FTSE 100 live: Blue-chips slide into red, Treasury sells down ...

7.59am: Brave bid rejected 

Digital marketer MISSION Group (LSE:TMG) has rejected a possible all-share bid from acquisitive fellow small cap Brave Bison (AIM:BBSN).

Brave Bison (AIM:BBSN) proposed a deal that values MISSION shares at 29.04p apiece, compared to a closing price of 22.7p at the end of last week, based on an exchange ratio of 11.5 Brave Bison shares for each ordinary share in MISSION.

MISSION said it received the unsolicited conditional proposal regarding a possible offer on 29 April and unanimously rejected it last Wednesday, 8 May, which it "believes to be opportunistic and significantly undervalues the group and its prospects" as well as being dilutive to its shareholders.

MISSION's share price had fallen over 70% in the past three years to a low of 10p in the autumn after it sounded the earings alarm and cancelled its dividend in the face of difficult trading conditions. 

7.33am: IPO dam about to break?

Some London IPO news is emerging that might be linked to the new-found optimism that's crept into the FTSE. 

Chinese online fashion group Shein is reported to be on the verge of getting the OK from Beijing and filing its application with the London Stock Exchange this month, according to Reuters.

After examining a New York listing but getting a stony-faced reaction from regulators and politicians, investment banks and lawyers in the City have now been hired for what would be a sizeable IPO, with the fast-fashion retailer reportedly valued at $66 billion (£53 billion) last year.

Reuters says the US IPO plans, possibly for a secondary listing in future, are still being kept alive in case of a regulatory shift.

New stories are also emerging about Raspberry Pi considering a London float too.

Boss Eben Upton, who has mentioned the possibility of an IPO earlier this year, for a company that in its last fundraising round was valued at just over £440 million.

The Cambridge outfit could list within the next 10 days, according to a Sunday Times report, with the valuation having risen to around £500 million.

7.18am: FTSE to pause for a breather

FTSE 100 was set to pause for breath on Monday after last week’s record-breaking run.

London’s blue-chip index was set to drop around ten points at the open, according to financial spread firms, from the new closing high on Friday of 8,433.76.

It’s a busy week for UK company announcements with BT, easyJet, Flutter, Currys and Greggs all reporting.

Paddy Power owner Flutter is likely to bring the topic of the value of a London listing back into focus after its decision to shift its main quote to the US.

Asian markets should help the mood with the inflation number giving China a lift, though Japan was more muted ahead of this week’s US CPI number.

">Diploma PLC (LSE:DPLM), up 6.3% on the back of a good set of half-year results. 

Brave Bison (AIM:BBSN) proposed a deal that values MISSION shares at 29.04p apiece, compared to a closing price of 22.7p at the end of last week, based on an exchange ratio of 11.5 Brave Bison (AIM:BBSN) shares for each ordinary share in MISSION.

">Diploma PLC (LSE:DPLM), up 6.3% on the back of a good set of half-year results. 

The acquisitive seals, gaskets and cylinders maker has reported revenue up 10% and adjusted operating profit slightly ahead of consensus forecasts, with management upgrading its full-year guidance.

7.59am: Brave bid rejected 

Digital marketer MISSION Group (LSE:TMG) has rejected a possible all-share bid from acquisitive fellow small cap Brave Bison (AIM:BBSN).

Brave Bison (AIM:BBSN) proposed a deal that values MISSION shares at 29.04p apiece, compared to a closing price of 22.7p at the end of last week, based on an exchange ratio of 11.5 Brave Bison (AIM:BBSN) shares for each ordinary share in MISSION.

MISSION said it received the unsolicited conditional proposal regarding a possible offer on 29 April and unanimously rejected it last Wednesday, 8 May, which it "believes to be opportunistic and significantly undervalues the group and its prospects" as well as being dilutive to its shareholders.

MISSION's share price had fallen over 70% in the past three years to a low of 10p in the autumn after it sounded the earings alarm and cancelled its dividend in the face of difficult trading conditions. 

7.33am: IPO dam about to break?

Some London IPO news is emerging that might be linked to the new-found optimism that's crept into the FTSE. 

Chinese online fashion group Shein is reported to be on the verge of getting the OK from Beijing and filing its application with the London Stock Exchange this month, according to Reuters.

After examining a New York listing but getting a stony-faced reaction from regulators and politicians, investment banks and lawyers in the City have now been hired for what would be a sizeable IPO, with the fast-fashion retailer reportedly valued at $66 billion (£53 billion) last year.

Reuters says the US IPO plans, possibly for a secondary listing in future, are still being kept alive in case of a regulatory shift.

New stories are also emerging about Raspberry Pi considering a London float too.

Boss Eben Upton, who has mentioned the possibility of an IPO earlier this year, for a company that in its last fundraising round was valued at just over £440 million.

