FTSE 100 ends winning run as 'defensive' stocks slip, Alphawave and Spectris surge on bids

• FTSE 100 down 18 points at 8,820
• US and China delegations meet in London for trade talks
• WPP shares falls as CEO quits after seven year stint
• Revolution Beauty says Frasers one of several interested parties  

4.09pm: Footsie set to end winning run

The FTSE 100 is on the verge of ending its recent winning run after six previous steps higher. 

Biggest faller on the index remains WPP, after boss Mark Read handed in his notice after seven years leading the advertising group.

Then next are insurer Hiscox, toothpaste and painkillers group Haleon, gold digger Endeavour Mining, life insurer Aviva, grocers Tesco and M&S, hip replacer Smith & Nephew and welath manager St James's Place.

A lot of these would be classed as defensive investments. Analysts at UBS today have an interesting note that dives into the tug-of-war between cyclical and defensive stocks, saying the lines are blurring.

The concept of defensiveness is evolving, the note explains, pointing out that some companies typically viewed as defensive have become more volatile, while certain cyclicals are showing stable earnings growth and better cost control.

It's not just 'defensives' that are down, with all but three of the Footsie's 15 largest names in the red. 

On the FTSE 250, Spectris is the biggest riser, rocketing 60% higher as it said it has had a bid from private equity group Advent pitched at £37.63 per share.

Broker Peel Hunt noted that there have been 30 bids for UK companies at over £100 million market cap so far this year, with a total value of £25 billion.

Spectris and Alphawave (both today) are the largest bids at £3.7 billion and £1.8 billion, respectively.

There has been a "lack of replacements", with just one IPO in 2025 larger than £100 million.

"Companies in the UK seem to be far more attractive to acquirors than investors. The root cause is the consistent outflow of capital from domestic markets. If we want the UK equity market to thrive, an urgent rethink is required to ensure that UK capital backs UK companies."

3.34pm: Rare earths and magnets at heart of trade talks

US-China trade talks are happening at Lancaster House in London, with the meeting expected to last until this evening and possibly tomorrow.

US economic adviser Kevin Hassett, director of the National Economic Council, has been talking to the media about how rare earths are a key piece of these talks.

While China agreed to release these materials, they have apparently been dragging their heels, which he says has been a "very significant sticking point".

He says, “So really the purpose of the meeting today is to make sure that they’re serious" and "get handshakes" from Treasury secretary Scott Bessent, commerce secretary Howard Lutnick and trade secretary Jamieson Greer.

"Immediately after the handshake, any export controls from the US will be eased, and the rare earths will be released in volume, and then we can go back to negotiating smaller matters," he said. 

UK Chancellor Rachel Reeves is also set to meet Chinese vice premier He Lifeng, though details of the agenda remain undisclosed.

2.54pm: Mixed start on Wall Street, FTSE 

US stocks are mixed at the open. 

While the Dow Jones is down 0.2%, the S&P 500 is just above flat and the tecgh-heavy Nasdaq and small cap-weighted Russell 2000 are up 0.2% and 0.45%.

Dragging the Dow lower are falls for McDonald's Corp (NYSE:MCD), Travelers Companies and Salesforce.

One of the biggest fallers on the Nasdaq 100 is Tesla Inc (NASDAQ:TSLA), down 3% to erase some of the relief rally from the end of last week as boss Elon Musk's relationship with the White House remains unclear. 

Warner Bros Discovery Inc (NASDAQ:WBD) is the top riser on the S&P after the company said it will split its TV and streaming businesses. 

The Footsie remains in the red, as with most European indices.  

2.21pm: Alphawave takeover a sign of UK market's lack of support from govt

This week is apparently London Tech Week but it has "opened under a cloud," due to the takeover of Alphawave today, which comes just days after fintech giant Wise said it is shifting its primary listing to New York.

These are sign of the "fragility" of UK public markets, says Darius McDermott, managing director at FundCalibre.

