GSK shares are today’s major focus after the drugs giant’s defence against Zantac claims suffered a setback in a Delaware court.
The FTSE 100 index is trading higher after Friday’s late rally by Wall Street markets was further boosted by this week’s prospect of an ECB interest rate cut.
Other companies in the spotlight today include FTSE 250-listed Hollywood Bowl, having posted an 11% rise in half-year profits.
FTSE 100 Live Monday
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GSK shares slide on Zantac ruling
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Hollywood Bowl posts strong results
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Hipgnosis bid improved by Blackstone
City Voices: AI fever risks torpedoing London tech
Monday 3 June 2024 16:34 , Simon Hunt
Whether you work at a centuries-old financial institution in the Square Mile, or a brand-new tech startup in Shoreditch, your office is probably feverishly discussing little else but AI.
The city has caught the deep learning disease. Multinational corporations, like Microsoft, are the vectors, setting up shop in the capital and whipping corporate London into a frenzy over neural networks, natural language processing, and machine learning.
Tech execs are racing to roll out AI as fast as possible. But they are trying to run before they can walk. If they don’t invest in the required talent and training first, then London’s tech sector will haemorrhage capital as rushed transformations, malfunctioning tech, and shaky consumer confidence rock firms.
This knee-jerk reaction from execs is understandable. Since ChatGPT leapt onto the scene, every tech firm is part of the AI arms race – whether they like it or not. And the pressure to keep up, whether it’s from investors, consumers, or the market at large, is acute.
This AI hype virus is highly infectious and dangerous…read more here
Volatility halts hit numerous NYSE-listed stocks in error
Monday 3 June 2024 16:16 , Bloomberg
An apparent glitch at the operator of the New York Stock Exchange triggered volatility trading halts shortly after the open in about a dozen companies, including Chipotle Mexican Grill Inc. and Abbott Laboratories.NYSE said it was having issues pertaining to the limit up-limit down trading bands, which typically govern when stocks are paused for volatility. The sudden disruptions come just days after a glitch last week left the S&P 500 Index without live pricing for an hour, and as the market adapts to quicker settlement times for US stock trades.“NYSE Equities is currently investigating a reported technical issue,” according to an online status page. “Additional information will follow as soon as possible.”
Ford managers to take industrial action over pay
Monday 3 June 2024 14:21 , Daniel O’Boyle
Ford managers at sites across the country will begin industrial action later this month in a dispute over pay.
Members of Unite at sites including Dunton, Stratford, Dagenham, Daventry and Halewood will begin working to rule and an overtime ban on June 14, with strikes threatened if the dispute is not resolved.
The workers have rejected Ford’s pay offer, which Unite said was only a performance related merit award, which they are not guaranteed to receive.
Lunchtime update as GSK loses £7 billion
Monday 3 June 2024 12:39 , Simon Hunt
GSK now looks set to see as much as £7 billion wiped from its market cap by the end of the day as the stock tumbled more than 9% on Zantac litigation concerns.
Meanwhile JD Sports has continued its rally, up more than 7%, while Pershing Square is up on news a $1 billion stake has been sold.
Here’s a look at your key market data.
21% of new first-time buyers stretch mortgage terms for more than 35 years
Monday 3 June 2024 12:20 , Daniel O’Boyle
Around one in five new first-time buyers took out mortgage terms stretching beyond 35 years in the first quarter of this year, according to a trade association.
Some 21% of people taking their first step on the property ladder had home loans lasting for more than 35 years, UK Finance said.
The trend of longer-term mortgages is “further evidence of the ongoing affordability crunch”, as costs and house prices remain high relative to incomes, UK Finance said.
City Voices: What election result are global investors hoping for?
Monday 3 June 2024 11:26 , Daniel O’Boyle
The UK is one of those rare countries that enjoys a G7 status, boasts an important economy, the global language, and is home to one of the world’s largest financial centres.
Many of the worlds important investors are graduates of British universities. In what is possibly a perversion of history, this fourth of July the world’s uninterrupted attention will be on Britain.
But what is the outcome the markets will be looking for? Read George Lagarias’ view here
UK manufacturing sector bounces back into growth as optimism hits two-year high
Monday 3 June 2024 10:18 , Daniel O’Boyle
The UK’s manufacturing sector sprung back into growth in May as levels of production surged and business optimism hit a more than two-year high.
The closely watched S&P Global/CIPS UK manufacturing PMI survey rose to 51.2 in May, after falling back to 49.1 in the previous month.
Any reading above 50 means a sector is in growth, while a score below this means it is contracting.
FTSE 250 sets pace as FTSE 100 rally fades, JD Sports up 8%
Monday 3 June 2024 10:04 , Graeme Evans
London’s FTSE 250 index is up 0.8% or 168.71 points to 20,898.83, making it one of Europe’s best performing benchmarks.
