,792.80.
Elsewhere, Taiwan’s Taiex gained 3.4pc, with chip maker Taiwan Semiconductor Manufacturing Company (TSMC) gaining 3.6pc, tracking Big Tech stocks’ rally on Wall Street. The SET in Bangkok was up 0.5pc.
On Wall Street on Thursday, the S&P 500 jumped 2.3pc to 5,319.31, for its best day since 2022 and shaved off all but 0.5pc of its loss from what was a brutal start to the week.
The Dow Jones Industrial Average rose 1.8pc to 39,446.49, and the Nasdaq composite climbed 2.9pc to 16,660.02 as Nvidia and other Big Tech stocks helped lead the way.
Treasury yields also climbed, signaling that investors are feeling calmer about the economy after a report showed fewer US workers applied for unemployment benefits last week. The number was better than economists expected.