Yahoo Finance FTSE 100 Live 21 February: 'Blowout' Nvdia results, blue-chips close down 0.7%, record budget surplus
London’s FTSE 100 Index is sharply lower today after a negative reaction to results by heavyweights HSBC, Glencore and BAE Systems.
The weakness came despite HSBC’s $30 billion profits haul and highest dividend since the financial crisis and BAE’s latest order book surge.
Meanwhile, a record budget surplus for January has given City economists a steer on how much headroom Jeremy Hunt has for tax cuts at next month’s Budget.
FTSE 100 Live Wednesday
HSBC dividend highest since 2008
Record budget surplus in January
BAE reveals order book surge
'Blowout' Nvdia results
21:55 , Daniel O'Boyle
Nvdia earnings topped the lofty expectations markets had for the chip giant, as revenue rose by 265% to $22.1 billion in the fourth quarter.
Profit for the quarter was $12.3 billion.
Philip Kaye, Co-Founder and Director at Vesper Technologies (Vespertec), said: “NVIDIA’s blowout earnings call this week comes as no surprise – it validates what we’ve known for some time: the demand for AI computing power across industries is surging exponentially. Moreover, with AI adoption expected to accelerate across Enterprise over the next 1-2 years, tremendous potential for further growth remains.”.
FTSE 100 closes down 0.7% as results disappoint
16:39 , Daniel O'Boyle
The FTSE 100 closed down 0.7% today at 7,662.51, amid disappointing blue-chip results.
HSBC, BAE Glencore and Rio Tinto were all lower on the day they published their 2023 results.
Housebuilder Vistry defends hiking boss’s pay amid shareholder opposition
15:58 , Daniel O'Boyle
Housebuilder Vistry has defended the decision to hike the pay package of its boss despite shareholders revolting against the deal.
Vistry said it recognised the concerns people have but was standing by the pay policy.
The company came under pressure in August when new proposals were narrowly approved by shareholders.
Olympia developers sign up IWG to provide flexible office space at west London cultural hub
14:48 , Daniel O'Boyle
The developers behind the £1.3 billion regeneration of Olympia have signed up flexible workplace provider IWG to provide 73,000 sq ft of office and other space in one of their first letting deals.
The project, led by by property company Yoo Capital and investors Deutsche Finance International, aims to turn Olympia, best known as an exhibition and events centre into one of London’s leading cultural hubs when from 2025.
IWG’s space will span the entire 5th floor level of One Olympia. It will provide a range of workspaces from recording studios to podcast rooms, as well as offices.
Dominic Raab heads into the City with appointment at Appian Capital
13:50 , Daniel O'Boyle
Dominic Raab, the former foreign secretary and deputy prime minister, is taking up a new role in the City as he prepares for life away from Westminster when he steps down as an MP at the next general election.
The arch Brexiteer has been appointed by Appian Capital as a senior strategic advisor on global affairs. The firm specialises in mining and mining-related companies.
Raab will also chair Appian’s new partnership with a non-partisan US group called SAFE that advocates energy security for America and ways business can help reduce its reliance on imported energy.
How to sell your start-up, by those who've made millions doing just that
13:05 , Daniel O'Boyle
You’d have made a bad career move if you spent your first day in a new job working out how to leave it. But when you’re starting a business, having an exit plan from the outset is a good idea, according to entrepreneurs who have been there – and sold that.
Joanna Jensen, whose kids’ toiletry business Childs Farm was sold to listed soap-maker PZ Cussons for some £40 million in 2022, said she always had an eye on the exit.
“I’m an extremely commercial individual – my background was in investment banking,” Jensen explains. “When I started Childs Farm, I was already thinking about my ultimate objective. Most entrepreneurs – especially men – claim it was never about the money for them... they wanted to make a difference to the community. That’s complete horseshit: we’re all doing it for the money.
Aldi plans jobs boom as £1.4 billion expansion plans take off in London and the UK
12:28 , Daniel O'Boyle
Discount grocer Aldi is planning a jobs bonanza for the UK and London as it accelerates its £1.4 billion expansion plans.
The German firm is already the fourth-biggest supermarket chain in the country and runs almost 50 shops across the capital, from Archway to Thamesmead.
It said today that 5,500 new roles would be on offer nationally this year, adding to the 45,000 people it already employs. A range of jobs will be created, including managers, cleaners and store assistants and workers within its 11 distribution centres.
