Yahoo Sports FTSE 100 Live: Shares higher after US debt ceiling vote, Dechra backs £4.5bn takeover
London shares are enjoying a positive session after a vote in the US Senate ended recent uncertainty over a potential debt default.
Shares were also buoyed by better-than-expected employment data, which showed the US added 339,000 jobs in May, well ahead of the 190,000 predicted by analysts.
Meanwhile, vet products firm Dechra Pharmaceuticals has backed a £4.5 billion takeover offer led by Swedish private equity firm EQT.
FTSE 100 Live Friday
Dechra Pharmaceuticals backs £4.5bn takeover
Markets rally on US debt ceiling vote
Wizz Air passengers top 5 million in May
FTSE 100 closes higher but job numbers point to more hikes
16:45 , Simon Hunt
The FTSE 100 closed up 117 points to 7,607, ending the week in positive territory after US debt default uncertainty faded away.
But stronger-than-expected US employment market data has renewed City anaylst fears that there may be further interest rate rises ahead.
Neil Birrell, Chief Investment Officer at Premier Miton Investors, said: “Expectations of a rate rise have been flip-flopping this month, and the employment data has now shown a surprisingly large increase in payrolls. This may well flip markets back to pencilling in a hike.
“The Fed has said it is data dependent and what it reads into this is therefore crucial. This will undoubtedly give plenty of support to the more hawkish members of the Fed.”
Are the wheels coming off for Silicon Roundabout? Top tech bosses are divided
15:15 , Simon Hunt
When the UK’s competition regulator blocked Microsoft’s merger with Activision last month, some in the industry were not surprised. But what did raise an eyebrow was the tech giant’s heavy-handed response.
“This decision, I have to say, is probably the darkest day in our four decades in Britain,” Microsoft president Brad Smith blasted in an interview with the BBC. “It does more than shake our confidence in the future of the opportunity to grow a technology business in Britain than we’ve ever confronted before.”
But Microsoft isn’t the only firm to warn the tide is turning. Last month, the CEO of fintech giant Revolut, which has been waiting for two years to secure a banking licence, said he wouldn’t consider a listing in London because it “is not the business environment to operate in the modern world”, while on Wednesday, the founder of fellow London fintech LendInvest said he had quit the capital to start his next venture in Los Angeles, citing “the endless distraction of Brexit, Boris and the Liz Truss debacle”.
read more here: Top tech bosses speak to the Standard on London’s future
Stocks open higher on Wall Street after debt ceiling relief, but telcos worry over Amazon
14:40 , Simon Hunt
Stocks have made gains in the opening minutes of trade on Wall Street as investors breathed a sigh of relief following the US Senate waving through a bill to lift the government debt ceiling.
Shares were also buoyed by better-than-expected jobs data, which showed the US added 339,000 jobs in May, well ahead of the 190,000 predicted by analysts.
But shares in US telecoms companies fell amid reports that Amazon was exploring offering its own mobile services to its Prime customers in the US.
The S&P 500 opened higher by 19.99 points, at 4,241.01, while the Nasdaq gained 89.50 points to 13,190.48 at the opening bell.
Treasury yields rise after stronger-than-expected jobs data
13:44 , Simon Hunt
US treasuries rose after US jobs data came in stronger than expected.
The yield on benchmark 10-year Treasury notes was up 2 basis points to 3.628%.
Payroll data showed the US added 339,000 jobs in May, well ahead of the 190,000 predicted by City analysts.
But the US unemployment rate rose to 3.7% from an expected 3.5%.
Revolution sees hope in High Street sales revival
12:41 , Simon Hunt
STRUGGLING Revolution Beauty, whose shares have been suspended since September, claimed hope today from a customer return to the High Street.
It recently had problems with its accounts — auditors delayed their release and the shares were suspended.Today it reported in its interim results a 28% jump in stores thanks to a new deal with Boots and strong sales in Superdrug. Web sales were down 8% however.
In the US, sales held steady thanks to a new distribution deal with Walgreen. In general, US retailers are still recovering from the pandemic, it says.
