- FTSE 100 closes 1 point higher
- AstraZeneca and Rolls-Royce lead losses, Ocado and Frasers climb.
- Tritax and UK Commercial Property to merge, as Blackstone also plans property giant.
4.45pm: FTSE finishes flat
At the close, the FTSE 100 had added one point on the day to finish right where it started at 7,574 points.
4.00pm: SSP's latest acquisition underlines strategy appeal, says broker
SSP’s acquisition of Airport Retail Enterprises (ARE) in Australia, announced on Sunday, should add 3% to group revenue and give it entry into four new Australian airports, says broker Jefferies.
Post completion, SSP will operate around 100 units across 11 of the largest 19 airports in Australia.
It’s a move consistent with Uppercrust owner SSP's strategy, adds the broker, and allied to strong underlying trading and M&A upside builds more confidence in the investment case.
A more than 20% discount to its pre-COVID PE multiple does not reflect the enlarged opportunities and a higher revenue growth rate.
3.50pm: Blackstone to merge portfolio to create property giant
Private equity firm Blackstone is reportedly set to create one of the UK’s largest industrial property landlords through a merger of subsidy warehouse owners.
St Modwen and Industrials Real Estate Investment Trust (REIT) will be merged with assets from some 25 other deals to form the property giant.
According to a staff memo, cited by Bloomberg, the new firm will be called Indurent and boast over 200 properties, with a combined size of 26 million square feet.
The move would come on hopes UK firms continue to cut supply chains in a bid to reduce reliance on China, in turn increasing warehouse rental prices domestically.
3.30pm: Bitcoin continues to climb
Bitcoin (BTC) closed above the $48,000 (£38,057) barrier for the second time in 23 months on Sunday, marking a return to form for the world’s largest cryptocurrency.
The BTC/USD pair continued to rocket higher today, and was within touching distance of $49,000 in mid-afternoon trades.
Bitcoin is now up nearly 15% week on week, a sharp u-turn from its surprisingly poor post-ETF approval performance.
One month after the US Securities and Exchange Commission (SEC) gave the nod to bitcoin-linked exchange-traded funds, the spot markets finally appear to be moving in the anticipated direction.
Ark Invest’s ARKB ETF became the latest bitcoin ETF to net more than $1 billion in assets under management, joining BlackRock’s iShare Bitcoin ETF (IBIT), the Fidelity Wise Origin Bitcoin Fund (FBTC) and the Grayscale Bitcoin Trust (GBTC).
2.55pm: US markets kick off the week flat
US stocks opened little changed on Monday, with the S&P 500 continuing a run of form above the 5,000 mark.
Shortly after the opening bell the S&P 500 sat at 5,027, following Friday’s close above the mark for the first time ever.
The Nasdaq and Dow Jones also sat broadly flat at 15,995 and 38,704 respectively as the week’s trading got underway.
Apparel and footwear brand VF Global led the way with gains of 8% as the markets opened, with Airbnb and Paramount also rising.
Amid a quiet day for earnings, Arista Networks shares climbed 3.8% ahead of the firm’s fourth-quarter update.
Investors also awaited an update of the US government’s budget on Monday morning, which comes after a deficit of US$314 billion was reported for December.
Last January’s figure marked a deficit of US$129 billion, with consensus estimates placing Monday’s reading at US$21 billion.
1.55pm: AstraZeneca and Rolls-Royce drag FTSE 100 lower
Losses by Rolls-Royce Holdings PLC (LSE:RR.) and AstraZeneca dragged the FTSE 100 lower come Monday lunchtime.
AstraZeneca found itself still reeling from a disappointing earnings release late last week, with brokers having punished the pharmaceuticals giant over an unchanged dividend and lack of research and development newsflow.
AstraZeneca downgraded as analysts highlight ‘underwhelming’ year-end
Indeed, shares slipped a further 1.9% on Monday, following losses last week, with Barclays noting the stock now presented an opportunity.