The FTSE 100 lifted 0.2% or 17.33 points to 8292.71, having initially surged 0.8% on a strong handover from Wall Street and robust figures from China’s manufacturing sector.
The best FTSE 100 stock was by JD Sports Fashion, which recovered Friday’s results-day weakeness with a rise 8% or 9.65p to 137.15p.
Rolls-Royce shares also continued their strong run by adding 2% or 10.2p to 463.6p while NatWest advanced 6.2p to 321.2p.
Heavyweight stocks BP and Shell rose by 1% after the decision of OPEC+ to extend production cuts into next year kept the Brent Crude price above $81 a barrel.
Oil field services business Hunting led the FTSE 250 with a jump of 7% or 28p to 445.5p, with Pets at Home not far behind after a gain of 17.6p to 313.8p. Aston Martin Lagonda rose 5% or 7.2p to 152.4p.
Monzo turns a profit
Monday 3 June 2024 09:51 , Bloomberg
Monzo Bank reported its first annual profit after more than doubling its revenue last year, though it made provisions for bad loans worth more than a tenth of its lending book.
The British mobile bank posted a pretax profit of £15.4 million for the 13 months through March compared to £116 million loss a year earlier, with revenue jumping to £880 million.
The firm lent £1.4 billion to its customers during the year — a rise of 84% — while also increasing its credit loss expenses 75% to £177 million. Overdrafts and its Monzo Flex credit drove the rise. The bank said it’s “regularly taken steps to update our credit underwriting in light of loss experiences.”
Hollywood Bowl proves UK success overseas
Monday 3 June 2024 09:44 , Simon Hunt
Hollywood Bowl today cemented its position as one of the few London-listed business to have pulled off a successful North American expansion after strong growth in its Canadian operations helped the FTSE 250 constituent up its dividend.
The Hemel Hempstead-based business, which acquired Canadian bowling chain Splitsville in 2022, today said it had seen 47% revenue growth in the country following a string of acquisitions, with a new site due to open in Waterloo, Ontario later this month and two new centres in the pipeline.
Hollywood Bowl CEO Stephen Burns told the Standard: “The approach we made was to acquire a Canadian business and a Canadian management team.
“We haven’t tried to impose too much of the UK ways of working – we spent two years getting under the consumer mindset as well as how the business operates in Canada.”
Hollywood Bowl increased its dividend by 22% to just under 4p, with overall revenues at the firm up 8.1% to just under £120 million for the six months to end March, and pre-tax profits up 10.5% to £29.5 million. Shares rose 1.4% to 337p.
JD Sports leads the way as GSK tumbles: Market data
Monday 3 June 2024 09:12 , Simon Hunt
One hour after markets opened in London, shares in JD Sports are leading the FTSE 100, with the stock up around 7%, while pharma giant GSK has seen billions of pounds wiped off its market cap.
Here’s a look at your key markets data.
GSK to appeal against US ruling that Zantac cases can go to US court
Monday 3 June 2024 08:32 , Michael Hunter
FTSE 100 drugmaker GSK has pledged to appeal against a US court ruling that will allow the courts to hear series of cases claiming its Zantac heartburn pill can cause cancer.
A judge in the state of Delaware last week said over 70,000 such cases could go forward, with expert witnesses allowed to testify over the link claimed by the people who brought the cases. They centre on the stomach acid reducing drug ranitidine, sold as Zantac.
GSK said today that it would appeal, and said what it called “the scientific consensus is that there is no consistent or reliable evidence that ranitidine increases the risk of any cancer and GSK will continue to vigorously defend itself against all claims”.
GSK sinks but FTSE 100 makes progress
Monday 3 June 2024 08:32 , Graeme Evans
GSK shares have fallen 10% in response to Friday’s Zantac court ruling in Delaware, down 172p to 1594.5p.
Other blue chips are higher thanks to Wall Street’s strong handover and on expectations that the European Central Bank will cut interest rates this week.
The FTSE 100 index is up 59.42 points to 8334.80, with Taylor Wimpey, Tesco and Marks & Spencer among the stocks up by more than 1%.
In contrast to the GSK performance, AstraZeneca shares have risen 74p to 12,264p.
GSK shares tumble 10% after US judge allows Zantac cancer claims trial
Monday 3 June 2024 08:31 , Michael Hunter
Shares in GSK tumbled almost 10% in opening trade this morning.
The slump came as the stock market got its first chance to react to news that a US judge cleared the way for courts to hear a series of claims that links its Zantac drug with cancer.
The shares fell 10% to 1,590p. It was the biggest single fall of the morning on the FTSE 100, at 10%.
