FTSE 100 shares round-up: Rolls-Royce, M&S, BP, Shell, housebuilders

Milestones for Rolls-Royce Holdings (LSE:RR.) and Marks & Spencer Group (LSE:MKS) alongside stronger trading by BP (LSE:BP.), Shell (LSE:SHEL), Diageo (LSE:DGE) and homebuilding stocks today put the FTSE 100 index on track for a landmark of its own.

The blue-chip benchmark stood on the brink of March’s record close of 8,871 after optimism over ongoing US-China trade talks was accompanied by interest rate speculation.

• Invest with ii: Open a Trading Account | Cashback Offers | Free Regular Investing

Economists believe that a rate cut by the Bank of England is increasingly likely in August, after today’s weak labour market figures showed slower wage growth and the largest fall in payrolled employees outside the pandemic since records began in 2014.

ING economist James Smith said: “While the bar for the Bank of England to speed up rate cuts seems to be set fairly high, this data helps cement cuts in August and November.”

Capital Economics said today’s data reinforced its view that rates will fall by more than investors expect to 3.5% by next year, compared with the current level of 4.25%.

Source: TradingView. Past performance is not a guide to future performance.

Despite the uncertainty created by the deterioration in the labour market, building stocks dominated the FTSE 100 risers’ board amid hopes of a boost to mortgage affordability.

They also benefited from a robust update by second-tier Bellway (LSE:BWY), which provided an encouraging snapshot on demand levels during the key spring selling season.

• Market snapshot: boost for Bellway and FTSE 100 index
• eyeQ: two cheap housebuilder stocks flash bullish signals

Persimmon (LSE:PSN) led the FTSE 100 index with a rise of 56p to 1,358.5p, returning the shares close to the year-to-date high set in mid-May. Barratt Redrow (LSE:BTRW) also advanced 16.3p to 466.3p, alongside Taylor Wimpey (LSE:TW.) and Berkeley Group Holdings (The) (LSE:BKG).

The session provided yet more cheer for Rolls-Royce investors after the engine giant’s shares established a foothold above £9 for the first time.

They advanced as far as 912.5p, boosted by the government’s choice of Rolls as preferred bidder to build the country’s first small modular nuclear reactors (SMRs).

The Great British Nuclear decision on three SMRs will help Rolls retain its first mover advantage in a market that is growing and attracting significant international interest.

Each SMR creates enough low-carbon energy to power one million homes for 60 years, with the 470 megawatts equivalent to the output of more than 150 onshore wind turbines.

The decision follows a similar move by the government of the Czech Republic at the end of 2024.

Chief executive Tufan Erginbilgic said: “This is a very significant milestone for our business and Rolls-Royce SMR. It is a vote of confidence in our unique nuclear capabilities, which will be recognised by governments around the world.

“It is also evidence that the strategic choices we have made in the transformation of Rolls-Royce are delivering.”

• Stockwatch: why I’m downgrading my view on this share
• Shares for the future: a sea of blue at this AIM company

The M&S milestone reflected a major development in its recovery from April’s cyberattack, which it is feared will cost as much as £300 million in lost profit before any mitigating action.

M&S said it was now possible for customers to place online orders for home delivery to England, Scotland and Wales, with more products being added every day before the resumption of deliveries to Northern Ireland and Click and Collect in the coming weeks.

The resumption of online trading provided a significant boost to the share price, which rose 14.6p to 374.3p. That compared with 410p prior to the cyber disruption.

Board chair Archie Norman wrote in this month’s annual report that the impact was expected to be felt for “some weeks, or even months” but that he expected M&S to recover the “formidable momentum” in trading performance seen in 2024-25.

Other significant risers in the FTSE 100 included BP and Shell after the price of Brent crude reached its highest level in over a month at more than $67 a barrel.

• The Income Investor: does L&G offer income investing appeal
• Insider: directors exploit share crash at these three companies

The recovery from $62 at the end of May reflected optimism that this week’s US-China trade talks in London will avert the demand shock of the planned tariffs. Shell rose 55p to 2,560p, while BP added 6.3p to 368.5p, still 20% lower than February’s peak for the year.

Diageo added 11p to 1,984.5p, which compared with 2,013p earlier in the session after its United Spirits arm was reported to be mulling the sale of some or all of its stake in cricket’s IPL 2025 champions Royal Challengers Bengaluru.

United later said no discussions were taking place about a sale, which it had been thought could value the franchise at as much as $2 billion.