An acceleration in wage growth today dealt a setback to hopes for faster cuts in interest rates.
Today’s labour market figures also showed no change in the UK’s unemployment rate at 4.4%.
On the corporate front, Holiday Inn Express owner IHG has acquired European city centre chain Ruby Hotels.
FTSE 100 Live Tuesday
- IHG buys Ruby chain, profits rise
- BHP cuts dividend amid lower prices
- Pay growth dents rate cut hopes
Market update: BT downgrade hits shares, IHG in results setback
10:15 , Graeme EvansBT Group shares today skidded 6% to the bottom of the FTSE 100 index after Citi analysts stung the telecoms giant with a double downgrade.
Citi’s switch from a Buy to Sell recommendation came as it emerged that Morgan Stanley has cut its 5% stake in the business.
BT shares fell 9.6p to 141.9p, which compares with Citi’s new price target of 112p after the bank’s cut from 200p. The downgrade reflected concerns over the long-term revenues outlook for BT’s regulated Openreach division.
Today's decline means BT shares are back where they were at the start of February, having rebounded from 105p last May.
The FTSE 100 index fell 4.35 points to 8763.66, a performance not helped by the lack of a Wall Street handover due to Presidents Day.
Other fallers included InterContinental Hotels Group, which fell 310p to 10,385p despite reporting an improved fourth quarter performance in annual results.
Revenue per available room grew by 3% in the year, boosted by an acceleration to 4.6% in the fourth quarter.
IHG has over 6600 hotels in more than 100 countries, with a development pipeline of over 2200 properties.
As well as a 10% increase in operating profit to $1.12 billion, IHG announced a £900 million share buyback and the addition of its 20th brand through the acquisition of European city centre brand Ruby.
Copper miner Antofagasta led the FTSE 100 after its dividend of 23.5 US cents a share topped forecasts in today’s full-year results.
Revenue increased by 5% to $6.6 billion, driven by the higher copper price as underlying earnings came in 11% higher at $3.4 billion.
Chief executive Iván Arriagada said: "Copper's unique role in energy security and electrification means that the world needs more of it, and our projects are on track to deliver industry-leading levels of responsible copper supply growth.”
The update helped Glencore shares rise 4.9p to 355.3p ahead of its results tomorrow, while Hochschild Mining lifted 3% or 6.3p to 192p in the FTSE 250.
Other blue-chip risers came from the banking sector after strong sessions for Barclays and HSBC, while British Airways owner IAG added 4.2p to 340.3p.
BAE Systems, meanwhile, followed yesterday’s 9% advance with a further improvement of 5p to 1343p.
Anglo American sells nickel business
09:14 , Graeme EvansAnglo American has continued its overhaul by announcing the sale of its nickel business to Hong Kong-listed miner MMG for up to $500 million.
The operation, which includes two ferronickel operations in Brazil, serves both the stainless steel and battery supply chains.
Chief executive Duncan Wanblad said the sale was a further milestone as Anglo simplifies its portfolio to focus on copper, premium iron ore and crop nutrients.
Together with November’s sale of its steelmaking coal business, the restructuring moves are expected to generate a total of up to $5.3 billion of proceeds.
Anglo shares today rose half a penny to 2474p.
FTSE 100 holds firm, BT and Tesco under pressure
08:25 , Graeme EvansBT Group shares are down 4% during a lacklustre session for the FTSE 100 index.
The telco’s reverse of 7.4p to 144.15p came as Citi switched its recommendation from Buy to Sell with a new price target of 112p.
BT’s decline was accompanied by a fall of 5.1p to 137.9p for Airtel Africa.
InterContinental Hotels dropped 170p to 10,525p, despite announcing a $900 million buy back of shares alongside annual results.
Others under pressure included Tesco, which weakened 2% or 7.3p to 389.7p.
The FTSE 100 index stood 5.09 points higher at 8773.10, led by NatWest and Barclays after their shares lifted by about 1%.
