Yahoo Finance FTSE 100 Live 1 July: Meta, Nvidia shares drop on fine fears, House prices rise, European markets higher
European markets strengthened today as traders reviewed the first round of voting in France’s parliamentary election.
The CAC 40 rose 2% amid speculation that the far-right National Rally party will fall short of an absolute majority.
In the UK, one of the country’s biggest mortgage lenders has reported that house prices rose last month.
FTSE 100 Live Monday
House prices rise in June
French stocks higher after Sunday poll
Gas and electricity bills to go down
FTSE finishes flat
16:41 , Simon Hunt
At the end of the first day’s trading in the second half of the year, the FTSE 100 index has finished largely flat, up around 3 points to 8,167.
Amid a relatively lackluster day for the stock market, shares in Anglo American fell as much as 3% amid reports of a fire at one of its mines.
AJ Bell investment director Russ Mould said: “Anglo American shares were under pressure as the company had to suspend production at its Grosvenor steelmaking coal mine in Queensland after an underground fire.
“Mercifully, no-one was hurt in the incident but, while operational issues in a hazardous activity like mining are not unusual, the early indications are the mine will not be back online for months so this is a serious issue for the group.”
Nvidia falls on reports of antitrust charge
16:20 , Simon Hunt
Shares in Nvidia have fallen as much as 1.5% this afternoon after a report by Reuters suggesting that the chipmaker was about to be charged by French competition regulators.
The charge would be the first of its kind for the company by a competition regulator and follows news in September that it had its offices raided by French government officials.
Nvidia and the French competition authority both declined to comment.
Industrial action at steel giant Tata suspended by Unite
16:06 , Simon Hunt
A planned strike by workers at steel giant Tata over job losses has been suspended.
Members of Unite have been taking industrial action such as banning overtime and were due to stage an all-out strike from next Monday.
The union is embroiled in a dispute with the company over plans to close the two blast furnaces at its plant in Port Talbot, south Wales and switch to a greener way of steel production, which needs fewer workers.
Labour more trusted than Tories on economy, business and stock market
15:34 , Simon Hunt
Labour is more trusted on the economy and business according to a detailed poll of voter intentions carried out by investment platform XTB. The poll of over a 1,000 stock market investors showed Labour was leading the Tories 60-40 on the economy and 54-46 on the stock market.
On business, voters said sectors including housing, automotive, technology, pharmaceuticals and retail, were more likely to perform better under Labour. The only industry where voters thought the Conservatives would do better was banking.
The results of the poll suggest that Conservative attacks on Labour’s economic policies are failing to cut through.
Wall Street opens higher in a week featuring set-piece jobs data
14:52 , Michael Hunter
New York stocks are pushing higher, continuing to rally toward blockbuster jobs data due at the end of the week.
The S&P 500 is up 5 points in initial trade at 5466.75. with Boeing up over 2% after agreeing a near $5-billion deal to buy Spirit Aerosystems in a long-expected move.
Meta, the parent of Facebook, is down over 1% as a new multibillion-dollar fine looms over the social media giant from European regulators.
New York markets will also be closed on Thursday, for the Independence Day celebration in the US.
With yields on European sovereign debt rising after the French election, money was finding its way into US Treasuries instead, pushing their yields lower.
Traders demand higher returns to lend to France and Italy amid tense Paris politics
14:37 , Michael Hunter
Reaction to the outcome of France’s snap parliamentary election has been sanguine overall Stocks have been able to push higher in Paris and the euro is firmer, with the market taking solace from a hung parliament rather than a strong mandate for the populist right or the hard left.
But since President Emmanuel Macron’s shock move to call an election, the returns investors are demanding to lend money to the French government has risen steadily. Yields on benchmark 10-year debt have been heading toward the 4% mark, a level more usually associated with the more heavily indebted Italy.
Concern at fraught eurozone politics have resonated around Italy – long seen as a risker option due to its high level of borrowing. That has left its yields heading higher, and above 4% for 10-year debt today.
The euro is up 0.4% at $1.0757. The CAC 40 stock index is up almost 145 points at 7624.06
Wall Street eyes opening gains at the start of a week with blockbuster jobs numbers due
13:25 , Michael Hunter
New York stock markets are in course to rise at the start of trade in a week which will feature one of the most closely watched economic reports of the month.
Friday’s job report will feed into the expected timing of am interest rate cut from the Federal Reserve. The non-farm payrolls number is expected to show the creation of 189,000 jobs in June, easing back from 272,000 for May.
In the meantime, a major merger moved into view, with Boeing announcing an all-stock plan to buy Spirit AeroSystems for $4.7 billion.
Facebook’s stock is in focus after the EU’s move toward fining it up to £10 billion.
Overall, futures trading was pointing to a rise of around 13 points for the S&P 500.
Midday markets: Bitcoin and Brent advance
12:07 , Michael Hunter
Bitcoin and Brent crude oil are setting the pace on London’s markets in the early afternoon, with more modest gains for stocks. And the pound is ticking higher against the euro and the dollar,
French stocks are pressing higher with the country’s election results in focus, pointing to a hung parliament rather than a clear win for the populist right or the radical left in the country’s snap parliamentary elections.