The Cambridge outfit could list within the next 10 days, according to a Sunday Times report, with the valuation having risen to around £500 million.

7.18am: FTSE to pause for a breather

FTSE 100 was set to pause for breath on Monday after last week’s record-breaking run.

London’s blue-chip index was set to drop around ten points at the open, according to financial spread firms, from the new closing high on Friday of 8,433.76.

It’s a busy week for UK company announcements with BT, easyJet, Flutter, Currys and Greggs all reporting.

Paddy Power owner Flutter is likely to bring the topic of the value of a London listing back into focus after its decision to shift its main quote to the US.

Asian markets should help the mood with the inflation number giving China a lift, though Japan was more muted ahead of this week’s US CPI number.

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Tomorrow also brings UK unemployment data.  

8.11am: FTSE starts lower, then quickly higher

Asian markets should help the mood with the weekend inflation number giving China a lift, though Japan was more muted ahead of this week’s US CPI number.

">Shein IPO in London reported to be close ">breaking into new all-time highs, up over 7% so far today, on the back of half-year results.

Analyst Kean Marden at Jefferies says earnings per share is 1% above the consensus City forecast on organic revenues in-line with expectations and a stronger-than-expected EBITA margin.

"Updated FY24F revenue guidance is in line with expectations, but margin guidance is slightly ahead," Marden says, adding that this should mean the average EPS forecast is likely to rise by low/mid-single digits.

"Diploma’s resilient results contrast with recent softness elsewhere in the distribution sector, and the shares should consolidate recent gains," he adds. 

8.28am: Cautious optimism for markets   

The City mood seems to be cautiously optimistic, with the Footise edging steadily higher now, with 12 points added this morning. 

Chinese online fashion group Shein is reported to be on the verge of getting the OK from Beijing and filing its application with the London Stock Exchange this month, according to Reuters.

New stories are also emerging about Raspberry Pi moving closer to a London float too.

">9.05am: Chilled markets, for now...

Stocks advanced last week and the main economic action is later in the week - "it’s a quiet start to the week ... take a chill pill" says market analyst Neil Wilson at Finalto.

"The FTSE 100 continued to make new highs and trades mildly higher this morning above 8,400. The Dow Jones rose 2% for the week, and there were gains for the S&P 500 and Nasdaq. Be careful about the Dow points – Goldman Sachs hit a record on Friday and is up 17% in the last four weeks – accounting for a third of DJIA’s rally during that period. Friday’s consumer sentiment survey from the US was weak. The 13% decline took it to the lowest in six months. Year-ahead inflation expectations rose from 3.2% last month to 3.5%."

"Despite the resilience of US inflation, the message from the Fed remains one of easing to come – cuts are in the mail," Wilson says. 

Strategists at Stifel are of a similar mind. “The next 500 points for the S&P 500 are down," they say, with the Fed having "already harvested all the normal post-recession disinflation we would expect. As a result, the sustained 2% core PCE inflation the Fed seeks is a pipe dream"

Stifel expects the timing of Fed rate cuts to be pushed back further, "causing a middle quarters correction for equities". 

8.51am: Get your Diploma    

Some analyst thoughts on Diploma, one of the FTSE's less well-known constituents, which is topping the index leaderboard this morning.

">9.50am: UK wages rising faster than productivity

UK wages over the past year have grown at the fastest rate in 16 years despite any improvement in productivity, according to new research from the Resolution Foundation.

Real wages have risen "without putting further pressure on inflation", the research found, as falling pension costs and import prices have "temporarily severed the link between productivity and wage growth" in Britain. 

However, it is a trend that is not set to last, the think tank reckons.

Real average weekly regular earnings have grown by 2.1% in the 12 months to February 2024, helping recover some of the lost ground from pay rises being well below inflation for several years.

Productivity, as measured by output per worker, fell by 0.6% in the 2023.

The report said there are two key reasons why this unproductive wage growth is affordable for firms and is not fuelling inflation: employer social contributions such as payroll taxes and pension contributions that normally add to a firm’s wage bill actually fell during the period (due to rising interest rates helping reduce pension deficits and allow firms to redirect those contributions back into wage packets) and some rewinding of the rise in import prices during the cost of living crisis.

"After 16 years of wage stagnation, real pay packets in Britain are growing again at a healthy two per cent," said Greg Thwaites, research director at the Resolution Foundation.

He added: "But while this welcome real wage recovery has been affordable so far, it won’t be in the future. Unless productivity picks up, wage growth will peter out, or pay rises will simply be passed on through higher prices and prolong our inflation problems."

9.20am: FTSE 100 back in the red

The FTSE has slid back into the red, down four points, with BAE Systems still the biggest faller, down almost 3% with no obvious reason why.

