- FTSE 100 closes down 12 points at 7,722
- Manufacturing sector contracts in December
- Aldi and Lidl report strong Christmas sales
4:40pm: FTSE 100 closes down but off lows
The FTSE 100 closed in the red on the first trading day of the year although off earlier lows.
At the close, London's blue-chip index was down 11.72 points, 0.2%, at 7,721.52 while the FTSE 250 fell 177.83 points, 0.9%, at 19,511.80.
'After an initial promising start to the day, stock indices mainly dropped into the red on heightened geopolitical tensions in the Middle East', says Axel Rudolph, senior market analyst at online trading platform IG.
BP benefited from a rising oil price while pharma and telcoms stocks also found favour.
4:00pm: BT misses Huawei deadline
BT has missed the deadline to remove Huawei equipment from its mobile network, following a UK government order that the Chinese company’s technology posed a security risk.
“All 4G and 5G data sessions and voice calls are now delivered by non-Huawei core equipment – meaning that over 99% of all core traffic is now being served by non-Huawei kit,” said a BT spokesman.
The remaining 1% of data that is yet to be migrated off of Huawei tech is on EE’s old 2G and 3G networks.
BT said the process of removing Huawei kit from the core of its networks, which involves migrating 30 million active customers, has been “unprecedented in terms of scale, cost and complexity”.
3:26pm: Tesla overtaken by BYD as top EV seller
China’s BYD has overtaken Elon Musk’s Tesla to become the world’s top-selling electric car maker.
BYD, which has been backed by the US investment billionaire Warren Buffett since 2008, is on track to beat Tesla’s production for second consecutive year.
BYD, which stands for Build Your Dreams (NYSE:DRJ), said that it produced 3.02 million new energy vehicles in 2023, ahead of Tesla which announced that it made 1.84 million cars.
However, BYD sales figures include 1.6 million battery-only cars, and 1.4 million hybrids, which means Tesla is still the leader in the production of electric battery-only cars.
However, in the final quarter of last year BYD outsold Tesla in battery-only car sales - 526,000 to 484,000 - for the first time.
2:53pm: Tech tumbles as Wall Street opens lower
US stocks started 2024 firmly in the red as the end of year rally in tech stocks petered out.
Shortly after the opening bell, the Dow Jones Industrial Average was down 105.60 points, 0.3%, at 37,583.94, the S&P 500 was down 33.88 points, 0.7%, at 4,735.95 and the Nasdaq Composite was down 211.67, 1.4%, at 14,799.69.
Leading tech stocks took a breather following the strong end to 2023, with Apple down 2.5% after the Barclays downgrade to ‘underweight’ and Tesla losing 0.9% after fourth quarter delivery figures.
The quarter saw Tesla lose its spot as the world’s top-selling electric vehicle manufacturer to Chinese group BYD.
Elon Musk’s firm delivered 484,500 cars in the fourth quarter, more than the 483,000 forecast, but it was surpassed by BYD, which sold 526,400 vehicles in the same period, outperforming the US manufacturer for the first time.
Another EV maker, Rivian plunged 7.4% after the California-based company, which produces its cars in Illinois, delivered 13,972 EVs in the final three months of 2023, missing analyst expectations of 14,114.
2:12pm: HSBC considers move for Tesco Bank
HSBC Holdings is the latest lender to consider a move for Tesco Bank, according to Sky News
Sky said HSBC has submitted an indicative offer for Tesco Bank, which has about five million customers and employs more than 3,500 people.
Rival UK banks Barclays and Lloyds Banking Group are also reported to have tabled offers in the past.
1.33pm: Here’s a quick recap of the top risers on the junior market today
Oriole Resources PLC (AIM:ORR) was up 11% after providing updates on its Bibemi and Mbe gold projects in Cameroon. Already, significant investment has been made in Bibemi, with further progress expected at Mbe.
Concurrently, negotiations and renewals for other projects, including Senala in Senegal and Wapouzé, are underway, contributing to the optimistic market response.
Shares in LungLife AI Inc (AIM:LLAI), a developer of diagnostic solutions for early lung cancer detection, jumped 30% following the successful validation of its LungLB test.