"Selling to larger US rivals has long been a common exit path for UK tech, but this need not be the status quo. If the government wants innovation to flourish at home, it must recognise the vital role a healthy public market ecosystem plays in retaining and scaling these businesses."

McDermott says stripping away incentives for AIM "risks permanently damaging one of the UK’s most effective growth engines of the market and economy" – particularly when the revenue raised for the Treasury would be "inconsequential".

"For too long, the government has neglected, overregulated and taxed them, driving liquidity and investment out of the UK."

1.58pm: US-China talks begin in London

Trade talks between the US and Chinese delegations have started in London, a source tells Reuters.

Chinese state media agency Xinhua also reports that the talks have begun.

The location within the UK capital has not been made public.  

Leading the US delegation is Treasury secretary Scott Bessent, who meets up again with China's vice premier He Lifeng, after the pair thrashed out a preliminary agreement in Switzerland almost a month ago. 

1.54pm: UK and Nvidia agree AI partnership 

Nvidia Corp (NASDAQ:NVDA) is agreeing a series of UK partnerships aimed at strengthening the country's AI capabilities, amid rising concern that Britain is lagging behind global rivals.

The $3.5 trillion US chips group said it will work with the UK government to help businesses adopt AI and plans to support the training of 100,000 people by 2030.

It has also signed agreements with the Financial Conduct Authority to promote safe experimentation and with Barclays PLC and Microsoft to develop AI-focused workspaces for 150 tech firms in London.

Keir Starmer said the UK will become an "AI maker not an AI taker", calling for the UK public to "lean in" and embrace AI.

NVIDIA boss Jensen Huang said that in the next 10 years, "every industry in the UK will be a tech industry" because of AI, adding that the UK is the biggest country for AI investment other than the US and China.

1.20pm: Alphawave deal should be smooth sailing, says broker

While Qualcomm's $2.48 billion takeover of Alphawave requires regulatory approvals including the US, Germany, South Korea and Canada, and FDI approval from the UK, analysts at Jefferies say they "do not expect any material regulatory obstacles".

This is especially so following Alphawave's separate announcement today that it has entirely disposed of its stake in its Chinese JV, WiseWave, to its existing shareholders.

Qualcomm first confirmed that it was considering making an offer in early April.

Jefferies expects the deal will conclude at the bid price, in the Q1 2026 timescale specified.

12.53pm: Trustpilot plans not fully trusted by analyst

Trustpilot Group PLC (LSE:TRST) is the biggest fallers on the FTSE 350, down 11% after Panmure Liberum issued a 'sell' recommendation, citing significant risks in the company’s strategy.

While the reviews platform is popular among small and medium-sized enterprises (SMEs) for boosting brand credibility through customer reviews, it is looking to shift focus towards larger corporate clients.

In doing so, it aims to reduce customer churn and secure more stable, high-value contracts, but it brings various execution challenges, analyst Sean Kealy warns.

Large enterprise contracts involve prolonged sales processes, he says, including negotiations with procurement teams, customisation requests, and intricate internal approvals.

12.19pm: FTSE down, US futures flat, China announces new support measures

The FTSE remains slightly under water, while negative moves seem to be a la mode on Continental Europe too. 

US futures are flat, meanwhile. 

Donald Trump is awake and posting on social media about the migration protests in Los Angeles, calling them "riots" and blaming the local governor and mayor, though things seem to have escalated since the White House ordered in troops.

News flash from China: the minimum wage standard is set to be raised, state news agency Xinhua reports, as one of several new support measures unveiled.  

Beijing has issued "guidelines to improve livelihood", including increasing the supply of affordable housing and coverage of social insurance. 

China wants to "boost fiscal support for employment, health, education" and "strengthen basic support for low-income groups".

11.48am: HMRC clamping down on rich tax avoiders

Specialist investigations into wealthy taxpayers by HMRC drummed up over £1.5 billion for the public coffers in the previous tax year – more than double the previous year.

Total tax take collected by the HMRC from wealthy taxpayers increased to £5.2 billion in the tax year to April 2024, up from £4 billion as HMRC.