Last year’s loss of £28.8 million was cut to £13.3 million, on overall revenues down 4% to £75 million.
Chief executive Bob Holt said: “The half was one where our digital business was impacted by consumers moving back to bricks-and-mortar retail stores post-pandemic, but where Revolution’s omni-channel retail strategy mitigated the decline, with solid retail performances in our key markets.”
The company hopes that the final publication of these results will be “an important step” towards the lifting of the share suspension.It has also made changes to the board and made certain parts of the business directly in the charge of the CEO and chief financial officer.
City comment: It’s still too much of a man’s world leading business
11:24 , Simon Hunt
When it comes to business it is still very much a man’s world, as our report reveals today.
Even in the metropolis less than one company in five is headed by a woman. Among fast-growth businesses the proportion is even lower, fewer than one in 10.
Over the past decade huge strides have been made in the level of female representation in Britain’s biggest and most visible companies, those that make up the FTSE-100.
For large quoted companies there is no hiding place if the boardroom is overwhelmingly pale, male and stale.
The piercing light that has been shone on FTSE-100 companies in recent years means that almost 40% of directors of the biggest blue-chip companies are women — although they still lag behind in the key C-Suite executive roles.
But only now, thanks to the work of the Gender Index, are we starting to see more detailed data on the hundreds of thousands of smaller enterprises that are the bedrock of the British economy.
There the female leadership voice is far more rarely heard — if the findings are to be believed. There is progress but it appears to be glacially slow.
This has to change for all sorts of reasons, not least the broader health of the economy. Finding the answers to the problem will not be easy as it lies deep in the culture of UK society. But as with the FTSE-100, identifying it is at least a good starting point.
Britain has a growth problem and its wealth creator pool needs to be deep and wide to make sure as many of the UK’s entrepreneurial talents as possible are engaged in taking the country forward to prosperity.
FTSE 100 higher as risk appetite improves, Ocado up 4%
10:17 , Graeme Evans
Investors who sold in May were today tempted into returning after the passage of the US debt ceiling bill through Congress.
The FTSE 100 index lost 5.4% last month, but June has started on the front foot after London’s top flight posted its second successive positive session.
The risk-on mood followed last night’s vote in the Senate, which puts the US debt ceiling issue on the backburner until early 2025 after weeks of default speculation.
Earlier comments from Federal Reserve policymakers suggesting they may pause interest rate hikes this month in order to assess economic trends also helped confidence.
Hong Kong’s heavily-sold Hang Seng rebounded 4% and European markets picked up the baton, aided by yesterday’s euro area inflation print showing a 15-month low of 6.1%.
The Frankfurt-based Dax rose 0.8% and the FTSE 100 index improved 57.35 points to 7547.62 as mining stocks Anglo American and Antofagasta put on 3%.
The resources sector was at the forefront of May selling after economic jitters left the price of a basket of commodities at its lowest level since August 2021.
Brent crude oil prices also weakened 8.6% but the benchmark today recovered a little to just below $75 a barrel as attention turns to the potential for a further production cut at this weekend’s Opec+ meeting.
The improved risk appetite meant investors sought out heavily sold stocks, led by grocery technology play Ocado after it jumped 4% or 13.2p to 365.6p at the top of the FTSE 100.
Rates-sensitive property trio Segro, British Land and Land Securities surged 3% and Asia-focused Prudential added 38p at 1129p following the Hang Seng’s strong session.
Defensive stocks including AstraZeneca, BAE Systems and Imperial Brands were out of favour, although their declines came in below 1%.
The FTSE 250 index rallied 1% or 186.64 points to 19,014.40 after the £4.5 billion private equity-led deal to buy Dechra Pharmaceuticals reawakened interest in the potential for other mid-cap takeovers.
Fast-fashion chain ASOS rose 13.9p to 355.9p and Tullow Oil lifted 1.1p to 25.5p but the gains have come too late to avoid relegation in the FTSE 250 reshuffle.
