Sainsbury's first quarter sales fall 1.6pc, Serco fined for overcharging UK government

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Serco said it had agreed to pay a £19.2m fine and £3.7m in costs for overcharging on a UK government contract. The fine was reduced by 50% after Serco cooperated with the Serious Fraud Office's investigation, which began in 2013, into overbilling the Ministry of Justice to electronically tag offenders. No criminal charges would be brought, the company added in a statement.

Sainsbury's said its like-for-like first quarter sales dropped by 1.6%, with the general merchandise and clothing sectors continuing to experience challenging market conditions as poor weather conditions impacted demand in some seasonal categories. Grocery sales also dropped, coming in 0.5% lower than last year's first quarter, but the supermarket giant said they improved relative to the market due to outperformance from its 'Taste the Difference' range.

Smiths Group announced on Wednesday that the trustee of the Smiths Industries Pension Scheme has entered into a bulk annuity buy-in agreement with Canada Life. The FTSE 100 company said the buy-in policy covered liabilities totalling £176m relating to more than 2,000 legacy scheme pensioners and dependants. It was the scheme's second such policy with Canada Life, with the board saying that through a series of buy-ins, around £0.8bn of the Smiths Industries Pension Scheme liabilities had now been insured, and across the company's two main UK schemes around £1.6bn of the liabilities were now insured.

Newspaper round-up

Facebook’s plans for a global cryptocurrency, Libra, will warrant close scrutiny by governments across the world, according to one of the UK’s most senior financial regulators. Christopher Woolard, the executive director of strategy and competition at the UK’s Financial Conduct Authority (FCA) highlighted a series of potential issues with the digital currency, from consumer protection and privacy concerns to financial market stability. – Guardian

Labour’s deputy leader, Tom Watson, has called for a mandatory levy on gambling firms to fix the “broken” industry. He said some companies donated “frankly insulting” amounts of money to fund addiction treatment, and the voluntary system needed to be replaced. “The gambling market is broken and it’s up to the government to fix it,” he said in the Commons on Tuesday. “We don’t just need a voluntary patch, we need a full overhaul of the rules and regulations.” – Guardian

Tesla delivered a record 95,200 cars during the second quarter of this year, fulfilling the company's targets and beating analysts' estimates. The California-based electric car firm had said it expected to get 90,000 to 100,000 cars to customers, a target that was described as "aggressive" and that many expected it would miss. – Telegraph

Britain will fall short of its target to build 300,000 new homes a year by 2020 if it continues to rely on traditional building methods, according to MPs. In a report, the Commons housing, communities and local government committee is calling on the government to invest in modern methods of construction that would allow homes to be built more quickly and cheaply. – The Times

The estimated bill for decommissioning Britain’s North Sea oil and gas infrastructure has been cut by almost £9 billion in two years, but it is still expected to cost £51 billion, according to official estimates. The Oil & Gas Authority said that the likely bill had been reduced because of “continued improvement in planning and execution practices” and despite the fact that more infrastructure had been built since its original estimate of almost £60 billion in 2017. – The Times

US close

US stocks closed higher on Tuesday, with the S&P 500 setting yet another record close despite threats of new tariffs on European goods dampening much of the optimism seen following news of a possible trade deal between the world's two largest economies.

At the close, the Dow Jones Industrial Average was up 0.26% at 26,786.68, while the S&P 500 had gained 0.29% at 2,973.02 and the Nasdaq Composite closed 0.22% firmer at 8,109.09.

The Dow closed 68.25 points higher on Tuesday after Wall Street stocks ended in the green on the first day of July as participants digested news out of China, Japan and North Korea over the weekend.

Donald Trump stated on Monday evening that any trade deal with Beijing would have to be "somewhat tilted" in favour of Washington.

While sentiment was helped somewhat by the news at the weekend that Trump and his Chinese counterpart Xi Jinping had agreed to a ceasefire in the trade war, market participants turned a touch more cautious ahead of the bell on Tuesday as they waited on actual signs of progress in settling the dispute that had battered global trade, business sentiment and economic growth.