The UK tax office has been chasing down unpaid tax more proactively and is increasingly using AI tools and ‘big data’ techniques to assist in investigations, and is receiving information on overseas assets from tax authorities, according to law firm Pinsent Masons. 

Numbers of investigations into wealthy individuals are likely to increase further in the coming years, the firm predicts, with Rachel Reeves having allocated more funding for HMRC in the recent Budget, including an extra £100 million to recruit more compliance officers as the Chancellor hopes to raise £1 billion of extra tax revenue by 2029.

“The scale of specialist investigations into wealthy taxpayers shows HMRC has already been clamping down much harder on those suspected of underpaying tax," says Ian Robotham, expert on tax disputes and investigations at Pinsent Masons.

11.22am: Nationalising water companies would cost 'near to zero' 

Shares in water companies are down today. Could this be anything to do with a report from a think-tank that suggests nationalising the water industry would cost taxpayers almost nothing.

The Common Wealth economic think-tank has hit out at government claims that taking back ownership of the water companies would cost £99 billion – branding the figure “lobbyist nonsense”.

Pennon Group PLC (LSE:PNN, OTC:PEGRY) and Severn Trent PLC (LSE:SVT) shares are down 0.9% this morning, with United Utilities Group PLC (LSE:UU.) are down 0.7%.

The figure often cited by ministers is based on inflated and misleading calculations drawn from water companies and their backers in the private sector, the report says.

The real cost, under UK law, would reflect the fair value of the assets – not the so-called “regulatory capital value” (RCV) that the government has repeated.

“The £99 billion headline figure is an invention of corporate lobbyists,” the report said. “The true and fair value to bring water into public ownership is close to zero.”   

 

10.58am: Aviva downgraded

Aviva PLC (LSE:AV.) shares have been downgraded by investment bank Keefe, Bruyette & Woods, citing limited upside relative to peers and doubts over capital deployment potential – especially following the acquisition of Direct Line.

While KBW retains its 'overweight' stance on European insurers, it sharpened its focus on names with stronger risk/reward dynamics, naming Prudential and Beazley as among its top picks, along with France's Axa and Denmark's Tryg.

“Aviva is complicated by the DLG transaction,” KBW said in a note today. “Proving delivery is needed to support the valuation. It could be a deployment catalyst for the rest of the sector.”

The deal dilutes equity by around 10% upfront but with earnings accretion expected to rise to at least 10% by 2027 and beyond.

"Our data is therefore in a negative point of this transition. It is a warning that the market is already pricing for a level of delivery that must be achieved to justify the current share price."

Aviva (and Generali) are offering the lowest forecast returns among the ‘Big 5’ European insurers, at an estimated 17% total annual return from 2024 to 2027.

10.14am: M&G top of the risers

M&G PLC (LSE:MNG) shares are topping the FTSE 100 leaderboard after an upgrade to 'buy' from UBS, which sees strong growth prospects in asset management and the recent game-changing tie-up with Japan’s Dai-ichi Life.

The Swiss bank lifted its rating from 'neutral' on the back of a deal announced at the end of last month, where Dai-ichi committed to allocating at least £4.5 billion of net flows into M&G's asset manager, and also take around a 15% stake in M&G, worth £850 million.

Analyst Nasib Ahmed says the partnership “was the catalyst we were looking for”, offering long-term technical support for the shares and underpinning expectations of 10% annual capital returns.

9.54am: Caution reigns for markets, as US-China talks eyed

The FTSE 100 continues to shuffle sideways, just in shallow waters below where it started the day. 

Defence and aerospace, gold miners, utilities, financials and banks are among the main fallers.     

"There’s caution at the start of the week, as trade talks get underway in London to try to stem a bigger trade war erupting between the world’s largest two economies," says market analyst Susannah Streeter at Hargreaves Lansdown.

"The UK has a new role as an intermediary between a belligerent US and an unyielding China.

"While Xi Jinping’s administration has shown determination not to bow down to Trump’s tariff intimidation, having already been forging deeper trading relationships with other nations, there are hopes that both sides will want to agree on a deal.