Nvdia results to come on Wall Street
11:58 , Daniel O'Boyle
Today’s trading in the US will be highlighted by earnings figures for Nvdia, probably the most closely watched stock of the year.
Boosted by AI demand, Nvdia shares are already up 44% this year. The firm is valued at $1.7 trillion, more than half the value of the entire London Stock Exchange.
Market snapshot: FTSE 100 down almost 1%
11:41 , Daniel O'Boyle
Take a look at our midday market snapshot, with the FTSE 100 down almost 1%.
Alcohol industry calls for cut to ‘punishing’ duty rates
11:27 , Daniel O'Boyle
The wine and spirits industry has called for a cut in alcohol duty at the Budget, claiming last year’s increases had an “immediate and negative impact” on UK businesses.
The Wine and Spirit Trade Association (WSTA) called on the Chancellor to take action to recover almost £600 million in losses to Treasury coffers, arguing that a duty cut would prevent further inflation-fuelling price rises, support business and boost revenue to the Exchequer.
WSTA said latest HMRC data published on Wednesday suggested the Treasury lost £436 million in excise duty receipts for wine and spirits between September and January compared with the same period a year earlier.
King Charles banknotes to enter circulation on June 5
10:59 , Daniel O'Boyle
Banknotes carrying a portrait of the King will be issued for the first time on June 5, the Bank of England has said.
The portrait of Charles will appear on existing designs of all four banknotes (£5, £10, £20 and £50), with no other changes to the existing designs.
Polymer banknotes featuring the portrait of the late Queen Elizabeth II will remain legal tender, and will co-circulate alongside the King Charles III notes.
Glencore down 6% in weak FTSE 100, Currys higher in FTSE 250
10:32 , Graeme Evans
Glencore shares have fallen 6% or 22.7p to 367.7p, the miner’s lowest level since early 2022 after annual results came in short of expectations.
Earnings halved to $17.1 billion (£13.6 billion), reflecting lower thermal energy prices than a year ago. The City had been looking for about $17.4 billion.
Glencore also reported a big dividend cut to 13 US cents a share, with no repeat of the $1 billion “top-up” payment enjoyed by investors last autumn.
The caution comes as Glencore retains cash for the planned acquisition of the steelmaking coal business of Canada’s Teck Resources.
Glencore’s weakness and the 7% results-day slide for HSBC meant the FTSE 100 index underperformed with a decline of 0.8% or 59.51 points to 7659.70.
On the risers board, Barclays added another 3.1p to 164.8p after its pledge to return £10 billion to shareholders lifted the lender’s shares by 8.6% in yesterday’s session..
The post-results momentum for NatWest also continued as shares improved 2.2p to 231p, the highest level since October.
In contrast to the top flight, the mid-cap FTSE 250 index edged up 1.10 points to 19,110.73.
Takeover target Currys put on 1.1p to 67p, taking the electricals chain further away from the 62p a share tabled by Elliott Advisors as investors look to a potential bid battle involving China’s JD.com.
The biggest fall in the FTSE 250 was by AI-led cyber security firm Darktrace, which slid 8% or 29p to 331p.
Britons bagging bargains as spending in discount stores jumps by 41% annually
10:07 , Daniel O'Boyle
Households spent 41% more at discount stores by value in January this year than the same month in 2023, according to customer data from Britain’s biggest building society.
Nationwide Building Society said people are turning to bulk buy and discount retailers as essential costs continue to increase.
Debt payments increased by 7% by value in January, compared with a year earlier, while supermarket spending was up by 6%.
Rio shares slip after lower metals prices corrode profits
09:50 , Michael Hunter
Shares in London-listed Australian mining behemoth Rio Tinto are under pressure after it revealed the the impact of cooling commodity prices on its 2023 profits.
It reported a 12% drop in underlying earnings of $11.8bn (£9.4 billion), driven by lower metals prices, especially aluminium. Prices fell further from peaks hit during Covid, as supply chains normalised after the pandemic.
Iron ore fared better. The division made up 80% of the firm’s profits, and underlying earnings from it were up 6%, ahead of a 2% rise in the commodity’s price.
The £65-billion company is the second-biggest miner in the world, after BHP. Rio upped its payout for investors by more than City experts expected with a hike to $2.58 per share, up from $2.25 for 2022.
Chief executive, Jakob Stausholm, called the results “resilient”, and said: "We will continue paying attractive dividends and investing in the long-term strength of our business as we grow in the materials needed for a decarbonising world."
