FTSE 100 Live: Stock Set for a Strong Week; Tesco offers inflation hope

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The Tesco chief offers a cautious hope that inflation is subsiding

Tesco boss Ken Murphy offered cautious hope on the cost of living, saying he saw “encouraging early signs” that inflation was starting to ease.

But while noting the supermarket’s recent cut in milk and pasta prices, he said the journey to slowing price growth is “not all straightforward,” with prices still rising rapidly for most commodities.

“We are well aware that many of our customers continue to face significant cost-of-living pressures, and we have led the way in lowering the prices of everyday essential items,” he said. “There are encouraging early signs that inflation is beginning to abate across the market and we will continue to work tirelessly to ensure customers receive the best possible value at Tesco.”

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The competition watchdog approves Amazon’s £1.3bn takeover of the robot maker

The competition watchdog has given digital giant Amazon the thumbs up for buying a major maker of automatic vacuum cleaners.

The $1.7bn (£1.3bn) deal between Amazon and iRobot Corporation will now be allowed to proceed in the UK following the Competition and Market Authority’s decision.

It investigated concerns that the purchase would exacerbate competition in the market for robotic vacuum cleaners.

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1686914758 Banks raise interest rates again amid more mortgage pain

Mortgage rates jumped again on Friday adding pressure to anxious homeowners and first-time buyers.

The average price on a two-year deal jumped to a limit of six percent, up from 5.92 percent to 5.98 percent. In five-year repairs, the average rate has increased from 5.56 percent to 5.62 percent, according to the latest figures from analysts Moneyfacts.

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1686908081 – Ocado rises in strong FTSE 100 session, AO World rally continues

A strong delivery from Asia and Wall Street on hopes of US interest rates nearing their peak sent the FTSE 100 up 0.7%, or 57.35 points, to 7,685.61.

Improved risk appetite boosted technology and growth-focused stocks as Ocado ended the week strong with a gain of 15.5 points to 445.5 points and Auto Trader adding 8.6 pence to 646.2 points. British Land’s latest session in the FTSE 100 saw stocks improve by 5.3 points, to 340p.

Investors also supported Persimmon homebuilder, rising 19 points to 1,201 points in a session when Barratt Developments shares fell 4.7 pence to 443.5 points.

The FTSE 250 rose 84.27 points to 19,123.68, led by cybersecurity firm Darktrace, after shares jumped 10%, or 29.4 points, to their highest level this year at 336.2p.

Mid-cap investors also moderated electricity chain Currys, up 0.6p to 52.2p after it said selling its Greek division Kotsovolos was an option as part of a strategic review.

Among smaller companies, Mears jumped 5%, or 13.6 points, to 276.6 points after the affordable housing services provider forecast annual earnings ahead of Citi’s forecast.

AO World rose another 3.1p to 84.3p as it emerged this morning that Sports Direct owner Frasers Group now owns a 21.3% stake, up from the 18.9% disclosed on Monday when the two companies unveiled a strategic partnership.

Shares of Bolton-based AO World ended the week up more than 20%, similar to the rally ASOS made after Frasers yesterday revealed a 10.6% increase.

In the day’s final session before its drop from the FTSE 250, ASOS added 17.1p to 393.5p as sentiment in ex-stocks also benefits from signs of a turnaround progress after a better-than-expected trading update.

Fraser Group, whose shares have fallen recently, is back in formation, up 2%, or 16p, to 700p near the top of the FTSE 100.

1686907220 The public believes that inflation will fall to only 3.5% next May

The public is optimistic that inflation will decrease soon, and prices are expected to increase by only 3.5% in May 2024.

The Bank of England’s survey of 2,200 adults found the median forecast for inflation next year to be 3.5%, down from 3.9% in a version of the survey conducted in February.

The outlook for 2025 has also been improved, with the public expecting inflation to be just 2.6% – close to the Bank of England’s target of 2% – by this point.

The survey eased gold markets, with the average yield on two-year gold treasuries falling back from a 15-year high reached earlier today.

1686904735 Bill Hunt says the London IPO is ‘virtually closed’

The city’s deal-making drought has “effectively shut down the IPO market” in London according to broker and investment bank Peel Hunt today, turning into an annual loss.

With no company floating on the stock exchange, the broker and mini-investment bank revealed that the number of capital market transactions it worked on fell to 27 from 46 a year earlier.

This slowdown helped kill profits. The Liverpool Street Foundation reported a loss of £1.5m for the 12 months to 31 March 2023, down from profits of over £41m last year. Revenue fell to £82.3m from £131m, down more than 37%. You will not pay annual dividends.

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1686901320FTSE 100 Up But Tesco Shares Drop, ASOS Tops FTSE 250

Strong delivery from Asia and Wall Street meant that the FTSE 100 rose 31.11 points at 7,659.37, building on yesterday’s 25-point improvement.

Frasers Group is the best-performing stock after owner Sports Direct rose 2%, or 15.5 points, to 699.5 points. Investors also supported Persimmon, which rose 22p to 1204p in a session when other homebuilders including Barratt Developments were lower.

Tesco shares fell 2.2p to 262.3p despite maintaining full-year earnings guidance in a trade update that showed UK and Ireland sales rose 8.8% on a like-for-like basis in the 13 weeks to May 27.

B&Q owner Kingfisher was also down 1%, or 2.2 points, to 233.8 points after Travis Perkins’ earnings warning today, whose shares fell 6%, or 55 points, to 811.8 points in the FTSE 250.

The UK-focused Level 2 index rose 47.73 points to 19,087.14, led by fast-fashion chain ASOS after rising a further 6%, or 22.6 points, to 399p.

Market snapshot of the day

Stocks opened slightly higher this morning, while gold yields continued to rise.

Take a look at the full market snapshot.

1686899708 The city considers 6% interest rates to be more likely than not

Traders in the city see 6% interest rates as more likely than not, as short-term gold bonds crept to another 15-year high.

The two-year Treasury yield is 4.92%, a rate not seen since 2008, as investors continue to expect higher interest rates. Three- and five-year gold bonds hit their highest levels in 15 years.

Meanwhile, swap markets indicate that there is a greater than 50% chance of interest rates hitting 6% early next year. This would be the Bank of England’s highest rate since 2000.

1686898873 Japan Keeps Interest Rate at -0.1%, Tokyo Stocks Close Higher

Japan’s ultra-loose monetary policy continues to contrast sharply with the rest of the world after today’s Bank of Japan maintained its short-term target interest rate at 0.1%.

The BoJ’s lack of change in approach comes despite core inflation surging to 4.1%, its highest level since the 1980s, after a long battle with deflation.

Policymakers believe inflation will slow later this year as they voted to maintain stimulus measures put in place to support Japan’s economic recovery.

The largely dovish attitude weakened the yen after meetings this week by the Federal Reserve and European Central Bank that boosted expectations of a rate hike.

Monetary policy remains a tailwind for stocks in Japan, with Tokyo’s Nikkei 225 index rising another 0.7% to close at its highest level in more than three decades.

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