“The last time AstraZeneca moved that much on a print, the magnitude of the earnings per share miss [and] subsequent downgrades were far greater,” the bank said on Monday.
“We think this presents a compelling entry point for a best-in-class company.”
Barclays reiterated an ‘overweight’ rating for the firm as a result, alongside offering a share price target of 12,500p - a prospective rise of 28% on Friday’s close.
UBS brokers were less optimistic though, highlighting fears of accelerating costs at AstraZeneca, which prompted a repeated ‘sell’ rating and a lowered price target of 9,900p.
Rolls-Royce dipped 3.5% on Monday meanwhile, following gains of almost 50% over the past six months.
The FTSE 100 retreated 13 points to 7,558 as a result of the two heavyweight’s declines, with losses by NatWest also contributing.
NatWest knocked lower, £350mln banker bonuses rumoured
Shares in the lender sat 1.7% lower following a weekend Sky News report that the government-backed lender intends to pay out £350 million in staff bonuses before its impending retail share offer later this year.
1.35pm: Here are some of today's small-cap risers
Artemis Resources Ltd (ASX:ARV, AIM:ARV, OTCQB:ARTTF) was a top mover in the junior mining segment, moving upwards 12.7% after today providing an exploration update on its projects in West Pilbara, focusing on the potential of its Kobe and Osborne sites for lithium extraction.
Recent drilling has revealed sub-vertical orientations of pegmatites at these locations, with one drill hole possibly stopping short of the Osborne target.
Fabless chipmaking small-cap Sondrel (Holdings) PLC’s surprise rally on the AIM market showed no signs of slowing down on Monday as shares climbed a further 27.5%.
Late last week, a Daily Mail feature quoting “a source with knowledge of the matter” revealed that Sondrel played a key part in developing Tesla boss Elon Musk’s brain-computer interface Neuralink.
And finally, Malvern International PLC (AIM:MLVN) rose 5% after the UK education group announced revenues this year would be up 79% to £11.3 million.
The AIM-listed group is also expected to post an underlying profit of £300,000.
1.15pm: Shawbrook mulling London IPO
Challenger bank Shawbrook is reportedly mulling an initial public offering in London for the second time after shelving plans for a £2 billion listing in 2022.
Owners BC Partners and Pollen Street Capital, which bought the bank in 2017 for £868 million, are reportedly exploring the listing, as per The Times.
The listing would see plans for Shawbrook to go public revived after initially being scrapped on the back of market volatility and a slump in deal making in 2022, offering a boost for the London market given what has been a period of muted activity since.
1.00pm: UK expected to have fallen into recession
Many City economists are anticipating official figures due on Thursday will reveal that the UK fell into recession late last year.
According to Bloomberg, 23 of 37 City economists responded to a survey predicting a minor drop in UK output over the three months to December.
The average anticipated 0.1% drop in gross domestic product would follow another 0.1% decline (GDP) between July and September.
Given the second consecutive quarter of negative growth, the UK would therefore officially sit in a technical recession for the first time since the pandemic, or since 2009 when not accounting for Covid-19-related lockdown measures.
The Office for National Statistics will confirm whether or not the UK has indeed dipped into recession this week, with official GDP figures due on Thursday.
12.30pm: US stocks called flat
Stocks in the US are expected to open broadly flat on Monday morning, with the S&P 500 holding firm above the 5,000 mark.
As per pre-market trading, futures for the Dow Jones were off 0.07% at 38,721, while the S&P 500 and NASDAQ each climbed marginally.
Though a quiet day on the earnings side, Arista Networks is due to release its latest quarterly report, with shares in the firm sitting 3% higher in pre-market trading.
US government budget figures are anticipated for January meanwhile, after a deficit of US$129 billion was reported for December.
12.07pm: Many Body Shop outlets to ‘shut for good’ - analyst
More on Body Shop now and analysts warn that the rumoured appointment of administrators would likely result in the closure of many outlets indefinitely.