Phoenix Group has joined the fallers after announcing that its finance chief is stepping down after 23 years at the company. 

Ocado, a perennial market mover, is also among those blue chips down more than 1%, joined by housebuilder Persimmon.  

">10.10am: FTSE in the red, Europe too

London's blue-chip index is joining most of its European counterparts in the red, having dropped just a point or two at a few moments in the past hour or so. 

While the FTSE is searching for direction, generally fairly flat, Germany's DAX is down 0.2% and France's CAC-40 is 0.1% lower.

Notable continental fallers include ASML down 0.9%, Orsted down 4.6%, Siemens down 4% and Leonardo down 3.8%.

">9.20am: FTSE 100 back in the red, led by Phoenix Group

The FTSE has slid back into the red, down four points, with BAE Systems PLC (LSE:BA.) still the biggest faller, down almost 3% with no obvious reason why apart from profit taking as it hit all-time highs last week.

Phoenix Group Holdings PLC (LSE:PHNX) has joined the fallers after announcing that its finance chief is stepping down after 23 years at the company. 

The long-term savings and retirement group called Rakesh Thakrar, who joined when it was a much smaller business in 2021, "central" to its acquisition strategy.

Phoenix will begin a formal process to find his successor but in the meantime said it has hired former Abrdn CFO Stephanie Bruce in an interim role.

Shares in the company were down 2.4%.

">10.35am: Job moves

The departure of Phoenix finance chief Rakesh Thakrar is hitting shares in the life insurance group, which is down 2.2%.

Elsewhere in the FTSE, reports that Ladbrokes owner Entain PLC (LSE:ENT) is whittling down its potential new CEOs is helping the shares, but not much.

Former Rank casino boss Henry Birch is among the candidates, according to a Sky News report, which adds that he is "one of a small number" being considered to be the group's permanent CEO after it parted ways with Jette Nygaard-Andersen in December.

Last month the Bwin, Coral and Sportingbet owner cited regulatory difficulties in various international markets as one of the reasons for its mixed results, with its shares having halved in the past year.

April also saw chair Barry Gibson announce plans to step down, to be replaced by current non-executive director and interim CEO Stella David. 

9.20am: FTSE 100 back in the red, led by Phoenix Group

">11.11am: Markets treading water

European markets are treading water this morning with some caution in the air this week due to US inflation data due on Wednesday, says market analyst Joshua Mahony at Scope Markets. 

"With 92% of the S&P 500 having already reported their first quarter earnings, markets will be actively shifting their focus more keenly back towards economic factors in the weeks ahead," he says.

"On a day that is largely devoid of major news, traders will be looking closely at the potential scenarios on Wednesday.

"Given the recent resurgence in US inflation, we could potentially see fresh risk-off sentiment emerge should monthly inflation come in above 0.2% yet again."

11am: New US China tariffs incoming

Anyone concerned over an impending trade war between the US and China in the event of a Trump re-election will be more concerned to note that "such a move could come sooner than anticipated", with Joe Biden looking set to announce a major hike in levies on Chinese imports this week.

With US politicians and manufacturers already seeing Chinese EVs as a serious threat, the White House Tuesday is expected to announce 100% tariffs on electric vehicles imported from China on Tuesday, according to reports. 

One of the big drivers of Tesla's slump over the past year has been price competition from the likes of China's BYD.

10.42am: Retirement mortgage

One of the main stories going around this morning is that the last three years has seen a surge in the number of people locked into mortgage terms that run beyond the state pension age.

Data from the Bank of England highlighted today that is particularly rife among those currently aged under 30.

Interest rates currently sit at 16-year highs, leading house buyers to pick a longer repayment period to reduce monthly payments.

"The challenge of getting on the housing ladder is forcing large numbers of young home buyers to gamble with their retirement prospects by taking on ultra-long mortgages," said Steve Webb, the former pensions minister and partner at LCP, the financial services group.

The departure of Phoenix finance chief Rakesh Thakrar is hitting shares in the life insurance group, which is down 2.2%.

Capita PLC also had an update about its retiring CFO Tim Weller and his successor Pablo Andres.  

The outsourcing company confirmed that Weller  will step down as a director on 9 August, with Andres appointed as a director and CFO designate on 15 July.

It noted that Andres bought 650,000 Capita shares last week, which though this did not set him back too much as the share price was just over 13.5p.

Among the main business and finance stories this morning, there's been a surge in the number of households taking out long mortgage terms that would see them locked into mortgages running beyond the state pension age.

Elsewhere, research has shown that UK wages over the past year have grown at the fastest rate in 16 years despite any improvement in productivity. 

This research is from the Resolution Foundation, which says real wages have risen "without putting further pressure on inflation", but its a trend that it does not expect to continue. 