"China’s flexed its muscles by restricting the export of rare earth minerals, vital for so many industries, including car production. The possibility of enabling US companies to have greater access to these essential metallic elements might help move the dial. But even as talks get underway, there’s a huge amount of uncertainty around about the outcome of other trade disputes."

Oil giants Shell and BP have crept into positive territory as Brent crude futures have clung onto most of the gains from last week, flat today at $66.4 a barrel.

Europe's other major equity indices are also flat or in the red, while US futures are mixed, but broadly flat. 

"There could still be volatility to come," says Streeter, "given that the quick-fire trade commentary from the White House now includes threats to tax international investors in US assets, if they are based in a nation with perceived inequitable tax practices.

"While it’s not clear the what the full extent of these sweeping new proposals would mean for international investors, it’s spread another note of alarm about unpredictable policy and is further damaging the US reputation for stability."

The US dollar index is down below 99 again, while the pound has edged up 0.4% to $1.3574, not far from a three-month high against the greenback after rising up 8.5% against the dollar since the start of the year.

Strategist Patrick Munnelly at Tickmill adds that markets are "attentive to developments in Los Angeles", where President Trump has sent in National Guard soldiers to confront protesters who are demonstrating against Trump's immigration policies and local deportations.

Munnelly says: "California, on its own, ranks as the world's fourth-largest economy, surpassing Japan's gross domestic product, and Trump dispatched guardsmen to its largest city to address what the White House referred to as 'chaos, violence, and lawlessness'. Governor Gavin Newsom described Trump's response as 'the actions of a dictator'."

9.39am: Shein to move more production to India

Shein, the Chinese e-retailer, has agreed a deal with India's Reliance to ramp up garment production in the subcontinent and begin exporting India-made Shein clothes within a year, according to reports.

The two companies aim to expand their local supplier base from 150 to 1,000 manufacturers, with plans to list Indian-made items on Shein’s US and UK websites, according to Reuters.

The move comes as Shein looks to diversify away from China amid high US tariffs on Chinese imports.

Last month, Shein delivered a blow to the City of London as it abandoned a UK listing in favour of a likely Hong Kong IPO. 

8.57am: Mixed reaction to small-cap's Bitcoin treasury strategy 

Shares in Anemoi International Ltd (LSE:AMOI) fell 8% on Monday, erasing early gains, after the company confirmed it has begun investing in bitcoin as part of a new treasury strategy.

It is one of a growing number of London-listed companies adopting these crypto treasury strategies - a trend we flagged last week.

Anemoi said it has now allocated around 30% of its cash reserves to bitcoin, following last week’s announcement that it could invest up to 75% in digital assets and related instruments.

The company said the move reflects interest from third parties in incorporating a crypto-related element into Anemoi’s operations.

8.38am: China in focus

Chinese trade data was not as bad as it seems, says Kelvin Lam at Pantheon Macroeconomics, with month-on-month numbers showing that exports rebounded 0.7% after a fall of 0.3% a month earlier, while the plunge in US monthly shipments eased to -3.5% from -26.0% a month ago, while exports to the EU rebounded by 6.5% following nearly flat growth in April.

By commodity, monthly exports of rare earths fell at a slower pace in May, while auto and electrical exports parts picked up.

President Xi and Trump held a 90-minute phone call last Thursday and agreed to a temporary lifting of China’s export embargo on rare earths and critical minerals.

"The market now turns its focus to trade talks held in London today," says Lam. "With the additional attendance of the US Commerce Secretary – who specialises in hi-tech bans – Mr Lutnick’s participation suggests the US might be considering easing some strategic curtailments on Chinese industrial upgrading, according to Bloomberg.

"We expect negotiations to be difficult for both sides, and more market volatility will likely stem from these discussions. In any case, the process will continue to drag on, as decades of differences between the US and China will not be resolved in just a few meetings. We expect US tariffs on China to stay at 30% (or above) in the near future while a trade deal is being hammered out, along with an extension of the tariff reprieve beyond early July."