BHP cuts dividend, optimistic over long-term demand
08:08 , Graeme EvansBHP has cut its interim dividend by 31% to 50 US cents a share, reflecting the impact of lower iron ore and steelmaking coal prices.
The award, which is equivalent to 50% of earnings, follows a 23% drop in underlying profit to $5.1 billion in the six months to the end of last year.
Revenues fell 8% to $25.2 billion, despite increased sales volumes in key commodities of copper, iron ore and steelmaking coal.
The latest dividend award is worth $2.5 billion and means BHP will have returned about $50 billion to shareholders since the start of 2021.
Chief executive Mike Henry said demand for BHP products remains strong despite global economic and trade uncertainties.
He highlighted early signs of recovery in China, resilient economic performance in the US and strong growth in India.
Henry added: “The trajectory of the world population growing from eight billion today to 10 billion in 2050, with more people living in cities, together with the energy transition and the growth of data centres and AI, will compound the need for more metals and minerals.
“Against this backdrop, BHP is well-positioned, with the ability to leverage our strong balance sheet, technical know-how and sustainable business practices to deliver growth and resilient shareholder returns.”
BHP’s London-listed shares fell 14p to 2074p.
Wage growth accelerates, sterling higher at $1.26
07:46 , Graeme EvansThe pound has climbed above $1.26 amid signs that today’s labour market figures have done little to alter the Bank of England’s gradual approach to rate cuts.
The Office for National Statistics said average base pay excluding bonuses rose by an annual rate of 5.9%, up from 5.6% in the previous quarter.
That means workers’ real buying power, after taking inflation into account, rose by 2.5%, the fastest rate for four years.
Bank of England rate setters will be worried that persistent wage inflation will feed into shop prices and keep inflation above the 2% target for longer.
InterContinental Hotels acquires Ruby, lifts 2024 profit
07:29 , Graeme EvansInterContinental Hotels, whose brands include Holiday Inn Express and Crowne Plaza, today unveiled the acquisition of European city centre chain Ruby.
The addition of its 20th brand was announced alongside annual results showing a 10% rise in operating profit to $1.12 billion (£890 million) for 2024.
Revenue per available room grew by 3% in the year, boosted by an acceleration to 4.6% in the fourth quarter.
IHG has over 6,600 hotels in more than 100 countries, with a development pipeline of over 2,200 properties.
Established in 2013, the Ruby brand currently operates 20 hotels or 3,483 rooms including three in London. IHG, which is paying an initial £87.6 million, said it intends to expand the business in the Americas and Asia.
The group also announced a 10% increase in its dividend, alongside the launch of a new $900 million (£719.4 million) buy back of shares.
Chief executive Elie Maalouf said: “We enter 2025 with confidence in further capitalising on our scale, leading positions and the attractive long-term demand drivers for our markets.”
Jobless rate unchanged, wage growth accelerates
07:07 , Graeme EvansThe UK’s unemployment rate stayed at 4.4% in the three months to December, which compares with City expectations for a figure of 4.5%.
Average earnings including bonuses increased by a bigger-than-expected 6% on a year earlier, up from the previous month’s 5.5%.
Excluding bonuses, the wage growth figure was in line with forecasts at 5.9%.
FTSE 100 seen flat, Australia interest rate cut
07:01 , Graeme EvansThe FTSE 100 index last night closed 35.55 points or 0.4% higher at 8,768.01, a performance boosted by a rise of 9% for BAE Systems.
With no handover from US markets due to Presidents Day, London’s top flight is forecast to open broadly unchanged this morning.
Asia markets have seen mixed trading, with the Shanghai Composite down by 1% and the Hang Seng index up 0.7%.
Earlier today, Australia’s central bank cut interest rates for the first time since November 2020 with a quarter point reduction to 4.1%.
The pound stood at just below $1.26 ahead of today’s labour market figures.