">11.43am: Treasury sells down NatWest stake

The state's stake in NatWest Group PLC (LSE:NWG) has been further trimmed by the Treasury to below 27%.

An announcement this morning confirmed that the stake now stands at below 34.9 billion shares or 26.95%.

The Treasury is planning to reduce its stake below 10% by the end of this year and fully privatise the bank by 2025 or 2026.

NatWest shares are up 0.2% to 319.9p today, up around 45% from close to 220p at the start of the year. 

Anyone concerned over an impending trade war between the US and China in the event of a Trump re-election will be more concerned to note that such a move could come sooner than anticipated, with Joe Biden looking set to announce a major hike in levies on Chinese imports this week.

With US politicians and manufacturers already seeing Chinese EVs as a serious threat, the White House Tuesday is expected to announce a hike to 100% tariffs on electric vehicles imported from China on Tuesday, up from 25%. 

One of the reports was on Friday night from the FT, which noted that the sharp rise in the levies comes amid mounting concern that China could flood the US market with cheap EVs, threatening the American car industry.

The Biden administration's move averts a potential election threat from former president Donald Trump, who brought in many measures to slow Chinese imports as part of a trade war launched in 2018. 

One of the big drivers of Tesla's slump over the past year has been price competition from the likes of China's BYD, which this year cut its affordable EV, the Seagull hatchback, to an equivalent price of just under US$10,000, more than US$50,000 below the average price of an EV in America.

Europe has also been looking at what it can do too, with Chinese EVs on course to make up a quarter of those sold in Europe this year.

Capita PLC (LSE:CPI) also had an update about its retiring CFO Tim Weller and his successor Pablo Andres.  

">below 34.9 billion shares or 26.95%.">

"At a near 5% yield, and with inflation coming closer to being under control, the real yield is positive. And while the Fed has paused rates for now, eventually it will have to lower rates."

Second, he says that high rates are "not helpful in a high-debt world, so they are likely to come down and provide some capital appreciation for those already invested".

The negative returns seen in the five-year period is the result of central bank excesses in the years that preceded 2022, Lagarias says, resulting in the subsequent re-rating.

A full mean-reversion is "at best, a low-probability event", he adds.

"Going forward, we don’t expect a quick fixed income rebound, but possibly a dragged-out one. It will take years for those who were fully exposed to the 2022 crash to recuperate their losses by being in a simple fixed-income portfolio."

">12.15pm: FTSE into the red

The FTSE 100 has fallen to its lowest point of the day, down 12 points to 8421 as commodities drag.

Only two of the index's top 10 are in green, with Shell and BP in the red, joining Rio Tinto, Glencore and others.  

This is despite oil prices turning positive, with Brent crude up 0.4% to $83.09.

China could be a concern, with the US tariffs incoming and a weaker-than-expected Chinese data snapshot over the weekend.

This "indicated that the authorities still have an uphill battle in stimulating demand in the fragile economy", says Susannah Streeter at Hargreaves.

"Although the inflation reading came in largely as forecast, with consumer prices rising 0.3% in April, the contraction in new bank lending was being read as an indication that interest rates offered were still too high for companies in struggling sectors to borrow to help expand activity. There will be hopes that the sales of long-term bonds announced today will help fund stimulus spending to mend leaky parts of China’s economic plumbing, but pressure is mounting for more stimulus. However, the People’s Bank of China isn’t expected to budge much on Wednesday, with the medium-term lending rate expected to be kept on hold."

She adds that concerns that higher borrowing costs in the United States will be hanging around for longer have been weighing on oil prices, as high interest rates are expected to sap demand for energy in the economy, with confusion also hanging around about future supplies from major oil producers.

"Although there continues to be distressing scenes of suffering in Gaza, risks of overspill from the Israel Hamas conflict are also considered to be easing, which is also helping bring down prices," says Streeter. 

11.57am: Bond markets becalmed or dead?

">12.40pm: NatWest note

While HM Treasury has been selling down its NatWest stake, a leading US investor has been buying large chunks.

This was a story from over the weekend from the Guardian, which noted that Los Angeles-based investment firm Capital Group has been a significant buyer and become one of the bank's major shareholders. 

The US investment giant, which has more than £2.5 trillion of assets under management, has bought over £110 million of shares in the UK high street lender, putting it among the top 30 shareholders.

It bought up 33 million shares at the end of March, roughly a 0.4% stake, with more purchase since, according to the report

Capital has been impressed with NatWest's recent profitability and representatives have met newly appointed chief executive Paul Thwaite earlier this year.

Among its other European investments, Capital Group has also held major stakes in BAE Systems, British American Tobacco and ASML.

"Although there continues to be distressing scenes of suffering in Gaza, risks of overspill from the Israel Hamas conflict are also considered to be easing, which is also helping bring down prices," says Streeter.

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