Shares in Plant Health Care PLC (AIM:PHC, OTCQB:PLHCF) nudged 8% higher following Brazil's federal approval of its innovative nematicide, TEIKKO, for the 2024/25 soybean season.
Shares in Sareum Holdings PLC (AIM:SAR) surged 18% after the company revealed that it will soon receive a US$137,500 cash payment after co-development partner, the CRT Pioneer Fund (CPF), signed a development and commercialisation licence with a US biopharma company.
1:03pm: Chase UK aims to make profit next year
Chase UK could start becoming profitable as soon as next year, as the bank is striving to be a "major player" in Britain as people hunt for better returns on their savings.
The digital bank, owned by New York-based JP Morgan Chase & Co, has amassed more than two million customers since launching in Britain in 2021 and manages around GBP15 billion in deposits.
Managing Director Shaun Port told the PA news agency that the UK spin-off is growing quickly and could begin to be profitable from 2025.
Port told PA: "We've been building the bank rapidly, so we believe that we can bring the UK business to profitability in 2025.
"We want to be a major player in the UK banking scene, and to do that, we obviously need to make banking with Chase compelling."
12:32pm: Ascential inks new financing deal
A very quiet day for company news, but Ascential PLC (LSE:ASCL) has announced the completion of the sale of its digital commerce business, alongside a new financing deal.
The London-based business-to-business media and events has sold its digital commerce business to Omnicom Group (NYSE:OMC).
The company announced the sale in October, as well as the disposal of its product design business to funds advised by Apax Partners LLP for a combined enterprise value of £1.4 billion.
As a result, Duncan Painter has now stepped down as chief executive officer, replaced by Philip Thomas, the current CEO of Ascential Intelligence & Events.
Ascential has also agreed a four-year, multi-currency revolving credit facility of £200 million with a syndicate of banks.
Shares are down 0.5%.
12:03pm: US markets called lower, Apple downgraded
Stocks are expected to start 2024 on the back foot ahead as investors look ahead to key economic data on the health of the labour market.
In pre-market trading, futures for the Dow Jones Industrial Average were down 0.3%, while those for the S&P 500 were 0.5% lower and contracts for the Nasdaq 100 futures declined 0.8%.
Joshua Mahony at Scope Markets said this week looks to bring traders back to their desks “with a bang, as we buckle up for a raft of data that should help shape expectations after a period of bullish exuberance.”
“The recent pricing around Federal Reserve easing looks to have gone a step too far, with the Dot Plot mapping out three hikes this year rather than the six cuts expected by the markets,” he suggested.
He thinks Wednesday’s Federal Reserve meeting minutes could help hammer home “the disparity that currently exists between market and Fed rate expectations.”
Later in the week, investors will have non-farm payroll figures to review with job vacancy, ADP payroll and weekly jobless claims figures before then.
Stocks to watch include Apple, down 1.8%, after Barclays downgraded to ‘underweight’ on expectations of soft demand for its latest iPhone.
““We expect reversion after a year when most quarters were missed and the stock outperformed,” the analysts wrote in a note on Tuesday, reported by Bloomberg.
“Our checks remain negative on volumes and mix for iPhone 15, and we see no features or upgrades that are likely to make the iPhone 16 more compelling.”
11:30am: Reckiit recalls some baby formula products
Baby formula maker Reckitt Benckiser’s Mead Johnson Nutrition has voluntarily chosen to recall certain batches of baby formula powder due to possible bacterial contamination, according to the U.S. Food and Drug Administration.
The possibly impacted batches of Nutramigen Powder, an infant formula specially designed for children allergic to cow’s milk, were produced in June and distributed throughout the summer.
“Based on the limited availability of the remaining stock of this special infant formula, it is believed that much, if not all, of the products recalled in the United States have been consumed,” Reckitt said in a statement published by the FDA on Sunday.
The company said no “illnesses or adverse events” have been recorded yet but urged consumers who have purchased Nutramigen to check the bottom of the can to see if they have one of the possibly contaminated batches.