Comment: Tech's 'bigger is better' era may be over
11:28 , Simon Hunt
Why are so many of the world’s biggest tech firms based in the US? Why has Europe never managed to create its own Amazon, Google or Meta?
Part of the explanation can be put down to an entrepreneurial spirit, less red tape, and deeper pools of capital on the other side of the Atlantic. But another part of it is down to differing attitudes to competition policy.
The US rules have been significantly more lax for decades. Much of that can be attributed to The Antitrust Paradox, a 1978 book by legal scholar Robert Bork.
Who cares whether a merger will affect the concentration of a particular market, argued Bork. What matters is whether the deal is good or bad for consumer welfare. Never mind the rest.
The argument has shaped US attitudes to competition ever since – it helps explain why Facebook was able to acquire Instagram in 2012 and WhatsApp in 2014 without too much trouble. But there is a growing sense that this approach has run its course.
As we report today, Big Tech firms like Apple and Meta are now facing billions of dollars in fines from EU regulators amid concerns over their business practices. The move is part of regulating what the EU calls ‘gatekeepers’. It describes gatekeepers as “large digital platforms providing core platform services” but it may as well have called them “firms we think have gotten way too big.”
The EU’s toolkit for measuring how well a tech firm behaves in a market is a lot more complex than whether any particular action makes life easier for consumers. Instead it weighs whether the rights and freedoms of consumers are being respected and whether smaller rivals are being unfairly pushed out.
If the EU presses ahead with these blockbuster fines it could be years before any firm is forced to pay them. But the era of tech giants’ acquisition sprees and side-stepping regulators with ‘bigger is better’ arguments feels well and truly over.
Meta could face £10 billion fine as EU set to pursue rule break charge
11:00 , Simon Hunt
The EU’s crackdown on the practices of Big Tech stepped up a gear today after social media giant Meta was braced for as much as £10 billion in fines for an alleged violation of competition rules.
The Facebook and Instagram owner is to be told that its new ‘pay or consent’ model, under which users must pay a fee if they refuse to have their data harvested on the platform, was in breach of the EU’s new Digital Markets Act with which tech firms were expected to comply from the beginning of March.
The EU is set to complain that the pay or consent policy risks presenting a ‘false alternative’ to users of the social media platforms, according to a report in the Financial Times, and that the cost of rejecting personal data collection could force some users to give their consent.
Centrica upgrade boosts shares, FTSE 100 higher
10:19 , Graeme Evans
French stocks are higher amid speculation that the far-right National Rally party will fall short of the seats needed for an overall majority in parliament.
The CAC 40 recovered after heavy recent selling to put back 2%, with BNP Paribas and Renault among those up 3% after Sunday’s first round of voting.
The FTSE 100 index rose 0.4% or 33.97 points at 8198.09.
London-listed banks benefited from the read-across to the US after the likes of JPMorgan Chase and Morgan Stanley announced plans for increased dividend payouts.
The distributions have been made possible after the Federal Reserve’s annual stress test found balance sheets well placed to withstand a severe economic downturn.
Among London’s international players, Barclays rose 2.7p to 211.6p, HSBC by 6.9p to 690.8p and Standard Chartered added 12.8p to 728.8p.
Broker upgrades benefited a number of leading FTSE 100 stocks, including Centrica after Berenberg switched the British Gas owner to a “Buy“ stance.
Its shares rose 2.5% or 3.4p to 138.2p, similar to the rise of 15.3p to 634.8p by Land Securities after HSBC recommended the Piccadilly Lights owner with a 747p target.
On the fallers board, Anglo American fell 60p to 2442p after a gas ignition incident caused it to suspend production at its Grosvenor steelmaking coal mine in Queensland.
The FTSE 250 index added 0.6% or 112.29 points to 20,398.52, with Britvic up another 9.25p to 1190.25p after leading shareholder Aviva said Danish brewer Carlsberg had scope to sweeten its 1250p a share takeover approach.
High debt repayments burn corporate earnings as servicing costs soar
09:52 , Michael Hunter
High interest rates are taking a toll on company finances as the cost of loans rose sharply in the 2023/24 financial year, according to an influential industry tracker
Janus Henderson’s Global Corporate Debt Index found that the amount spent servicing debt by the world’s largest listed companies soared by almost a quarter.
Banks and bondholders raked in a record $458 billion (£361 billion), an increase of $89 billion. Higher interest rates burnt up over 12% of operating profits globally.
In the UK, net corporate debt hit $484 billion, up just over 3%, with interest costs up almost 30% year-on-year. Dividends in the mining sector funded by borrowing drove the trend.
Vodafone remained the UK’s most indebted firm, but used asset disposals to cut net debt.
Gas and electricity bills to go down, at least for now, as Ofgem lowers price cap
08:33 , Michael Hunter
Energy bills are going down, as a new lower price cap kicks in today for around 28 million people.
