- FTSE 100 closes down 2 points at 7,633
- Flutter plans to shift main listing to the US
- Superdry mulls more cost cuts
4:40pm: FTSE 100 ends subdued day little changed
The FTSE 100 closed down 2.35 points at 7,632.74.
Just before the close, Inchcape confirmed it was reviewing options for its UK retail business, which could include a sale.
This followed approaches from a number of interested parties, the London-based automotive distributor said.
The statement followed a report by Sky News that said the company was "sounding out" possible bidders for the operation.
3:56pm: Kingfisher downgraded on weak French outlook, wage pressures
Kingfisher PLC (LSE:KGF) is down 2.1% after RBC Capital Markets downgraded the retailer to ‘sector perform’ from ‘outperform’.
The broker said it is relatively cautious on the outlook for France and consensus earnings near term, and sees valuation upside potential for some other UK retailers.
RBC highlighted labour cost inflation is a headwind with the minimum wage rising by 9.8% this year in the UK and 21% in Poland.
The broker has reduced EPS forecasts by 1-2% and said its 2025 and 2025 pretax profit forecasts are now c.5% below consensus.
3:24pm: IMI ticks higher after Berenberg upgrade
IMI ticked higher on Monday after Berenberg upgraded to ‘buy’ from ‘hold’.
It views IMI as an excellent turnaround, where management has successfully improved the margins, returns and growth profile of the business.
But, this is not yet reflected in a valuation (13x P/E, 10.9x EV/EBIT) that is a 2% discount to the wider sector, compared to an average 1% discount over the last decade.
“With an improved growth outlook versus its recent past, higher margins and returns, and a clearly strong outlook for [free cash flow], we view this relative valuation as illogical and expect the company to re-rate as this higher growth is evidenced over the next one to two years.“
Elsewhere, Berenberg has cut Rotork’s price target to 370p from 420p and reiterated a ‘buy’ rating.
2:44pm: US stocks make steady progress
US stocks made steady early progress on Monday as investors await key developments later in the week.
Shortly after the opening bell, the Dow Jones Industrial Average was up 0.1% to 38,158.46, the S&P 500 was up 0.1% at 4,895.81 and the Nasdaq Composite was up 0.2% at 15,481.67.
This week marks the busiest slate of the earnings season, with mega-cap tech names Microsoft, Apple, Meta, Amazon and Alphabet 0 posting results - alongside Dow components such as Boeing and Merck.
Meanwhile, the Federal Open Market Committee will begin its two-day policy meeting on Tuesday. Investors are nearly certain the central bank will keep rates steady.
The CME FedWatch tool puts a 97% probability on the Federal Reserve leaving rates unchanged.
Stocks on the move include iRobot, down 19% after Amazon scrapped plans to buy the robot vacuum maker.
1:48pm: Amazon scraps plans to buy iRobot
Amazon on Monday said it was scrapping its plans to buy the iRobot vaccum maker after the EU's antitrust authority objected to the plan over competition concerns.
"We're disappointed that Amazon's acquisition of iRobot could not proceed," said David Zapolsky, Amazon SVP and General Counsel.
Reports last week suggested the takeover was set to be blocked by the EU's competition watchdog.
The deal had previously been given the all-clear for the purchase by the UK government's competition watchdog.
The online giant moved to buy iRobot, maker of the Roomba cleaner, in August 2022 in a takeover deal set to cost $1.7 billion.
Regulators are worried that iRobot's tie-up with Amazon could make it difficult for other vacuum-makers to compete, especially if Amazon were to give the Roomba benefits over rivals on its e-commerce site.
1.31pm: Here’s a recap of the risers and fallers on the market today
Accesso Technology Group PLC (AIM:ACSO, OTC:LOQPF), a provider of queuing technology in the leisure, entertainment and cultural sectors, said it met its financial targets for last year - even after investing in new products and transitioning away from lower margin business.
Shares were up nearly 10% in response to the news.
Digital 9 Infrastructure PLC (LSE:DGI9) (Digital 9 Infrastructure PLC (LSE:DGI9)) shares rallied 10% on Monday after it revealed it would be winding itself down.