Shares have not taken a hit though, up 0.4%.
10:58am: Manufacturing decline has further to run
Gabriella Dickens at Pantheon Macroeconomics thinks today’s weak manufacturing figures “suggests the recent decline in manufacturing output probably has further to run.”
She noted while new orders edged higher, they remain well below the average since 1992 and consistent with a further decline in demand.
“All told, we think manufacturing output will continue to decline over the next few months,” she added.
But on a brighter note, Dickens explained that “given that the manufacturing sector accounts for only around 10% of overall economic output, and the services sector activity looks set to recover, we think a recession will be avoided.”
10:26am: Bitcoin soars on ETF hopes
Bitcoin has started 2024 in buoyant fashion, with the world’s foremost cryptocurrency soaring above $45,000 for the first time since April 2022.
On Monday alone, BTC/USD jumped 4.5%, followed by another 2.5% this morning to bring the pair up to $45,312.
Sources told Reuters over the weekend that spot bitcoin ETF issuers may be informed either today or tomorrow of the fate of their applications in preparation for a 10 January launch.
This could see a dozen or more bitcoin ETFs launched on the New York stock market for the first time in bitcoin’s history,
10:00am: UK manufacturing remains in the doldrums
The manufacturing sector remains despressed, declining for a 17th successive month in December, amid declines in production and growing job losses, a closely-watched report showed.
The S&P Global UK manufacturing purchasing managers’ index fell back more sharply than expected to 46.2 in December - after hitting a seven-month high of 47.2 in November.
All five of the PMI sub-indices (new orders, output, employment, stocks of purchases and suppliers' delivery times) remained at levels signalling a deterioration in operating conditions.
Rob Dobson, director at S&P Global Market Intelligence, said: “The downturn has hit manufacturers’ confidence, which dipped to its lowest level in a year, and encouraged renewed cost caution with further cutbacks to stock levels, purchasing and employment. “
“With concerns about high interest rates and the cost-of-living crisis hurting demand, the outlook for manufacturers in the months ahead remains decidedly gloomy.”
9:15am: WPP eye outgoing BP boss as next Chair - Sky
A bit of City gossip to report.
Outgoing BT Group PLC (LSE:BT.A) chief executive Philip Jansen has been approached about the next chair of marketing services firm WPP, according to a report from Sky News.
Jansen, who is set to leave BT in the spring, is reportedly one of a number of candidates to have been considered in recent weeks for the WPP chairmanship.
Exclusive: Philip Jansen, the outgoing chief executive of BT Group, has been approached about replacing Roberto Quarta as the next chairman of WPP, the FTSE-100 marketing services provider. https://t.co/pZp1DS784W
— Mark Kleinman (@MarkKleinmanSky) January 1, 2024
Sky cited City sources as saying WPP's search was yet to reach an advanced stage and that there was no certainty that Jansen or WPP would opt to progress his candidacy further.
Shares in WPP are down 0.4%.
8:50am: Tesco up as Aldi and Lidl reports strong Christmas sales
Retailers have been marked higher ahead of trading updates which will show the winners and losers over the festive period.
Alongside figures showing shop price inflation was unchanged in December, discount retailers Aldi and Lidl have reported strong Christmas sales.
Aldi said that sales topped £1.5 billion for the first time in the four weeks to Christmas Eve, with sales up 8% year-on-year, while Lidl said that its deluxe product range underpinned a 12% year-on-year sales increase in December, as shoppers sought a “touch of luxury at lower prices”.
Aldi and Lidl enjoy record Christmas sales as shoppers seek to stretch festive budgets – business live https://t.co/RIE9rYIv8E
— Guardian news (@guardiannews) January 2, 2024
Both chains said that Friday December 22, the last weekday before Christmas, proved to be a record trading day with Aldi, the UK’s fourth biggest chain, saying 2.5 million customers used its stores for their full festive shop.
Food retailers Tesco is up 0.9% and Sainsbury is up 0.1% while Marks & Spencer is up 1.6%.
M&S also drew praise from BNP Paribas Exane which named it among its top picks in the European retail industry for 2024 and a potential winner from the Christmas period.
