The rejuvenated FTSE 100 index touched a new record today in a session when the focus turned to UK banking stocks.
Lloyds Banking Group kicked off the sector’s reporting season by posting a 28% fall in first quarter profits alongside unchanged full-year guidance.
Other companies in the spotlight today included Reckitt Benckiser, Jet2 and the Carex business PZ Cussons.
FTSE 100 touches new record as Reckitt rallies 4%, Lloyds lower
08:44 , Graeme Evans
London’s FTSE 100 index is 35.30 points higher at 8080.1, having set a new intraday record of 8084 early in the session.
The best performing blue-chip was Nurofen and Harpic business Reckitt Benckiser, which lifted 4% or 171p to 4421p following its trading update.
Rio Tinto added 158p to 5475p in a strong session for the mining sector, while BAE Systems rose 17.5p to 1357.5p and BP improved 6.6p to 529.7p.
Lloyds moved in the other direction, down 0.9p to 50.6p after a small miss on City expectations for net interest income in its first quarter update.
NatWest fell 2.5p to 283.3p ahead of its own figures on Friday, while the telecoms sector came under pressure following declines of 1% for BT Group and Vodafone.
The FTSE 250 index is 5.39 points lower at 19,794.33, with shares in Carex owner PZ Cussons up 7% or 6.2p to 100.8p after it announced a strategic review alongside its trading update.
Lloyds Bank says house prices to rise and mortgages to fall
08:43 , Daniel O’Boyle
LLOYDS Bank offered a boost to home owners and those trying to get on the property ladder today when it said prices will rise, but the cost of new mortgages will fall.
Its prediction that the Bank of England will cut rates three times by the end of the year – starting sometime in the summer – is consistent with earlier forecasts.
But it has changed its mind on house prices which it now expects to rise 1.5% this year, much better than a 2.2% fall previously predicted.
Reckitt Benckiser hit by currency ‘headwinds’
07:52 , Michael Hunter
The multinational maker of Nurofen painkillers and Vanish stain remover reported a drop in revenue due to what it called “FX headwinds”.
Reckitt Benckiser said there was a “net revenue decline” in the first quarter of 4.6%. with “like-for-like growth more than offset by FX headwinds of 5.7%”.
The £30 billion firm earns revenue in dollars and uses sterling as its reporting currency.
Kris Licht, CEO, said: “Following a period of price-led growth, we are now returning to a more balanced contribution from price, mix and volume. We grew volumes in many of our powerbrands in the quarter, including Lysol, Dettol, Durex and Finish”.
The numbers were in line with company expectations and it stood by existing targets for the full year.
“Too complex” PZ Cussons launches review
07:34 , Daniel O’Boyle
Soap maker PZ Cuzzons say plans to sell its St. Tropez self-tanning business, and is “evaluating strategic options” in Africa where currency changes have led to recent difficulties, as it says the group is “too complex for its size”
It comes as reported revenue plunged by 24% in the three months to 2 March, driven by more currency trouble. Like-for-like revenue was down a much more modest 3%.
The business continues to expects profits for the year to 2 June of £55m-£60m.
CEO Jonathan Myers said: “Today we are re-iterating our FY24 outlook, having delivered improved LFL revenue growth in Q3 on an improved volume trend. Nevertheless, the macro-economic challenges and complexities associated with operating in Nigeria are significant and there is much more to do to unlock the full potential of the business.
“As such, we have undertaken a strategic review of our brands and geographies and have embarked on plans to transform our portfolio, refocusing on where the business can be most competitive.
“The actions we are taking will crystallise value for our investors from assets better suited to alternative ownership structures. This will enable us to invest our resources in the key geographies and categories in which we can win and generate superior returns. We are transforming PZ Cussons into a business with stronger brands in a more focused portfolio, delivering sustainable profitable growth.”
Lloyds sees first quarter profits slip
07:34 , Simon English
LLOYDS Bank offered a “steady as she goes” take on the UK economy as it reported a 28% fall in first quarter profits to £1.6 billion.
With fears about rising mortgage costs – and therefore higher defaults – swirling, Britain’s biggest bank insisted it will keep supporting customers.
Lloyds shares have been in the doldrums for years. CEO Charlie Nunn said: “Guided by our purpose, we are continuing to support customers and successfully execute against our strategic outcomes… This underpins our ambition of higher, more sustainable returns that will deliver for all of our stakeholders as we continue to Help Britain Prosper.”
There was an impairment charge of £57 million compared to loans of £448 billion. There was less mortgage lending in the quarter than in the prior period.
It reassured the City by saying results this year would be in line with expectations, though profit margins will fall to 2.9% from 3.22%.
Lloyds shares open today at 51p. They are down 18% over five years.
The bank has set aside £450 million to deal with a City watchdog investigation into car loans.
FTSE 100 heads for new record as US recovers, Tesla shares set to bounce
07:19 , Graeme Evans
The FTSE 100 index is set for a new record after futures trading showed the rejuvenated benchmark heading for a rise of 0.6% or 51 points to 8095.
The momentum follows more signs the US market is over last week’s tech sector wobbles, with shares in chip giant Nvidia up 4% and the Nasdaq Composite 1.6% higher.
The S&P 500 index closed up by 1.2% ahead of results later this week by Meta Platforms, Microsoft and Google parent company Alphabet.
Tesla shares are expected to jump later today after first quarter results included a pledge to accelerate the launch of more affordable vehicles.
Revenues fell for the first quarter since 2020 and net income also dropped sharply. Tesla shares are down by 42% this year but traded as much as 13% higher in dealings after last night’s closing bell.
Recap: Yesterday’s top stories
06:50 , Simon Hunt
Good morning from the Standard City desk.
The London stock market powered on to a new all-time high this morning on growing confidence that the Bank of England will start cutting interest rates this summer.
The FTSE 100 index of leading company shares jumped to a new intra-day record of 8,076, up 53 points in early trading, before settling back a little.
The new benchmark comes hard on the heels of a strong session yesterday when the FTSE 100 ended at a closing high of 8,023, 128 points higher. The mood of optimism was further boosted by strong PMI business survey numbers showing output growing at its fastest rate since May 2023.
Here’s a summary of our top stories from yesterday:
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Deficit hits higher than forecast £11.9 bn in March leaving Hunt with little scope for big pre-election tax cuts
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JP Sports spends £878 million on Alabama based sportswear chain Hibbett
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Primark owner ABF hails strong results as the clothes to foods giant made profit in the first half of the year of £881 million, a rise of 37%. Primark sales and margins boosted by prolonged cold wet weather.
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London tech venture capital firm Molten Ventures says all the companies it backs want to float in the US rather than over here
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The strife in the UK funds sector continued today as Jupiter Fund Management said it saw outflows of £1.6 billion as nervous clients yanked money from the stock market