Issa brothers’ EG Group shifted £3 billion in debt prior to Asda merger, filings show
08:54 , Simon Hunt
EG Group shifted over £3 billion internally to settle debts in the US in the months leading up to the sale of its UK operations to Asda, the Standard understands.
In late January, the firm’s holding company bought shares in its financing subsidiary, EG Finco, in exchange for a £3.03 billion loan, filings released last month show. The following day, Finco declared a dividend to its parent company for the same sum, which it used to invest in its American subsidiary, thereby releasing it from its debt obligations.
EG Group declined to comment. There is no suggestion any individuals received cash as part of the transactions.
The transfers are the latest sign of the billionaire Issa brother’s drive to bear down on the firm’s billion-dollar debt burdens in the wake of soaring interest rates.
Mining stocks lead FTSE 100 higher, Dechra shares up 8%
08:39 , Graeme Evans
The FTSE 100 index has followed the lead of Wall Street and Asian markets by rising 32.12 points to 7522.39.
Mining stocks Anglo American, Antofagasta and Rio Tinto rallied 3%, with grocery technology business Ocado the top of the pile after a gain of 4% or 15.5p to 367.9p.
The mood has been boosted by the passage of the US debt ceiling bill through Congress, as well as comments from Federal Reserve policymakers suggesting they may pause rate hikes this month in order to assess economic trends.
The Hang Seng index in Hong Kong rose 4% after falling sharply last month, a move that helped Prudential shares to improve 24.5p to 1115.5p. Defensive stocks including GSK and SSE were out of favour, although their declines came in below 1%.
The FTSE 250 index rose 127.93 points to 18,955.69, led by Dechra Pharmaceuticals as its takeover deal helped to send shares up 8% or 378p to 3652p. That’s still below the offer price of 3875p, as well as the 4070p originally proposed before a profits warning by Dechra led to a downward revision by private equity bidder EQT.
Focus on US jobs reading, FTSE 100 seen higher
07:53 , Graeme Evans
The passage of the US debt ceiling bill through Congress yesterday helped boost sentiment after a challenging month of May for global stock markets.
The S&P 500 index closed 1% higher last night, while the FTSE 100 index finished 0.6% stronger amid improved trading by European markets after the flash CPI inflation reading for the euro area fell to 15-month low at 6.1%.
The next big test comes with this afternoon’s publication of US non-farm payrolls, which is one of the last big data releases before the Federal Reserve rates decision on 14 June.
A stronger-than-expected reading will fuel expectations that policymakers are not yet done raising interest rates.
Deutsche Bank is looking for a 200,000 increase in payrolls, compared with 253,000 the previous month and the consensus 190,000.
Strategist Henry Allen said: “Markets have been consistently taken by surprise by the jobs report over recent months, and the last 13 in a row have all seen the initial release for non-farm payrolls beat the consensus forecast on the day.”
In London, CMC Markets expects the FTSE 100 to open 22 points higher at 7512.
Wizz Air passengers top 5 million in May
07:28 , Simon Hunt
Passenger numbers for low-cost airline Wizz air climbed 22% to top 5 million in May, the firm announced today, as it continued on its rapid expansion.
The firm announced two new routes from London Gatwick airport to Prague and Hurghada and added new aircraft to its base in Poland.
Wizz Air said it had also trialled operating flights from Budapest Airport with a 37% blend of fuel produced from renewable waste and residue raw materials supplied by MOL, an oil and gas company based in Hungary.
Dechra backs £4.5bn private equity deal
07:24 , Simon Hunt
Dechra Pharmaceuticals is poised for a £4.5 billion takeover after the board of the vet products backed an offer led by Swedish private equity firm EQT.
The bid, which also involves the Abu Dhabi Investment Authority, values the FTSE 250-listed company at 3875p a share for a 44% premium to Dechra’s closing price prior to the bid interest being known in April.
Under the leadership of chief executive Ian Page, Dechra has grown into a global veterinary pharmaceuticals and related products business. It is ranked seventh globally by revenues, with operations in 26 countries and 2470 employees.
The Cheshire-based company listed on the London Stock Exchange in 2000 with a market value of £60 million.