B&M European Value Retail is also enjoying a good morning, up 1.6%.
8:17am: Bright start for stocks as oil majors climb
The FTSE 100 has made a bright start to the year as a rise in the oil price boosted index heavyweights, BP PLC (LSE:BP.) and Shell PLC (LSE:SHEL, NYSE:SHEL).
At 8:15am, London’s blue-chip index was up 14.31 points, 0.2%, at 7,747.55 while the FTSE 250 was down 12.24 points, 0.1% at 19,677.39.
Richard Hunter, head of markets at interactive investor, commented “Whether markets can continue the momentum of a strong year-end rally remains to be seen, but the early indications give some cause for optimism.”
But Hunter added initial tests of investors’ mettle will come thick and fast during the month with the release of the US non-farm payrolls report on Friday.
The price of Brent crude rose 1.6% to $78.25 in early trading after Iran sent a warship into the Red Sea increasing fears of an escalation in hostilities.
Iran dispatched its warship in response to the US Navy’s sinking of three Houthi boats over the weekend.
The rise pushed BP up 1.1% and Shell 0.9%.
Elsewhere, on a quiet day for company news Balfour Beatty rose 1.1% after announcing an initial £50 million tranche of its 2024 share buyback programme.
Analysts at Liberum expects that there will be £100 million of buybacks in total and expects this to maintain “the upward pressure on the shares.”
7:52am: UK first-time buyers lowest in a decade
Some data on the housing market as well, with the number of first-time buyers in the UK, who bought a home with a mortgage, falling to its lowest level in a decade in 2023, according to a leading lender.
Yorkshire Building Society said there were an estimated 290,000 first-time buyers in 2023, down a fifth compared with 2022, when the number reached 370,000, and the lowest since 2013, when the total was 260,000.
First-time buyer numbers ‘were lowest in a decade in 2023’ https://t.co/8cc2qsoOcn
— ITV News (@itvnews) January 1, 2024
Yorkshire said were finding it harder to meet lenders’ affordability requirements.
Ben Merritt, the Yorkshire’s director of mortgages, said: “First-time buyers are the lifeblood of the market and are still clearly keen to buy … The wider market relies on them, not least to support purchases higher up the chain.”
7:36am: Shop price inflation unchanged in December
It's a quiet morning for company news but traders will be examining shop price inflation data as they dust down their desks after the holiday break.
The figures showed UK shop price inflation was unmoved at 4.3% in December as a price rise on non-food items offset easing costs on food.
The British Retail Consortium also warned that cost pressures threaten to put an end to cooling inflation in 2024.
The BRC-NielsenIQ shop price index was up 4.3% in December from a year before, the annual rise slower than the three-month average rate of 4.6% and the lowest since June 2022.
Shop price inflation remains flat as food prices fall https://t.co/XzFyBgi6oj
— Retail Week (@RetailWeek) January 2, 2024
Food inflation slowed to 6.7% last month, down from 7.7% in November, falling for an eighth month in a row.
But non-food price inflation rose to 3.1% from 2.5% in November as prices bounced back after Black Friday discounts and before the January sales.
Helen Dickinson, the chief executive of the BRC said: “Retailers will continue to do all they can to keep prices down in 2024, but there are obstacles on the road ahead [including] new border checks for EU imports, [and] hundreds of millions more on business rates bills from April."
7:00am: Stocks called higher ahead of PMI figures
The FTSE 100 is expected to start the New Year on the front foot amid a raft of manufacturing PMI data, including for the UK.
Spread betting companies are calling London’s blue-chip index up by around 10 points after closing up 10.50 points at 7,733.24 on Friday.
In Asia, China's manufacturing sector saw a slight expansion in activity last month, according to survey data.
The Caixin purchasing managers' index edged up to 50.8 points in December from 50.7 in November.
Figures for the UK will be released at 0930 GMT.
Investors will also be reacting to data which showed UK shop price inflation was unchanged at 4.3% in December, its lowest level in a year and a half.
However, the British Retail Consortium warned that cost pressures threaten to put an end to easing inflation in 2024.