Management believes it is in the best interest of shareholders to begin the sale of its assets and start to bring the investment company to a close.
Inspecs Group shares dived 25% as the company warned trading softened significantly in December and would affect results for the year just ended.
Underlying profits for 2023 will be 16% higher than the previous year at £18 million, but this is still shy of market expectations, according to a statement from the eyewear manufacturer.
Vape distributor Supreme PLC (AIM:SUP) shares were off 5% after to UK government announced a sweeping ban on disposable vapes.
1:15pm: Flutter plans to transfer main listing to US
It's a big day for Flutter Entertainment PLC (LSE:FLTR) as shares debut in the US.
Peter Jackson, Chief Executive, commented: "With our NYSE listing effective today, this is a pivotal moment for the Group as we make Flutter more accessible to US based investors and gain access to deeper capital markets."
"We believe a US primary listing is the natural home for Flutter given Fanduel's #1 position in the US, a market which we expect to contribute the largest proportion of profits in the near future."
Fluttler will put the plans to shareholders, and if approved, it could see the main listing transfer to the US in the second or third quarter.
Flutter will retain its UK listing as a secondary listing.
It's the latest blow to the London market which has seen a number of firms head across the pond.
Shares have edged 0.2% lower on Monday.
1:05pm: Rising sea freight costs not a threat to inflation - Goldman
Goldman Sachs has played down the impact on inflation of rising sea freight costs amid disruption to Red Sea shipping.
The investment bank pointed out costs from Asia to Europe have risen by 350% and by 100% from Asia to the US, noting some commentators and investors worry that these cost increases could meaningfully raise global goods inflation.
Source: Bloomberg, Freightos, Goldman Sachs Global Investment Research
Goldman is less concerned for for two reasons.
First, the current increase in shipping costs does not coincide with the widespread factory shutdowns and transfer-driven demand surges that helped send goods inflation soaring in the aftermath of the pandemic, suggesting less scope for amplification of cost pressures today.
Second, international transport costs account for a small share of the price of final consumption goods (around 1.5% on average), with sea freight accounting for an even smaller share (around 0.7%).
Under reasonable pass-through assumptions, a 100% increase in the cost of sea freight therefore only raises core goods inflation by around 0.4pp and overall core inflation by around 0.1pp, it estimated.
The bank estimates higher shipping costs will raise global core inflation by roughly 0.1pp in 2024, with somewhat larger effects in Europe and somewhat smaller effects in the US.
“We therefore see only modest upside inflation pressure from Red Sea shipping disruptions barring a more significant increase in transport costs going forward,”Goldman concluded.
1:00pm: Inchcape explores UK retail sale - Sky
Inchcape PLC (LSE:INCH), the London-listed car dealer, is exploring a sale of its UK retail business, according to reports.
Sky News said Inchcape has begun sounding out prospective buyers of its domestic operations in recent weeks.
Bankers at Rothschild have been hired to oversee talks with bidders, in a deal Sky suggested could be worth several hundred million pounds, citing City analysts.
The division consists of 70 sites, employing 3,700 people, and works with car manufacturers including Audi, BMW, Jaguar, Toyota and Volkswagen.
Shares are up 1.6%.
12:35pm: Lloyds to scrap mobile bank branches
Lloyds Banking Group PLC (LSE:LLOY) is shutting down its mobile banking service this year, after it last week revealed plans to shed 1,600 jobs across its branch network.
The banking company has been informing staff and customers of plans to scrap the Lloyds Bank and Bank of Scotland mobile branches in May.
Lloyds runs the service as an alternative to high street branches, with vans visiting towns and cities across the UK.
But the lender said it has decided to end the service because it is being used less by customers.
A spokeswoman said: "Customers have used our mobile branches much less over time and some locations now have as little as two customers using the service.
12:10pm: Nasdaq seen higher ahead of big week of tech earnings
Stocks in New York are expected to post modest gains at the open on Monday ahead of a key week.
In pre-market trading, futures for the Dow Jones Industrial Average were flat, while those for the S&P 500 were up 0.1% and contracts for the Nasdaq 100 futures rose 0.3%.