The revised limit means that a household using a typical amount of gas and electricity will save £122 compared with the previous cap, paying around £1,568 a year. Ofgem’s latest restriction runs until the end of September.
The cap was introduced after Russia’s invasion of Ukraine roiled global energy markets and sent prices soaring. That sparked a public outcry over high bills and profiteering among gas and electricity suppliers, which made record profits amid the wider cost of living crisis stoked by energy bills.
The regulators’ restriction is designed to ensure prices charged to consumers “are fair and that they reflect the cost of energy”, it says.
Experts expect it to rise again in the Autumn, as demand for central heating kicks in.
And the cap is a limit on the amount charged per unit of energy, so families using more than the average amount will still face higher bills.
Average energy costs also remain hundreds of pounds a year higher than three years ago
Banking stocks rally in stronger FTSE 100, Anglo American lower
08:31 , Graeme Evans
The FTSE 100 is 0.6% or 48.58 points higher at 8212.70, with the CAC 40 up more than 2.5% following France’s first round election result.
In London, Friday’s US stress test outcome boosted the banking sector as Barclays lifted 3.8p to 212.7p, HSBC by 7.6p to 691.5p and Lloyds Banking Group 0.9p to 55.6p.
Broker recommendations sent Centrica and Land Securities up by 4.15p to 139p and 21.5p to 641p respectively.
Anglo American shares slumped 62.5p to 2439.5p after a gas ignition incident caused the miner to suspend production at its Grosvenor steelmaking coal mine in Queensland.
The FTSE 250 index improved 123.18 points to 20,409.21.
House prices rise in June, says Nationwide but market remains ‘subdued’
07:49 , Simon Hunt
A closely watched tracker from one of the UK’s biggest mortgage lenders has showed house prices rose in June.
The 0.2% month-on-month rise was softer than the 0.4% seen in May, but the rate of annual growth rose, to 1.5% from 1.3%.
It took the average house price to £266,604 in June from £264,249 in May.
That leaves prices around 3% below the all-time high touched in the summer of 2022.
Transactions involving mortgages were down by a quarter “reflecting the impact of higher borrowing costs” according to Robert Gardner, Nationwide’s chief economist.
“”While earnings growth has been much stronger than house price growth in recent years, this hasn’t been enough to offset the impact of higher mortgage rates, which are still well above the record lows prevailing in 2021 in the wake of the pandemic,” he added.
FTSE 100 and European stocks seen higher, China figures beat hopes
07:22 , Graeme Evans
European stock markets are pointing higher after the first round of the French election gave the National Rally party a smaller-than-expected lead.
The Cac 40 in Paris is seen rising by more than 2% following a recent run of losses, while the euro has also strengthened overnight.
London shares are poised to start the new quarter in robust fashion, with the FTSE 100 index set to open 46 points higher at 8210.
Asia markets are also in positive territory as further expansion in China’s manufacturing sector resulted in June’s PMI reading beating hopes at 51.8.
US markets finished in the red on Friday as weaker tech stocks left the S&P 500 index down 0.4% and the Nasdaq off 0.7%.
Harland & Wolff share suspended
07:16 , Simon Hunt
Shares in shipbuilding business Harland & Wolff are to be suspended after the company failed to publish its annual results on time.
The firm said delays to its results were caused by “ongoing discussions with its auditors regarding revenue recognition relating to the multi-year and complex nature of some of the contracts under which the Company is working.”
It said its annual report was set to be published during the week beginning 8 July, more than a week past the deadline according to AIM rules, and that shares would be suspended until that time.
Recap: Friday's top headlines
06:44 , Simon Hunt
Good morning from the Standard City desk.
Shein’s prospective London IPO might fetch a market value of £50 billion, supposedly, a tasty amount for a market that has been starved of floats for several years. But even if the allegations against Shein remain unproven, the sense that all is not well won’t go away.
Every time the City decides to chase a big float, two things happen. 1) It looks desperate. 2) The deal never happens anyway.
In 2019, the London Stock Exchange loosened regulations to allow the float of Saudi Aramco.
In the end, as seemed obvious, Aramco baulked at even the laxer rules and listed in Riyadh anyway.
In 2023, London politicians chased the float of microchip giant Arm. Despite lobbying from three prime ministers, Arm did what it was always going to do and chose New York.
A better approach is to play the long game. To say that the rules are there for a reason and shan’t be bent for anyone.
To say that London is a special members club that keeps the riff-raff out. If you can’t follow the regulations, you can’t join.
~
Here’s a summary of our top headlines from Friday:
UK racing out of recession faster than expected, a boost to the next PM. And there was more to spend with official figures from the ONS showing easing pressure on household budgets, with Real households’ disposable income up 0.7% in the quarter.
House price data showed how the market remains moribund as buyers hold off before a rate cut from the Bank of England. Zoopla's closely.
City of London fails to score a single £100 million office deal.
And in City Spy: