- FTSE 100 falls 27 points to 8,771
- WH Smith agrees to reduce price to sell High Street arm
- UK GDP was 0.7% in first quarter, second estimate confirms
- Prax Lindsey oil refinery goes into administration
4:45pm: FTSE 100 closes lower
The FTSE 100 finished the final day of Q2 trading 27 points lower at 8,771 points.
It was a different story on the other side of the Atlantic, where Wall Street saw record highs.
“A wide gulf has opened between European stocks and their US counterparts today, as the final trading day of the quarter arrives,” IG chief market analyst Chris Beauchamp said.
“While US stocks have Fed cuts and the likely passage of the budget bill to look forward to, European names continue to fret about a possible trade showdown with the US. It’s never wise to read too much into the movements at quarter-end, and the lack of news flow only compounds the problem.”
Looking back on Q2, Beauchamp described it as a “remarkable journey” for markets and investors alike.
“From the terrifying lows of April to the dizzying heights of the past week, the rebound has caught many by surprise,” he said. “As we head into Q3, investors are still fretting about inflation and a possible recession, but these threats seem much less imposing than they did three months ago.”
3.55pm: Blue-chips set to end in the red
The FTSE 100 looks set to end the opening day of the week in the red, backed by lacklustre volumes. UK stocks uncoupled from their American counterparts, which opened in the green.
Stateside, there was a fresh sense of hope around trade deals, something Sir Keir Starmer locked in early with the White House and has largely been factored into London valuations.
Here, it is all about the pound, its relative strength and the impact it might have on exports.
Babcock International, the engineering group best known for maintaining the Royal Navy’s submarines, was among the blue-chip risers with analysts suggesting it looks set for a longer runway of growth following last week’s NATO summit.
Citi has upgraded its forecasts for the group, pointing to the UK Government’s new defence spending target of 3.5% of gross domestic product by 2035.
2.54pm: Wall Street opens higher
US stocks have opened higher, but not as much as futures were indicating.
The S&P 500 has notched a new all-time high anyway, climbing to 6,195 in early trading but easing off slightly to a 0.2% gain.
Similarly, the Nasdaq 100 jumped to just under 22,655, a new peak, while the Nasdaq Composite is up 0.2%.
The Dow Jones is up 0.4%, holding onto its initial gains.
2.20pm: Support for refineries proposed – report
The UK government is looking at state support for the country’s oil refineries, following the collapse of the Prax Lindsey site in Lincolnshire today.
Energy Secretary Ed Miliband wants to devise a mechanism for refineries to become eligible for the Energy-Intensive Industries Compensation Scheme, Sky News has reported.
Refineries are currently excluded from the EIIC scheme.
Having trumpeted support on energy costs for thousands of manufacturing businesses as part of the industrial strategy launched last week, Miliband’s move could extend financial support to the sector.
Compulsory liquidators were appointed at Prax Lindsey today.
1.19pm: US-EU talks to resume
The European Commission’s trade delegation arrives in Washington DC today as talks on a US tariff deal continue ahead of Donald Trump’s 9 July deadline.
Sectors in focus include automotives, steel, semiconductors and pharmaceuticals, some of which have already been hit with tariffs and threats.
Earlier, an EC spokesman suggested that Europe is not looking to give any allowances on its Digital Markets Act in return for US concessions.
12.52am: US stocks called higher
US stock futures are pointing higher, while European markets continue to train in the red.
Despite a better start at the open, European shares began to drift lower following “a clutch of second order UK and Eurozone data out this morning, which veered towards the negative when compared to expectations”, says market analyst David Morrison at Trade Nation.
“A look at the charts of the UK and European majors shows a continuation of the sideways consolidation which began in May.
“This morning’s relatively muted tone reflects investor caution ahead of key economic releases later in the week, particularly US Non-Farm Payrolls. While sentiment remains positive, trading volumes are likely to be light as traders wait for more decisive market-moving catalysts.”
The US dollar remains under pressure, with the DXY dollar index continuing to trade around lows last seen in February 2022.
The S&P 500 and Nasdaq 100 are set to notch new all-time highs, up 0.4% and 0.6% respectively, with futures for the blue-chip Dow Jones up 0.5%.
12.02pm: FTSE flat
The FTSE 100 is back to flat.
The leaderboard looks like this:
- Rolls-Royce Group PLC +2%
- Imperial Brands PLC +1.6%
- Coca-Cola HBC AG 1.3%
- Auto Trader Group PLC 1.3%
- Sage Group (The) PLC 1.2%
- Smith & Nephew PLC 1.0%
- RELX PLC 0.9%
- DCC PLC0.9%
- BAE Systems PLC 0.7%
- Admiral Group PLC 0.7%
Oil heavyweights Shell and BP continue to weigh though, along with big pharma and big banks.
11.55am: UK financial services shake-up
Earlier today, the UK financial regulator launched a “once-in-a-generation” shake-up aiming to address the long-standing “advice gap” in the UK.
The Financial Conduct Authority said it would allow investment platforms – the likes of HL, interactive investor, AJ Bell and Vanguard – to make generic suggestions to consumers without having to meet all restrictions involved in providing personalised financial advice.
Many pension savers will now be able to access “targeted support” under the new rules to help individuals get better returns on their savings and investments.
Industry experts noted that just 9% of UK adults received regulated financial advice in the past year.
“The FCA now needs to provide clarity on implementation, ensure appropriate safeguards, and maintain a sharp focus on helping people engage meaningfully with their long-term finances,” said Brian Byrnes, head of personal finance at Moneybox.
He said today’s change, plus the much-anticipated review of the UK’s ISA regime and the next phase of the pensions investment review, each have “the potential to transform how people engage with their money”.
Callum Pirie, director at Houlihan Lokey, said the shift “could also drive increased M&A activity” among financial services firms with smaller average client portfolios.
“Historically, these books have been seen as less attractive acquisition opportunities for larger platforms. Now, with a more scalable and commercially viable service model on the table, we expect growing interest in consolidating these segments.
“We could well see a ‘land grab’ for smaller client books, especially from firms that are equipped to offer digitally enabled, lower-touch advice to clients who are comfortable with less traditional delivery models. Those able to scale such propositions quickly will be best placed to capitalise on the opportunity.”
11.30am; Dedicated followers of fashion
Burberry was in demand after a brief note from UBS suggested the turnaround for the luxury brands is continuing to gain pace.
The Swiss bank repeated its ‘buy’ recommendation and 1,400p price target. In late morning trade, the stock was up 4% at 1,196p.
Turning to the wider market, the FTSE 100 remained in the red, with a stronger pound putting pressure on exporters.
10.08am: Polar heads north as CEO departs
Polar Capital Holdings PLC (AIM:POLR) shares have risen 4.5% after the asset manager reported core profits ahead of estimates and a maintained dividend, a strong finish as CEO Gavin Rochussen announces his retirement after eight years at the tiller.
Rochussen will depart in September, with Iain Evans, Polar’s global head of distribution, appointed as CEO designate.
Analysts at Peel Hunt say core operating profits were ahead of expectations, and AUM “has begun to recover since the period end”, with the balance sheet strong too.
“We raise our AUM forecasts, which underpin a modest upgrade to core profit expectations.”
Elsewhere, shares in Victoria PLC (AIM:VCP) are up 7% after the carpet maker bagged a new £130 million bank borrowing facility and said talks about its upcoming bond maturities are “well advanced and continue to progress positively”.
The ‘super senior facility’, which combines term loans and revolving credit elements, is “a significant step forward in the company’s plan to strengthen its financial position and address its near-term debt maturities”.
Shares in Celadon Pharmaceuticals have dropped 17% after the UK-based cannabis medicines company said it would miss the deadline to file its annual accounts, triggering a trading suspension from 1 July.
The company also signalled its intention to delist from London’s junior AIM market following a fresh £1 million secured loan, part of a wider funding effort that includes talks over a possible £20 million convertible loan
9.17am: Bubble warning
The FTSE 100 has slipped into the red, and its the only one of the big European benchmarks not to be in green.
Oil giants Shell and BP are both lower, which is hitting the London index, as oil prices dropped this morning, with Brent crude hitting $66 but creeping higher.
Elsewhere in the Footsie top 10 largest companies, AstraZeneca, HSBC, Rio Tinto and GSK are also in the red.
With US and European stocks at or near highs, market analyst Neil Wilson at Saxo looks at sector differences.
European defence has got a lot of attention, see recent highs for BAE and Rolls, but “check the banks”, he says.
Barclays hit a 15-year high though Bank of America still says it’s the “cheapest” among peers, while Deutsche Bank hit a decade high and JPM notes there are still “several bottom-up drivers for the business going forward”.
Wilson also highlights a BofA note pointing to “bubble risk” in the second half.
The US investment bank’s strategists say they are staying “overweight” on their BIG basket of Bonds, International, Gold, and are “happy cyclical buyers” of US Treasury bonds, with the explanation that “US macro slowing, Fed will cut, yields will fall… only risk for bonds = equity bubble”.