8.15am: FTSE 100 flat at the open 

The FTSE 100 opened a handful of points higher but has already dropped them, falling one points into the red at 8,837.

Defence and aerospace companies are prominent among the sliders, along with gold miners and utilities. 

WPP shares are down 1.7% on the news that CEO Mark Read has given his notice. 

Then Endeavour Mining is down 1.6%, with Rolls-Royce and Melrose Industries both down just over 1%, followed by BAE Systems, Severn Trent, BT and Vodafone.

7.56am: WPP boss quits

WPP PLC (LSE:WPP) has begun the search for a new chief executive, as Mark Read has revealed his plans to retire at the end of the year.

Read, who took the top job in 2018 after the inglorious departure of founder Sir Martin Sorrell, has been at the company for over three decades. 

7.49am: Alphawave agrees £1.8bn takeover

Alphawave IP Group PLC (LSE:AWE), one of London's few listed microchip companies, has agreed to a US$2.4 billion (£1.8bn) recommended acquisition by US giant Qualcomm Inc.

The UK-Canadian company's board has unanimously recommended the offer, with shareholders holding just over 50% of the company’s shares having given irrevocable undertakings to back the deal.

In a separate statement, Alphawave confirmed it had completed the sale of its entire interest in WiseWave, a joint venture with a group of Chinese investors, at the end of last week. The disposal, previously flagged in its 2024 interim results, transfers ownership to existing shareholders.

7.30am: Frasers 'one of a number' of interested in Revolution Beauty

Revolution Beauty Group PLC (AIM:REVB) has confirmed that Mike Ashley's Frasers Group PLC (LSE:FRAS) is among those possibly interested in taking it over.

The cosmetics company has issued a statement saying that the Sports Direct owner is "one of a number of parties conducting due diligence" after it put itself up for sale last month.

"There can be no certainty that Frasers' interest will result in a firm offer for the company," the struggling company stressed. 

7.15am: FTSE 100 called just above flat

The FTSE 100 has been predicted to start the week in cautious fashion, potentially extending its slow-and-steady winning run into a seventh day.

London's blue-chip index is set to rise by around four points on Monday morning, per the futures market, after it finished last week at 8,837.9, up 65 points over the week.

Wall Street ended the week on a high note, with investors cheering a stronger-than-expected jobs report and easing tensions between Donald Trump and Elon Musk, with the S&P 500 climbing 1% to finish at the 6,000 milestone – its highest level since February. The Dow Jones added 1.1%, the Nasdaq rose 1.2% and the Russell 2000 jumped 1.5%.

Today, June 9, is the deadline the US Appeals Court gave the Trump administration to respond to the Court of International Trade declaring Trump's 'reciprocal' tariffs an illegal use of the International Emergency Economic Powers Act.

Adding to the positive mood, the public spat between Tesla’s Musk and President Trump appeared to cool. With reports of a planned call between the two and talk of reconciliation, Tesla shares rebounded sharply, lifting the broader tech sector after the previous day's sharp sell-off.

Asian markets in bathed in green this morning, with the Hang Seng up 1.2%, the Nikkei rising 0.9% and China's domestically focused Shanghai index up 0.35%. 

Fresh data from China showed negative consumer price inflation for the fourth month in a row and that exports grew much slower than expected in May as US import tariffs remained, while imports fell significantly more than forecast.

Chinese equities are positive as they are "supported by hopes that weak macro data will prompt further stimulus from the People’s Bank of China (PBoC) and the government, and that the second round of US-China trade talks – today in London – could lead to further progress", says market analyst Ipek Ozkardeskaya at Swissquote Bank.

"Last week, a phone call between Trump and Xi yielded news that China would relax export controls on rare earth metals to the US, suggesting the US may also ease restrictions on certain technology exports.

"Still, some observers warn that the second round of talks may not bring the same level of progress as the first. Any lack of progress could prompt bulls to take profits and move to the sidelines."