Rio’s shares fell 54.8p to 5175.2p
BT shares steady after big hotel deal
09:39 , Daniel O'Boyle
BT shares are steady at 107.5p after today’s shock hotel deal.
The telecoms giant agreed to sell the iconic BT Tower to American hotels business MCR Hotels for £175 million. Shares briefly hit 108.5p on the news before settling only slightly higher than yesterday’s close.
Top-paid FTSE boss AstraZeneca’s Pascal Soriot sees pay jump again to £16.9m
09:32 , Daniel O'Boyle
Drugs giant AstraZeneca has handed its boss Pascal Soriot a pay deal worth £16.9 million and proposed changes which could lead to an even higher deal next year.
The pharmaceutical firm revealed the deal, which is predominantly long-term bonus payments, in its latest annual report.
Chief executive officer Mr Soriot was handed the sum after AstraZeneca’s profits more than doubled in 2023 strong sales of its cancer treatments.
Angling Direct weathers storms, eyes Europe
09:08 , Daniel O'Boyle
Fishing tackle shop Angling Direct weathered a stormy winter to land £81.7 million worth of sales in the year to 31 January.
Sales were up by 10% on the prior year, thanks to two new shop openings and a big growth in online sales to mainland Europe, and despite the “disruption to fishing” caused by storms Babet, Ciaran and Henk. The business says it plans to focus more on Europe, opening its first brick-and-mortar shop outside the UK this Spring in the Dutch city of Utrecht.
Boss Steve Crowe said: “Angling Direct has continued to gain market share in the UK and Europe, and we believe there are significant further growth opportunities in both markets.”
Shares rose by 3.7% to 40.5p. They’re up 37% in the last year.
FTSE 100 lower amid HSBC and Glencore pressure, FTSE 250 holds firm
08:40 , Graeme Evans
HSBC shares have fallen 7%, down 47.55p to 596.3p after the lender’s China exposure left fourth quarter results short of expectations.
Miner Glencore also dropped 4% or 15.7p to 374.7p after reporting lower profits alongside no repeat of last year’s top-up dividend payments.
Rio Tinto weakened 54.8p to 5175.2p following its results and BAE Systems fell back from a record high, down 23p to 1230p despite strong annual figures.
The pressure caused the FTSE 100 index to weaken 54.49 points at 7664.72, although Prudential and Barclays rallied 2% at the top of the risers board.
The FTSE 250 index rose 6.38 points to 19,116.01, with Hochschild Mining up 1.3p to 90.1p after the first gold pour at its Mara Rosa mine in Brazil.
BT Tower sold to hotels company
08:35 , Daniel O'Boyle
The iconic BT Tower has been sold to MCR Hotels in a £275 million deal.
BT said the sale will secure “its place as a London landmark for the future.”
Brent Mathews, Property Director, BT Group said: "The BT Tower sits at the heart of London and we've been immensely proud to be the owners of this important landmark since 1984. It's played a vital role in carrying the nation's calls, messages and TV signals, but increasingly we're delivering content and communication via other means. This deal with MCR will enable BT Tower to take on a new purpose, preserving this iconic building for decades to come."
Tyler Morse, CEO and owner of MCR Hotels, said: "We are proud to preserve this beloved building and will work to develop proposals to tell its story as an iconic hotel, opening its doors for generations to enjoy."
The 177 metre high tower was once the tallest structure in London. For years, its location was an official secret.
Market snapshot: FTSE 100 lower
08:28 , Daniel O'Boyle
Take a look at today’s market snapshot as London’s top flight falls back below 7700.
BAE Systems backs London as the main home for its shares
08:09 , Michael Hunter
FTSE 100 defence giant BAE Systems backed London as the main home for its shares today.
In a conference call with reporters on its 2023 results, Charles Woodburn the chief executive of the £38 billion company told the Standard “we’re very contented with our London listing”.
He added: “If you go back a few years, we were trading at a discount to some of our US peers, but I think through the strong performance of the business over recent years, we've closed much of that gap.”
Companies earning much of their revenue overseas especially in dollars, or with major parts of their business in the US have been drawn to New York in the last few years, where a deeper pool of capital can mean higher valuations,
CRH, the world’s biggest building products group and betting group Flutter are two major firms that made the move. And Arm, the chip designer, chose New York over its former London home when it was spun back out as a separate company by Japanese owner SoftBank.