GSK said it would appeal over the decision, which covers its ranitidine pill, sold as Zantac. . It added:
“The scientific consensus is that there is no consistent or reliable evidence that ranitidine increases the risk of any cancer and GSK will continue to vigorously defend itself against all claims”
Chill Brands shares suspended amid insider trading probe
Monday 3 June 2024 08:03 , Daniel O’Boyle
Shares in vapes business Chill Brands have been suspended amid an ongoing insider trading investigation into its boss.
Chill Brands suspended its CEO Calum Somerton in April as it launched an internal investigation into “the use of insider information”.
Today Chill said its board is “unable to currently provide the market with an accurate update of its financial and trading position”.
As a result, its shares will be suspended from today.
The shares closed at 2.15p on Friday, down almost 98% from their peak in 2021. That values the business at just under £11 million.
On the day he was suspended, Somerton posted a statement on X.com, saying “I am surprised and disappointed by the allegations made against me, which I believe are without merit. I am confident that I will be vindicated. I will avoid further comment at this time to allow the process to progress.”
Blackstone ups Hipgnosis bid slightly as it switches offer to scheme
Monday 3 June 2024 07:53 , Daniel O’Boyle
Private equity giant Blackstone has upped its offer for music the Hipgnosis Songs Fund from $1.57bn to $1.58bn after incurring lower-than-expected adviser fees.
The US-based buyouts behemoth won a drawn-out bidding war with privately held music investor Concord earlier this year, with the Hipgnosis board accepting a $1/30 per share offer.
However today, Blackstone increased the price to $1.31, which “in part reflects Hipgnosis incurring lower adviser fees in respect of the transaction than previously expected”.
The deal will switch to a scheme of arrangement, which will need the approval of 75% of shareholders instead of 55%, but then becomes binding across all investors if it reaches this threshold.
Hipgnosis owns the rights to hits by artists including Beyonce, Ed Sheeran and Shakira.
FTSE 100 seen higher after US rebound, Hang Seng up 2%
Monday 3 June 2024 07:23 , Graeme Evans
A late rally for US markets on Friday has boosted today’s trading prospects, with FTSE 100 futures pointing to a jump of about 1% or 80 points to 8354.
The turnaround on Wall Street saw the tech-led Nasdaq Composite go from 1.75% lower to finish flat while the Dow Jones Industrial ended up 1.5% higher.
The fightback followed signs in personal spending data of a weaker US consumer, figures that boosted the timeline for lower US interest rates.
Asia markets have extended the momentum in trading this morning, with Hong Kong’s Hang Seng index up 2%.
In commodities, Brent Crude is near to $81 a barrel today after OPEC+ yesterday extended its production cuts into next year
Hollywood Bowl ups dividend after profits growth
Monday 3 June 2024 07:23 , Simon Hunt
FTSE 250 constituent Hollywood Bowl has upped its dividend again after another period of strong revenue and profits growth.
The divi will rise 22% to just under 4p after sales for the six months to the end of March rose 8% to £120 million and pre-tax profits climbed just under 11% to £30 million.
CEO Stephen Burns said: “We continue to expect further, modest like-for-like growth, even with the very strong prior year comparative, as a result of our customer-led innovation and investment in our profitable growth strategy.
“We are confident in the outlook for Hollywood Bowl and in our ability to capture the longer-term opportunity to grow our estate to over 130 centres in the next ten years.”
Recap: Friday’s top stories
Monday 3 June 2024 06:47 , Simon Hunt
Good morning from the Standard City desk.
UK stock markets outperformed European peers on Friday as fresh data from the US showed inflation in the world’s largest economy was continuing to cool.
The FTSE 100, which is largely internationally-focused, moved 44.33 points higher, or 0.54%, to close at 8,275.38.
The top UK index was boosted by gains for utilities companies, with National Grid, Centrica, Severn Trent and United Utilities among the biggest risers of the day.
It was a busy day for global economics news with new inflation data coming from the US, Eurozone and France on Friday.
Across the pond, the Federal Reserve’s preferred inflation measure remained unchanged last month, while the core personal consumption expenditures (PCE) index slowed during April.
Here’s a summary of our top headlines from Friday:
HMT in surprise sale of £1.2 billion of NatWest shares back to the bank to reduce Govt stake to 22.5%. Comes after scrapping of “Tell Sid” mass market offer
JD Sports bounces from a dire January profit warning – but profits for the year missed the £1 billion earlier hoped for at £917 million.
Nationwide says wage growth and low inflation is giving the housing market a modest Spring boost with prices up 1.6% year on year
Revolution Bars warns it will go bust by the end of the summer if an emergency fund raiser is not successful
CMA begins investigation of Nationwide’s bid for Virgin Money