They are flipping from the US to EU/China based on “fiscal excess” and as the exceptional secular outperformance of US compared to international stocks is “over”, with gold seen as the “best hedge of coming US$ bear market”.
“Tactically BofA trading rules nearing sell signals, but bubbles ignore trading rules,” the strategists say, unless US non-farm payrolls come in really low, ie below 100K, and/or long-dated bonds rise above 5%, then “H2 bubble risk [is] high as Trump/Powell pivot from tariffs to tax cuts/rate cuts to incite US$ devaluation/US stock bubble (NDX rip toward 30k) as cure to reduce US debt burden via boom”.
9.11am: UK businesses not quite as pessimistic as they were
Private sector companies expect activity to fall at a firm pace in the third quarter, which starts tomorrow, though expectations are less negative than they were a month ago.
This is according to the CBI’s latest ‘growth indicator’, which has been relaying pessimism from its members since late last year (following a grumpy business reaction to the budget).
Alpesh Paleja, CBI deputy chief economist, said: “While negative expectations for activity have eased a little, our surveys still point to challenging conditions for businesses.
“Firms cite a very mixed picture on activity: while there are pockets of strength in the economy, it’s clear that sizeable headwinds to growth remain.”
Paleja said the recent Industrial Strategy “does address some of the more immediate headwinds to growth: notably, delivering competitive energy prices and easing access to talent are steps in the right direction”.
8.58am: Trump stories
One of the stories from over the weekend is that Donald Trump said he has found buyers for TikTok‘s US operations.
The US President did not name the group, describing them only as “very wealthy people”.
The sale would require approval from China and President Xi Jinping, the US President noted during a TV interview.
ByteDance, TikTok’s Chinese owner, has resisted pressure to sell since the Trump administration first raised the issue over national security concerns, with a divestment deadline recently extended by another 90 days.
This morning, Trump’s social media output are focused on Iran, where he is denying reports that he has offered concessions and reiterated his insistence that Iran’s nuclear facilities have been “OBLITERATED”.
Inflation (“costs down, very substantially, for the American Consumer”) and the One Big Beautiful Bill (“moving along nicely”) are also the subjects other 3am posts.
Trump’s bill passed a vote to allow further debate in the US Senate with a 51-49 vote, with one Republican Senator against the bill announcing he will not run for re-election. Votes on amendments to the bill continue today.
Washington saw a “drama filled weekend of horse trading”, before the bill goes back to the House for final approval.
President Trump wants it done by Friday’s holiday, and, says Jim Reid at Deutsche Bank: “At that point attention will swiftly focus to the July 9th deadline extension for reciprocal tariffs.
“Indeed you’ll probably get headlines build up this week and the risk to the market is that with the S&P 500 hitting a new record high at the end of last week, with Treasury yields more becalmed, and with a new tax cutting bill, it’s possible that the Trump Administration feels emboldened to be aggressive again.”
Last week, Washington announced that they were stopping trade talks with Canada in retaliation for their digital service taxes and that new tariffs would be launched within a week, but last night Canada dropped this tax to enable talks to restart.
8.28am: Smiths and FirstGroup down
WH Smith PLC (LSE:SMWH) shares have dropped over 7% after it agreed to knock down the price to sell its High Street business.
The expected gross cash proceeds of up to £40 million are “not too much lower” than the original announcement of £52 million, says independent retail analyst Nick Bubb, with buyer Modella soon to change the name to TG Jones.
“At least it didn’t pull out completely,” he adds, with Modella having agreed to buy the struggling High Street business back in March.
Elsewehre, FirstGroup PLC (LSE:FGP) shares are down 2.1% after a report in the Financial Times highlighted that the Department for Transport has written to the Office of Rail and Road (ORR) to place pressure on the independent regulator to limit how many of the applications are approved for new Open Access rail services (including a number by FirstGroup).
Analyst Gerald Khoo at Panmure Liberum says his view, the DfT’s letter “should be viewed as a monopolist opposing competing new entrants, which are permitted under the relevant legislation, subject to satisfying criteria set by the ORR”.
8.15am: FTSE 100 inches higher at open
The FTSE 100 has opened 13 points higher at 8,811.78, with defensive stocks to the fore.
Leading the risers are defence & aerospace sector names, including Babcock, Rolls-Royce and BAE Systems, along with gold miners and tobacco companies.
British Gas owner Centrica, asset manager Intermediate Capital Group and credit checker Experian are bottom of the list.
ICG (LSE:ICP) has been downgraded by UBS, where analysts said the shares offer “resilient earnings backed by strong fundraising, but near-term headwinds lead us to downgrade to Neutral with a revised price target of 2170p”.