Joshua Mahony at Scope Markets said today is “the quiet before the storm, with central banks and corporate earnings expected to make this perhaps the most important week in the first quarter.”
“The ever-reliable tech sector has helped drive much of the upside that took all three US indices into record territory last week, but the time has come to justify those lofty valuations.”
“Between Tuesday and Thursday, we see 22% of the S&P 500 report across just five tech names.”
On Wednesday, the FOMC will conclude a two-day meeting and announce its latest decision on monetary policy.
The US central bank is widely expected to leave interest rates unchanged but the focus will be on the accompanying language for any hints on the timing of future cuts.
Meanwhile, on Friday, non-farm payrolls data is due while a busy week of earnings sees numbers from tech heavyweights, Microsoft, Amazon, Alphabet, and Meta.
11:30am: BP told to ditch pledge to cut oil and gas output
Activist investor Bluebell Capital Partners has called on BP PLC (LSE:BP.) to ditch its commitment to cut oil and gas output as well as other key parts of its strategy to transform the company into a clean energy provider.
Bluebell, a London-based hedge fund that previously took on Danone (OTCQX:DANOY) and Glencore, wrote to BP chair Helge Lund in October shortly after acquiring a small stake in the London-listed energy major.
In the letter, seen by the Financial Times, Bluebell said BP’s pledge to reduce oil and gas production by 25% by 2030 compared with 2019 levels meant it was destroying shareholder value by moving away from hydrocarbons faster than society.
“This irrational strategy has, quite understandably, depressed the value of BP’s share price,” it said.
10:45am: Job vacancies drop in December - Adzuna
Job vacancies in the UK fell by the most in more than three years in December, according to new figures.
The data is another sign that resilient labour market is cooling amid high interest rates.
Figures in the latest Job Market Report published by online portal Adzuna showed advertised vacancies dropped 6.95% in December, the largest drop since June 2020.
Early data suggests January will see a similar sized fall, marking what could be the start of difficult year for jobseekers, Adzuna said.
The drop mirrors falls shown in official data from the Office for National Statistics.
Jobs data showed that between October and December, the number of vacancies in the UK fell by 49,000 on the quarter to 934,000, the ONS said.
Vacancies fell on the quarter for the 18th consecutive period, the longest consecutive run of quarterly declines ever recorded but still above pre-coronavirus (COVID-19) pandemic levels, the ONS added.
10:12am: Oil majors keeps London in the green
The FTSE 100 is in positive territory, although early highs.
Russ Mould at AJ Bell notes a "strong showing from heavyweight oil stocks has helped make up for weakness elsewhere.”
“Oil prices advanced thanks to a renewed escalation in Middle East tensions, with a further attack on shipping in the Red Sea by Houthi rebels and three US soldiers killed in a drone attack on a US service base on the border of Jordan and Syria," he explained.
Howeverm he pointed out that crude hitting its highest level since November "feels ominous given it adds inflationary pressure at a time when borrowers and the markets are hoping to see interest rates cut."
"Geopolitical factors seem to be propping up oil at a time when the wider dynamics of supply and demand look less than favourable for the energy market," he added.
9:38am: Supreme knocked by reports of vape ban
Shares in Supreme PLC (AIM:SUP) are a casualty of reports that disposable vapes are set to be banned as part of plans to tackle the rising number of young people taking up vaping.
Measures will also be introduced to prevent vapes being marketed at children and to target underage sales.
Prime Minister Rishi Sunak is expected to explain the plans during a visit to a school on Monday.
Shares in Supreme, a leading name in the e-cigarette and vaping market, are down 10% on the news.
9:15am: RyanAir narrows profit guidance after spat with online travel agents
A bit more on RyanAir which on Monday narrowed its full-year profit guidance to the bottom of a previously guided range after a spat with online travel agents (OTA).
Michael O’Leary’s airline expects full-year profit after tax between €1.85-1.95 billion from €1.85-€2.05 billion before.
RyanAir said while traffic and fares were ahead of prior year, close-in Christmas/New Year loads and yields were softer than previously expected as the firm lowered prices in response to the sudden removal of flights from OTA websites in early December.