BAE is a major player in the US and completed the $4 billion acquisition of US-based Ball Aerospace this month.
Glencore's annual profits halve as the miner and trader is hit by lower prices
07:56 , Michael Hunter
Glencore, the FTSE 100 miner and commodities trader has reported a 50% fall in profits, due to sliding prices
Earnings fell to $17.1 billion for 2023, coming off two record-breaking years
Its chief executive , Gary Nagle, said the fall came “against the backdrop of a rebalancing and normalisation of international energy trade flows”, but that the earnings were “healthy”.
Revenue fell 15% to £217.8 billion.
Heathrow reports first profit since 2019 as return to the skies takes 2023 passenger number over 79 million
07:44 , Michael Hunter
London’s main international travel hub is back in profit for the first time since the pandemic, and Heathrow has reported the third-highest number of passengers in its history for 2023.
Over 79 million people used the airport in the year, The return to annual profit – of £38 million – was helped by a strong Christmas getaway season at the West London hub.
Its new CEO, Thomas Woldbye, said the results gave Heathrow “a great platform to build on”, adding:
“In 2024, we are expected to deliver even further improved service to more passengers, but with airport charges cut by 20% in real terms.”
Heathrow also threw its weight behind calls for a return to tax rebates for visitors to the UK, with the ditching of the so-called “tourist tax” ahead of next month’s Budget from Chancellor Jeremy Hunt.
It said there was an opportunity to “make the UK a magnet for international tourism spend by levelling the playing field with the UK’s European rivals and bringing back tax free shopping.
“The Spring Budget should not miss the chance to deliver change on both of these key issues for the economy.”
The full Standard story is here.
'We doubt this will pave the way for a big pre-election splash'
07:43 , Daniel O'Boyle
Ruth Gregory, deputy chief UK economist at Capital Economics, says the Chancellor has some wiggle room, but not enough for a big pre-election giveaway at next month’s Budget.
She said: “January’s public finances figures delivered some much-needed good news for the Chancellor in the lead-up to the Budget on 6th March.
“But we doubt this will pave the way for a big pre-election splash. We think the Chancellor will be handed “headroom” of just £15bn (0.5% of GDP), limiting his ability to unveil big unfunded tax cuts if he wishes to adhere to the fiscal rules.”
Hunt 'has headroom for 2p tax cut'
07:38 , Daniel O'Boyle
Michal Stelmach, senior economist at KPMG UK, says the latest public borrowing figures would allow Jeremy Hunt to shave 2p off of the basic rate income tax if he wanted to do so.
He said: ““The latest set of data suggests that borrowing could end 2023-24 at £114 billion. We expect the OBR to upgrade its fiscal outlook on the back of a weaker expected path for interest rates, lower spending on inflation-linked debt, as well as a possible upward revision to their net migration assumptions, which are net positive for the public finances. This could increase the headroom to meet the fiscal mandate to £21 billion, up from £13 billion at the Autumn Statement.
“The policy choice lies between fiscal pragmatism and a stated desire to cut taxes. Accounting for the customary fuel duty freeze could leave the Chancellor with around £14 billion to play with. This would be enough to afford a 2p cut to the basic rate of Income Tax, also benefitting the pensioners who could not take advantage of the recent reduction in the National Insurance contributions. However, it would inevitably come at a cost of a greater constrain on future policy options. Navigating this delicate balance will be a tricky task in an election year.”
BAE Systems profit rockets, helped by record order intake
07:21 , Michael Hunter
BAE Systems has reported a 9% rise in sales and profits, helped by record order intake as governments around the world beef up their defences in uncertain geopolitical times.
It filed revenue of over £25 billion for 2023 and underlying earnings of £2.5 billion.
The £38 billion company upped its payout to shareholders by 11% to 30p per share.
Charles Woodburn, chief executive, said: “Our performance, combined with our global footprint and record order intake, means we're well-positioned for sustained growth in the coming years
“This will help us deliver on our order backlog and help ensure our government customers stay ahead in an uncertain world, whilst delivering increased value to our shareholders and the communities where we operate.”
FTSE 100 seen flat amid Wall Street jitters, China stocks rally
07:19 , Graeme Evans
Wall Street shares lost ground last night as traders awaited today’s Federal Reserve minutes and Nvidia earnings after tonight’s closing bell.