7.59am: UK GDP confirmed
UK economic growth for the first quarter is estimated to have grown by 0.7%, unrevised from the first estimate from the Office for National Statistics.
Economists said some cracks were starting to emerge, which means growth is likely to have slowed in the second quarter.
“While overall quarterly growth was unrevised, our updated set of figures show the economy still grew strongly in February, with growth now coming in a little higher in March too,” says ONS director of economic statistics Liz McKeown.
“There was broad-based growth across services, while manufacturing also had a strong quarter.
“The saving ratio fell for the first time in two years this quarter, as rising costs for items such as fuel, rent and restaurant meals contributed to higher spending, although it remains relatively strong.”
There appears, says economist Matt Swannell at the EY ITEM Club, to be “problems with residual seasonality in the data which is making the early part of the year look artificially strong”.
The first quarter was boosted by a strong increase in aircraft investment, which is likely to unwind, he says, while some business “appears to have been brought forward to beat changes in US trade policy”.
On the saving ratio, he says: “A feature of the last year was that households preferred to save rather than spend a lot of their real income gains. A saving ratio of 10.9% in Q1 was far higher than usual, although it was a fall of 1.1ppt from Q4.
“With earnings growth slowing and inflation set to rise, growth in real income looks set to slow across the rest of this year, but with scope for households to save a little less, there is space for consumption to be cushioned from this slowdown.”
7.51am: Deal was ‘no longer deliverable’ in prior form
This is WH Smith’s explanation for why it agreed to lower the price of its High Street business to Modella.
“Following the agreement and announcement of the sale, the future of the High Street business under a change of ownership has led to a more cautious outlook amongst stakeholders.
“This, combined with a period of softer trading, has resulted in a reduction in the ongoing cash flow of the business. Consequently, Modella has recently sought amendments to the construct of the transaction.
“Having reflected carefully on the options and alternatives and, in particular, the value to the group and its shareholders of ensuring a successful completion of the transaction, the group entered into negotiations to establish revised terms for the Transaction given the original agreement was no longer deliverable.”
7.39am: WH Smith agrees knock-down price for sale of High St business
WH Smith PLC (LSE:SMWH) has completed the sale of its High Street business at a lower price, after a period of softer trading led private equity buyer Modella Capital to seek “amendments” to the deal.
In all, a price of £40 million has now been agreed, down from the original £52 million cash deal, which was hoped to reach £76 million once all costs were accounted for.
Under the revised terms, WH Smith has received an upfront consideration of £10 million on completion, with up to £20 million of deferred consideration whereby both WH Smith and Modella equally share in the cash flow generation of the business to August 2026.
7.27am: UK house prices
UK house price sales activity continues to run at the fastest rate for four years, according to Zoopla, though house price growth slowed 1.4% on a year-on-year basis.
There are more homes for sale, with the number of homes for sale increasing 14% compared to a year ago, which the research suggests is limiting price growth as it boosts buyer choice.
Affordability is also a drag on prices growth in higher priced markets such as inner London and pockets of the south where there are modest house price falls of 0.%.
The average time to sell a home is 45 days, although over a fifth of homes have been on the market for over six months without achieving a sale.
7.16am: FTSE 100 expected to start week higher, last day of H1
The FTSE 100 has been called higher at the start of the week, the last day of the first half of the year.
London’s blue-chip index is seen rising around six points on the futures market, having had an up-and-down past week and month that has left the index slightly higher on both accounts at 8,798.91. Last week saw a gain of just over 24 points, roughly the same since the end of May.
Across the Atlantic, the S&P 500 hit a fresh record high on Friday, along with another for the Nasdaq 100, while the Dow Jones reached its highest levels since March.
Today is a big day for UK-based car manufacturers, with shipments heading for the US as the trade deal with Washington kicks in.
The week will see a focus on central banks, with a forum on central banking starting today in Sintra, Portugal and running through to Wednesday, with figures including the Federal Reserve’s Jerome Powell, ECB’s Christine Lagarde, Bank of England’s Andrew Bailey and others.
It’s a holiday-shortened week for Wall Street, due to the Independence Day holiday on Friday, which means a rare Thursday outing for the big non-farm payrolls data report.
Monday 30 June
Announcements expected:
Finals: eEnergy Group
Economic announcements: Zoopla House Prices (UK), GDP (UK), M4 Money Supply (UK), Mortgage Approvals & Consumer Credit (UK), Import Price Index (GER), Retail Sales (GER), Money Supply (EU), Chicago PMI (US)