It continues to target around 183.5 million financial 2024 traffic, despite the slightly lower third quarter load factors and Boeing delivery delays.
The news has put pressure on WizzAir, down 2.4% and British Airwats owner, IAG, down 1.7%.
8:47am: Blue-chips prosper supported by oil majors
Blue-chips remain in the green although gains remain modest - the FTSE 100 is now up
Away from the oil majors, BAE Systems is up 1.4%, boosted by the rising tensions in the Middle East.
Pearson, Compass and Informa are all up after being named in Citi’s top picks in the media sector but a broker downgrade has hit Schroders, down 3.4%.
Exane BNP has moved the downgraded the wealth management outfit to ‘underperform’ from ‘neutral.’
Elsewhere, shares in RyanAir have fallen around 3% after it narrowed its guidance to the bottom-end of a previously guided range.
Ferrexpo is down 2.5% after a Ukrainian court of appeal has confirmed a claim against Ferrexpo Poltava Mining for $125 million.
The claim against FPM relates to loan agreements.
8:15am: FTSE 100 supported by gains in oil majors
The FTSE 100 posted modest gains in early exchanges supported by gains in oil majors as tensions rise in the Middle East.
At 8:15am, London’s blue-chip index was up 4.73 points at 7,639.82 with the FTSE 250 down 38.05 at 19,299.97.
BP rose 2.0% and Shell climbed 1.5% as the oil price spiked after attacks by Iranian-backed militants on US troops.
The price of Brent rose 0.5% to $83.91, taking gains in the past month to more than 10%.
Elsewhere, Superdry rose 6.9% after confirming reports it is in talks to cut more costs from the business.
However, it did not confirm reports that stores could close and jobs could go.
Meanwhile, Kingfisher fell 2.3% after RBC downgraded to ‘sector perform’ from ‘outperform’, with a price target of 235p.
7:53am: Government mulls summer sale for share in NatWest - report
The UK government has asked City of London firms to submit proposals to work on a potential retail offering of NatWest Group PLC (LSE:NWG) shares, in what would be the most high-profile privatisation in London this year.
The Times said the multibillion-pound public sale of shares in the high street lender could take place as soon as June, in a move that would evoke Margaret Thatcher’s “Tell Sid” privatisation spirit ahead of a general election.
Bloomberg reported the advisers must present their bids by late February, with the Treasury hoping to run an announcement about the share sale alongside its budget on March 6, citing several people familiar with the matter.
Chancellor of the Exchequer Jeremy Hunt unveiled plans in November for a potential retail sale within 12 months, with any divestment “subject to market conditions and achieving value for money.”
The government, which is NatWest’s biggest shareholder, held a stake of almost 36% as of January 19, according to a filing.
Economic secretary to the Treasury Bim Afolami told Bloomberg last week that prospects for a retail offer of the bank’s shares were “looking good.”
7:29am: Superdry looks to save more costs, coy on detail
Superdry PLC (LSE:SDRY) on Monday confirmed recent press speculation that it is working with advisors to explore the “feasibility of various material cost saving options.”
On Saturday, Sky News reported the company was weighing a radical restructuring that could involve significant numbers of store closures and job cuts amid weak sales.
Sky said the company and its advisers at PricewaterhouseCoopers are working on plans that could lead to a company voluntary arrangement or restructuring plan.
Sky said this could be aimed at closing underperforming shops, with a commensurate impact on jobs, and forcing through rent cuts with landlords.
7:00am: FTSE 100 called lower; oil prices rises
The FTSE 100 is expected to open lower ahead of an important week of interest rate decisions, and after Evergrande was ordered to be wound up.
Spread betting companies are calling London's lead index down 11 points after closing up 105.36 points at 7,635.09 on Friday.
Meanwhile oil prices have risen amid the latest escalations in the Middle East.
In Hong Kong, Evergrande shares plunged 21%, before the stock exchange halted trading.
A Hong Kong court on Monday ordered the liquidation of battered Chinese property developer Evergrande, dealing another blow to the firm that has become the symbol of a property crisis that has sent shivers through the economy.