Daily market update: Nvidia, FTSE reshuffle, Pets at Home, Mobico

While it may feel as if the Budget is the only story of the day, the UK stock market is a broader church and its plethora of international earnings means the index is driven by more than just UK activities.

The FTSE 100 was lifted by miners and technology names amid growing hopes for a US interest rate cut and a new contender to dethrone Nvidia as AI king. Also propping up the index was a rally in the UK banking sector as investors hoped Rachel Reeves would find the magic solution to drive economic growth.

Nvidia

It would be a stretch to say Nvidia had the AI chip space all to itself, but it certainly enjoys a dominant market position.

Signs of increasing competition to this near-monopoly status have prompted some jitters for a company which has, until now, been seen as the AI king.

It’s natural and healthy for other players to come in and take some of its lunch.

Google-owner Alphabet looks the prime candidate with its well-received Gemini model and custom chips, as well as reports it might start supplying Meta Platforms.

Broadcom, which helps design and manufacture Alphabet’s chips, has been pulled higher in its orbit while names linked to Nvidia such as CoreWeave have been dragged lower.

These developments don’t mean Nvidia is a busted flush by any means but there may be some continuing volatility in the share price as investors try and work out the implications for profitability and growth of a shifting competitive backdrop.

FTSE reshuffle: Princes Group, Shawbrook, WPP

Two of this year’s highest profile UK IPOs are primed to grab spots in the FTSE 250 at the next quarterly index reshuffle.

Tinned goods provider Princes Group and lender Shawbrook are in prime position to join the mid-cap index in December, bringing some much-needed good news considering a lacklustre start to their lives on the market.

Shawbrook is only trading marginally above its IPO price while Princes is below its listing level. Admittedly, markets have been volatile ahead of the Budget and amid concerns around an AI bubble, so the backdrop hasn’t been favourable to new listings.

Many investors steer clear of IPOs until the companies have been on the market for a while. Princes’ listing looked like a slog given the shares were priced at the bottom of its range, and investors have continued to show little appetite for the food group.

In both cases, it might be a situation where they need to let business performance do the talking to truly win over the investment community. However, being part of the FTSE 250 will trigger buying from index funds, suggesting there might be some brief support for the shares.

WPP looks set to lose its FTSE 100 place at the reshuffle, paying the price for a succession of profit warnings that have destroyed its market value. The company is already battered and bruised, and losing FTSE 100 status would round off an annus horribilis for the advertising agency.

The final index reshuffle decisions will be based on market close data on 2 December.

Pets at Home

Britons may love their pets, but times are hard, and they’re also going to try and seek out the best deals and cut back on nice-to-haves like treats and toys. That’s hurting Pets at Home’s retail business, which faces strong competition from non-specialist retailers like supermarkets.

These struggles saw CEO Lyssa McGowan depart as the company warned on profit back in September. Things haven’t got any better since and now her interim replacement – executive chair Ian Burke – is launching a restructuring to move Pets at Home from mangy mutt to pedigree pooch in the eyes of the market.

This includes ‘investing’ in price cuts, refreshing product ranges and taking out costs. Whether this proves enough in an environment where people have less to spend on their feathered and furry friends remains to be seen.

The one positive area for Pets at Home has been its veterinary arm, which has grown rapidly in recent years, but this is not enough to make up for the failings in the core retail business. The company is fast running out of time to whippet itself into shape.

Mobico

National Express owner Mobico feels like it has been in the garage for repairs for years. Recently appointed boss, executive chair Phil White, is engaged in yet another effort to get the share price spluttering into life.

This involves cost savings and selling off underperforming assets but also trying to get other parts of the business to take some driving lessons from its Spanish arm ALSA. This operation is thriving in comparison with the rest of the group and expanding beyond its Spanish base with a major contract win in Saudi Arabia.

On a company-wide basis, there’s little sign of tangible progress so far, with operating profit for 2025 expected to come in at the lower end of expectations.

The core coach business is seeing increased competition, demand in UK buses has been weak, and Mobico is racking up losses on a WeDriveU transit contract in Washington.