Commenting on reports that the cosmetics firm could fall into administration as early as this week, Hargreaves Lansdown analysts said cuts would probably follow.
“Whatever the outcome, it looks likely that many shops will shut for good, opening up fresh holes in high streets across the UK,” Susannah Streeter said on Monday.
Operating some 200 stores, Body Shop was bought by private equity firm Aurelius just six weeks ago, with tough results for the Christmas period revealing a lack of working capital.
“Administration will mean the company is protected from compulsory liquidation and offers legal protection from creditors’ demands,” Streeter added.
“It will give Aurelius breathing space to restructure and close highly underperforming stores and refocus attention on e-commerce sales.”
11.40am: Two-year fixed mortgages see largest drop since 2022, Santander latest to cut
Average two-year fixed-rate mortgages saw their largest decline since late 2022 between January and February, Moneyfacts has reported.
Declining from 5.93% to 5.56%, the 0.37% drop in fixed two-year fixed rates was the largest recorded month-on-month since December 2022, the comparison site said.
Average Interest on five-year fixed mortgages also fell, slipping from 5.55% to 5.18%.
“There have been big expectations for fixed rates to fall further, and whether now is the right time to refinance will come down to an individual’s circumstances,” Moneyfacts finance expert Rachel Springall commented.
“Lenders are in constant review of their ranges, and it is likely rates will fluctuate in the coming weeks due to the noises surrounding future rate expectations.”
Fixed-rate deals remain cheaper than standard variable-rate mortgages, Moneyfacts added, with the bank rate “unlikely to move for a few months yet”.
Santander opted to cut rates on Monday, just three weeks after becoming the first major lender to implement hikes this year, with the bank's mortgages set to enjoy reductions of between 0.05% and 0.16%.
11.15am: In case you missed it - Frasers buoyed on buyback, FTSE slips
Mike Ashley’s Frasers Group PLC (LSE:FRAS) climbed 3.4% after signalling a new £80 million share buyback and upping its stake in N Brown Group PLC (AIM:BWNG) on Monday morning.
A maximum of 10 million ordinary shares will be repurchased through the programme, the Sports Direct and Jack Wills owner said, which kicked off on Monday and will run until April 28, when the firm’s financial year ends.
“The purpose of the programme is to reduce the share capital of the company,” Frasers added in an update to the market.
Mike Ashley’s Frasers kicks off new buyback
Ocado Group PLC (LSE:OCDO) and Burberry Group PLC (LSE:BRBY) also lead the way of the FTSE 100 risers come mid-morning, climbing 5.8% and 2.9% respectively.
Burberry’s gains come after the stock has faced year-to-date losses, with interactive investor analyst Richard Hunter noting market players had sought out a “bargain” on Monday morning.
Deutsche Bank analysts put out a positive note on the UK’s online food delivery sector meanwhile, sending shares in FTSE 250-listed Just Eat up 6.5%.
The macro impact to consumers' appetite for the likes of online grocery offerings is easing, according to the bank, signalling a resurgence in demand.
Shares in Entain also ticked up 1.5% in the wake of Sunday night’s Super Bowl, where its joint venture BetMGM acted as Twitter’s live odds partner for the event, which saw Travis Kelce’s Chiefs take home the trophy in overtime.
10.45am: IMF head signals mid-year interest rate cuts
Kristalina Georgieva, chief of the International Monetary Fund, has signalled confidence in the world economy avoiding a major downturn as nations recover from the effects of high interest rates.
Such high interest rates could start to be retracted from midway through this year meanwhile, she said, as inflation looks to come under control.
“We are very confident that the world economy is now poised for this soft landing we have been dreaming for,” she told the World Governments Summit in Dubai.
“I expect to see by mid-year interest rates going in the direction inflation has been going on for the last year.”
The FTSE 100 regained ground on the news, rising from a daily low of 7,557 to sit 3 points lower at 7,569.
10.23am: London rent prices slow in January
London rental price growth looks to have slowed in January as landlords pulled out the stops to tempt tenants back to the market.