Shares in the semiconductor giant fell 4%, reflecting the weight of expectations after an AI-fuelled rally that has propelled the company to a $1.7 trillion (£1.35 trillion) valuation.
The jitters meant the S&P 500 index retreated 0.6% and the Nasdaq Composite by 0.9%, with other Magnificent Seven stocks also in the red.
Retailer Walmart bucked the trend, closing 3% higher at a fresh record after its fourth quarter results beat expectations.
The weak US session failed to knock the recovery of Chinese stocks as the Shanghai Composite and Hang Seng index are up 1% and 1.8% respectively.
The FTSE 100 index closed nine points higher at 7719 last night and is forecast by IG Index to open today’s session broadly unchanged.
UK in record budget surplus
07:06 , Daniel O'Boyle
The UK recorded a record budget surplus in January, in a boost to Jeremy Hunt ahead of the Budget.
The Government typically brings in more money than it spends in January, but the end of the energy support scheme and lower interest payments on inflation-linked gilts helped ensure the surplus was bigger than ever before.
ONS Deputy director for public sector Jessica Barnaby said: “January’s surplus is the largest in nominal terms since monthly records began in 1993, although borrowing in the year to January is only slightly lower than the same period last year. Tax receipts are always higher in January than other months owing to self-assessed taxes, which often leads to a surplus.
“Also, with recent reductions in the RPI rate, interest payable on government gilts and without last year’s energy support schemes, overall expenditure was down on this time last year, despite increased spending on public services and benefits.
“As a proportion of gross domestic product, public sector debt is up on the year, and remains at levels last seen in the 1960s.”
HSBC reports record profits but China worries bite shares
07:03 , Daniel O'Boyle
HSBC posted record profits of more than $30 billion (£24 billion) for the last year, figures that are bound to respark the debate about bank profiteering and increase calls for a windfall tax on the biggest lenders.
With the UK in recession and consumers struggling, high bank profits are unlikely to play well with the public.
Chief executive Noel Quinn, who declined to speak to the Evening Standard directly for the first time in years, told shareholders that the bank would pay out its highest dividend since the financial crisis of 2008 and buy back another $2 billion of shares to boost investor returns.
Recap: Yesterday's top stories
06:57 , Daniel O'Boyle
City grandees were in pretty chipper mood on Monday night at the annual dinner of the Corporation’s Policy and Resources Committee — an event that is far, far grander than its prosaic title sounds.
Despite the gloomy headlines about the dearth of IPOs and companies shifting their listings to New York they insist the Square Mile is evolving, not declining.
They point to the growth in overall City employment and the speed with which skyscrapers such as 22 Bishopsgate filled with tenants, despite concerns that hybrid working has made the traditional office redundant. In his speech, committee chairman Chris Hayward called for services — and particularly the City’s specialities of financial and professional services — to be given far greater priority in the Government’s trade policy.
As he put it: “As a country, we export more of our management consultancy services than we do cars.”
Here’s a look at some of our other top stories:
He has an unarguable point although the plea has a stable door and bolting horse feel to it.
The mighty services sector, which does after all account for more than 80% of Britain’s GDP, was ridiculously overlooked in the Brexit trade negotiations. That would have been the time to put services front and centre of trade policy.
Many of the barriers to European markets that Brexit created are still in place, although they are gradually being lowered through painstaking negotiations as relations with Brussels slowly warm up.
But he is right about the direction of travel. And although the City is a thriving tech power house, the latest worrying report from Goldman Sachs shows that we still have a long way to go in creating the high productivity small businesses that could power the economy out of its current productivity malaise.
Lack of access to finance was flagged as one of the key challenges holding these firms back.
So as well as selling its wares to the rest of the world the City must not neglect “exporting” its services to the rest of the UK to help bridge that yawning funding gap.
Barclays delivers profits of £6.6 billion and big shareholder returns but impairment charges creeping up to £1.9 billion.
Tech secretary Michele Donelan says a more skilled workforce is needed to ensure companies do “not have to leave and go to America”
Work starts on 50 storey apartment block at Bankside, the tallest residential tower currently under development in central London
IHG finance boss says the chain ‘100%’ intends to rival recent ultra-high-end London openings like the Peninsula and OWO
The Cube immersive experience based on TV show coming to Canary Wharf later this year
Piano Works bought by Nightcap
Ex Burberry finance chief joins Diageo board
And... The Body Shop names the central London stores set to shut
