FTSE 100 Live: Blue chips attempt to recover; housing prices outperform - Proactive Investors UK

• FTSE 100 nine points higher at 8,240
• JD Sports results fail to impress
• Government slashes NatWest stake

8.44am: Nationwide to face competition probe over Virgin Money takeover

The Competition & Markets Authority (CMA) has launched an investigation into Nationwide Building Society’s £2.9 billion takeover of Virgin Money.

Nationwide’s surprise bid for the bank has already proved controversial, with some Nationwide members staging a revolt over the deal, while analysts consider the 220p-per-share offer opportunistic.

Now, the CMA is considering whether the merger “will result in the creation of a relevant merger situation under the merger provisions of the Enterprise Act 2002 and, if so, whether the creation of that situation may be expected to result in a substantial lessening of competition within any market or markets in the United Kingdom for goods or services.”

The regulator is calling for comments from the public, with a window open until 24 June.

8.29am: FTSE 100 inches higher

The blue-chip index added nine points to 8,240 in opening exchanges, following on from yesterday’s 48-point gain.

Top morning risers include Centrica PLC (LSE:CNA), National Grid PLC (LSE:NG.) and GSK PLC (LSE:GSK, NYSE:GSK), while the biggest fallers include betting companies Flutter and Entain, JD Sports and Primark owner ABF.

8.04am: Government reduces NatWest stake by another £1.24 billion

The Treasury has sold £1.24 billion worth of shares back to NatWest Group PLC (LSE:NWG), bringing the government’s stake down from 27% to 22.5%.

It comes after the government announced an expected delay in the eagerly awaited retail offer due to Prime Minister Rishi Sunak announcing an election set for 4 July.

The Treasury has been steadily selling down the government’s stake in the bank that it acquired as part of a bail-out package following the Global Financial Crisis.

7.47am: House prices outperform

Monthly house prices in the UK grew by 0.4% in May 2024, marking a reversal from a 0.4% decline in April and exceeding the market consensus of a 0.1% gain.

According to Nationwide data, house prices rose by 1.3% on a year-on-year basis, accelerating from a 0.6% increase in the prior period, which was the softest pace in three months.

This is the fourth consecutive month of rising home prices, driven by strong wage growth and lower inflation.

“Modest increases in mortgage rates since the Spring have slowed the housing market but not derailed it,” said Rob Wood, chief UK economist at Pantheon Macroeconomics.

7.36am: JD Sports hits sales expectations, adjusted profit slightly undershoots

JD Sports brought in £10.54 billion worth of sales in the 2024 financial year, matching broker expectations leading up to the results.

Profit before tax and adjusting items fell 8% to £917.2 million, which was slightly below the guided range of £915-935 million previously laid out by the company.

On a statutory basis, profit before tax surged 67% to £811.2 million, helped by a reduction in adjusting items of £398.7 million.

One particular highlight was JD Sports’ premium range, which saw 11% growth in organic sales.

Chief executive Régis Schultz painted the results as proof that JD Sports is making “strategic progress” in a challenging market, namely increased operating costs and a highly promotional market environment. 

The company also experienced a net reduction of 73 stores, largely due to the divestment of non-core businesses and a strategic withdrawal from South Korea.

“We have started the new financial year with Q1 in line with our expectations in a volatile market and we are on track to deliver our profit guidance for the full year,” said Schultz

“Looking further ahead, we have a strong business model and a clear strategy to deliver long-term growth and value creation for our shareholders."

7.11am: Stocks to creep higher

Stocks should edge higher when trading commences this Friday, as the blue-chip index attempts to recover losses in what has been a ropey week for the market.

Shares recovered some lost ground yesterday when the FTSE 100 closed 48 points higher, but the index still remains around 90 points lower from last Friday’s closing price.

Housebuilding stocks could provide support, given Nationwide housing prices increased 0.4% sequentially this month, beating the expected 0.1% list.

For now, FTSE 100 futures contracts predict 12 points of gains to 8,246 when markets open.

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2024-05-31 06:10:00Z
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