Some 41% more rental properties were available in London than last year during the month, according to estate agency Chestertons.
Such properties remained on the market for longer in the face of muted demand meanwhile, as per Rightmove, at 39 days rather than 33.
The result was a 76% uptick in the number of landlords reducing asking rental prices over the first month of the year, Chestertons noted.
“We have seen a significant increase in landlords bringing their property to market as they have been attracted by the substantial rent increases,” Chestertons letting head Adam Jennings said.
“This influx of properties has led to more choice for tenants and as a result, many landlords have decided to lower their rent expectations.”
The news comes as high interest rates continue to plague the German property sector, with a coinciding switch to remote working having hit prices of office space in recent months.
According to German banking association VDP, German office prices declined by 13% over the final quarter of last year - their sharpest decline in two decades.
10.05am: Tritax Big Box and UKCM deal to kick off more mergers - analysts
A merger between real estate investment trusts (REITs) Tritax Big Box and UK Commercial Property (UKCM) could pave the way for more mergers in the sector.
That’s according to RBC Brewin Dolphin analysts, who noted that the £924 million all-paper bid from Tritax to create the UK’s fourth-largest REIT would help bring British trusts in line with larger peers across the Atlantic.
“At their current scale, the UK’s REITs are limited by their size,” RBC Brewin Dolphin's John Moore commented.
“This has an effect on the capital they can attract, the terms on which they can borrow, and ultimately the deals they can do. Combine them all and you have just one of the main North American property asset managers - they simply can’t compete on a global scale.”
Combined, Tritax and UKCM would manage a portfolio worth approximately £6.3 billion, generating over £290 million in rental income annually.
Tritax tables £924m all-paper deal for UK Commercial Property REIT
The deal itself comes after mergers between LondonMetric and LXi, alongside Abrdn Property Income Trust and Custodian Property Income REIT, both announced in January.
“LondonMetric [...] is trying to build scale so it can make the most of the period we are going through by buying cheap assets,” Moore added, “property is increasingly a scale business - the larger players will likely be the winners of the next few years”.
“The LondonMetric-LXi deal puts pressure on the entire sector - two mergers have followed and more could be on the way. It is the start of something, and we should soon see more activity in the sector.”
9.30am: Here's a recap of some of today's headlines
The FTSE 100 opened slightly higher before slipping later on ahead of a week dominated by UK inflation figures on Wednesday and GDP on Thursday.
Among companies, it was Body Shop in the headlines on weekend rumours the cosmetics retailer was getting ready to call in the administrators following tough Christmas trading.
Cash struggles elsewhere have reportedly seen Virgin Media O2 reignite discussions with TalkTalk meanwhile, over a deal which could see it buy the latter’s consumer division.
Among listed companies, GSK shares slipped despite news the pharma firm had been granted US fast-track status for its chronic hepatitis B treatment.
And finally, shares in Frasers climbed early on after the Sports Direct owner signalled a new £80 million buyback would kick off on Monday and that it had upped its stake in online retailer N Brown.
9.00am: FTSE 100 flat but Entain boosted as Super Bowl delivers
FTSE 100 was off to a low-key start to a week that will be dominated by macro news with updates due on inflation plus economic growth numbers for the UK.
Andrew Bailey, Bank of England Governor, kicks off the economic week with a speech this evening but the pace really picks up from tomorrow with US prices.
London’s blue-chip index added 2 points in the first hour to 7,575, with it proving a struggle to move on from an almost flat start.
AstraZeneca again proved a drag with the UK’s second-largest company under pressure for a second day after a poor reaction to the pharma group’s results last week.
Shares were down 2% to 9,552p even with brokers doing their best to highlight the positives.
Rolls-Royce was another faller, down 1.8% to 312.3p, presumably after Donald Trump’s latest rant about NATO over the weekend where he invited Russia to invade allies that didn’t pay enough for their defence.
