Week in Review: FTSE 100 dips into the red
FTSE news
The FTSE 100 dipped into the red on Thursday (27 May) following a largely uneventful day for major UK shares. The index ended the day 0.1% lower at 7,109.67.
• Monday (31 May) is a bank holiday in the UK, so markets are closed.
• Nationwide publishes house price data for May on Tuesday (1 June).
• FTSE Russell reveals which companies will enter and leave the FTSE 100 and 250 as part of its quarterly reshuffle on Wednesday (2 June).
• CIPS/Markit publish their monthly survey of business conditions in the UK’s services sector on Thursday (3 June).
• On Friday (4 June), CIPS/Markit are back, this time with their monthly survey of business conditions in the UK’s construction sector.
Sector in focus
A Dutch court has ordered Royal Dutch Shell plc (RDSA) to reduce its carbon emissions quicker than planned in a landmark ruling that could have widespread consequences for corporate polluters.
This week a judge of the district court in The Hague ordered the Anglo-Dutch oil giant to cut its emissions by 45% of 2019 levels within nine years.
Giving the ruling, the judge argued that the company’s current aim of lowering its emissions by 20% over the same period did not go far enough.
The ruling comes at a time when major multi-national corporations are coming under intense pressure to cut or eliminate their carbon emissions.
Experts say the decision has the potential to open up a slew of similar lawsuits against other major polluters.
The lawsuit against Royal Dutch Shell plc (RDSA) was brought about by a group of activists, including the Dutch arm of Friends of the Earth.
A spokesperson for Royal Dutch Shell plc (RDSA) told CNBC that it would “appeal today’s disappointing court decision”.
Economic update
The Bank of England (BoE) could increase interest rates as early as the first half of next year if the economy recovers quicker than expected, one of its policymakers has said.
However, Gertjan Vlieghe said it was more likely that the BoE would hold off on increasing rates until at least the second half of 2022.
During the pandemic the BoE has shied away from making public predictions about when rates would rise, making Vlieghe’s remarks the most explicit to date.
His comments following a warning this week from Andy Haldane, the BoE’s chief economist, who argued that the UK should avoid a spike in inflation “like the plague”.
Speaking at a parliamentary hearing, Haldane warned against doing “too little too late” to combat rising prices.
Data from the Office for National Statistics show that inflation more than doubled to 1.5% year-on-year between in April.
When the cost of living increases, it reduces household spending power, which has a negative knock-on effect for consumption-based economies.
Fund watch
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ETF watch
Experts believe artificial intelligence (AI), or smart computers capable of doing human tasks, could transform medicine, transport and industry. L&G Artificial Intelligence ETF GBP (AIAG) invests in pioneering AI firms from all over the world for an ongoing charge of 0.49%. It has returned more than 31.5% in the past year, having launched in 2019.
Company announcements
2 June – Wizz Air Holdings plc (WIZZ) reported a big jump in passenger numbers in April after 14 months of minimal traffic. But even so, it is still only operating at 22% of capacity, meaning a full recovery is some way off yet. It reports its full-year results on Wednesday (2 June).
2 June – Lockdown has resulted in a boom in book sales, leading publisher Bloomsbury Publishing plc (BMY) to upgrade its revenue and profits forecasts. The firm publishes its preliminary results on Wednesday (2 June).