Ocado and Burberry topped the risers adding 5% to 541p and 4% to 1,318p respectively with a good showing also from Entain, up 2.2% to 1,033p, after yesterday’s Super Bowl once again delivered a showstopper.
The Chief’s won in overtime with pop icon Taylor Swift no doubt delighted as her boy Travis Kelce 'done good'.
Entain’s joint venture BetMGM should have also done nicely out of its deal to be X/Twitter’s live odds partner for the event.
Away from Super Bowl excitement, London has another property deal with Tritax Bix Box and UK Commercial Property to merge and create a business with a portfolio worth £6.3bn.
8.33am: Virgin Media eyeing TalkTalk consumer - report
Virgin Media O2 (VMO2) has reignited discussions for a potential acquisition of TalkTalk's consumer division, according to a Telegraph report.
The move marks a renewed interest after a previously contemplated £3bn deal, including debt, was shelved two years ago due to market and regulatory uncertainties,
TalkTalk is considering divesting its consumer segment as part of a broader restructuring to manage a pressing need to refinance its debts.
TalkTalk consumer division has around 2.4 million residential users, recently expanded by the acquisition of half a million Shell customers from Octopus Energy.
This potential acquisition by VMO2 aims to bolster its retail customer base and enhance its footprint in the market's value segment.
Footsie is now up five at 7,578.
8.20am: FTSE 100 edges higher in opening shots
FTSE 100 ‘s dial was barely moving in early trades with the index just 2 points higher at 7,575 on a quiet day for news so far.
Tritax Big Box did confirm it has made an offer for fellow REIT UK Commercial Property as consolidation among the listed commercial sector continues.
The all share offer values UKCM at £924 million and would see UKCM shareholders ending up with 23% of the enlarged company.
Priced at 71.1p, the offer is a modest 10.8% premium to Friday’s close and looks like the latest in a string of ‘bigger is better’ thoughts among property groups.
Custodian and Abrdn Property Incomes announced a merger in January to give them a combined portfolio of £1 billion.
A merged Tritax and UKCM would be much larger and have around £6.3bn worth of industrial warehouse assets on their books.
Shares in Tritax eased 0.4% lower to 159.6p while UKCM rose 3% to 66.2p.
8.07am: Water companies to face fines for poor performance
Water companies are facing fines of up to a tenth of their turnover under new proposals from regulator Ofwat to halt the scourge of sewage dumping.
David Black, Ofwat chief executive, said: “From today we are putting water companies on notice to improve customer service and where we see failure, Ofwat can and will take action which could result in significant fines.”
A new survey from the Consumer Council for Water (CCW) found that Southern Water received the most complaints while overall more than 230,000 complaints were made to water companies in England and Wales by households from 2022 to 2023.
Trading updates are due this week from Severn Trent and United Utilities.
FTSE 100 is now being tipped to open just four points.higher.
7.49am Body Shop demise to weigh on retail sector
More on the demise of the Body Shop with reports that administrators will be called into today after disappointing trading over the Christmas period.
Set up in 1976 by the late Anita Roddick, a restructuring is expected to follow the administration process with job losses and many store closures.
Based in London, the business was acquired by private equity firm Aurelius just a few weeks ago, its third owner since being sold by Roddick in 2006.
The toiletries, soaps and perfumes group has around 200 shops currently but has struggled to compete with new entrants into the market such as Lush.
Elsewhere, spread bet firms are still calling FTSE 100 around 20 points higher.
7.11am FTSE 100 tipped for bright start as inflation overshadows the week
Markets in London are forecast to open higher at the start of a week that will be dominated by inflation and GDP numbers.
Financial spread bet firms were calling FTSE 100 up by around twenty points an hour ahead of the open, in spite of mixed trading overnight in Asia.
NatWest, inflation and water groups the headline grabbers this week
Here, news that Body Shop is set to call in administrators might put a dampener on the retail sector while reports at the weekend suggested water company bosses face bonus caps if sewage dumping continues.
On Friday, Footsie closed down 23 points at 7.573.