- FTSE 100 up 21 points at 7,733.
- AstraZeneca, Rolls-Royce gain.
- Germany said to already be in recession.
3.57pm: Germany likely in recession - Bundesbank
Germany is likely in recession as external demand remains weak and high borrowing costs weigh on consumers and domestic investors.
“There is still no recovery for the German economy," the Bundesbank said in a monthly report on Monday, “output could decline again slightly in the first quarter of 2024”.
Such a contraction in gross domestic product (GDP) would mark a fourth stagnant quarter in a row for Europe’s largest economy, with data on Friday set to confirm a 0.3% quarterly decline over the final three months of last year.
More importantly, though, it would mark a second consecutive quarter of negative growth, as pointed out by the Bundesbank.
“While this would mean the ongoing period of weakness in the German economy following the start of the Russian war of aggression against Ukraine would continue, there is still no evidence of a recession in the sense of a persistent, broad-based and distinct drop in economic activity, nor is such a recession currently on the cards,” the bank reassured.
“In particular, the income situation and thus household consumption are likely to continue to improve in the future given the stable labour market, sharply rising wages and the declining inflation rate.”
Strike action, cautious consumer spending, high interest and even uncertainty over climate and transformation policies were cited by the bank as reasons for the latest contraction.
3.30pm: YouGov chief departs in key election year
YouGov has announced the immediate departure of chief business officer Sundip Chahal as the research and analytics firm prepares for a busy year of elections around the world.
Chahal and YouGov “mutually agreed” to his departure, which is due to personal reasons, the company said.
The news comes as around 40 elections are due to take place globally this year, with YouGov, which is used by businesses and governments, playing an important role in measuring public sentiment.
“Sundip played a central role in leading and managing the team and has overseen the growth at YouGov over the years,” non-executive chair Stephan Shakespeare commented.
“In recent months, he has played an important part in progressing the acquisition of GfK's Consumer Panel Services, and I am pleased to share that the integration is advancing well following completion of the acquisition in January.”
Shares fell 1% to 1,217.50.
2.43pm: London houses shed £27,000 in value last year
House prices in the capital were disproportionately affected last year as the market recoiled on the back of a leap in mortgage rates.
According to Land Registry figures, the average house price in London fell 5.2% over the year, from £535,711 to £508,037.
This marks a £27,674 reduction, with prices dropping in 26 of London’s 33 boroughs, as per data from agency Benham.
In comparison, prices across the rest of the UK receded by 1% over 2023 as the market grappled with high interest rates, with data on Tuesday revealing a return to growth this February.
2.25pm: Barclays gains on buyback reports
Barclays PLC (LSE:BARC) racked up gains on Monday afternoon as speculation built over the prospect of future share buybacks.
According to reports, Barclays could unveil plans to hand out £9 billion over the next three years in full-year results on Tuesday.
That said, hopes for the rest of the results do not appear to be high, with analysts anticipating Barclays to lay particular focus on cost reduction, including through job cuts.
Barclays to unveil hefty cash payout alongside restructuring, say reports
Shares in Barclays climbed 1.8% to 149.38p.
Rolls-Royce emerged as the FTSE 100’s biggest riser by the afternoon ahead of its own results on Thursday, with shares climbing 3% to 333.10p as investors await what are expected to be bumper earnings.
AstraZeneca maintained gains of 2.9% to reach 10,388p meanwhile, after the pharma giant announced FDA approval for its Tagrisso drug with chemotherapy, alongside an accepted application for Dato-DXd.
The index added 13 points to hit 7,725 in the meantime.
1.35pm: Here are some of the big risers on London's junior market
Shares in SpaceandPeople PLC (AIM:SAL) were jostled up 50% to 87.9p on Monday after the promotions group said revenue last year was slightly better than expected.
It hailed a strong performance in the second half of 2023, particularly from its Brand Experience arm, the launch of its 'Rock Up and Pop Up' retail kiosk service and the further recovery of its German retail business.
PetardsGroup PLC jumped 29% as subsidiary QRO picked up an order worth £350,000 for in-car number plate recognition technology (ANPR) from what it said is one of the UK’s largest police forces.
The order is for QRO's Q-Box Merlin IP which allows the monitoring of two lanes of ANPR and manages onward transmission of data to the police force back-office systems.
And Finally, Wildcat Petroleum (LSE:WCAT) gained over 20% after announcing it had passed a due diligence test in relation to a proposed oil production acquisition in Sudan.
Sudan’s Ministry of Petroleum (MOP) probed Wildcat’s ability to complete the prospective multi-billion dollar purchase, a press release said, with approval needed before any deal could go ahead.
1.22pm: In case you missed it… easyJet founder calls for secondary listing
easyJet PLC’s founder has argued the budget airline should be exploring a secondary listing in the US in a bid to close its valuation gap to rival Ryanair Holdings PLC (LSE:RYA).
Stelios Haji-Ioannou, who set up easyJet in 1994, argued to the Mail on Sunday that a listing on the Nasdaq exchange would make sense for the airline.
He said: “Why would you object to a secondary listing on Nasdaq?
“London hasn’t lost anything. You’re just attracting more shareholders from the States.”
Ryanair is listed in both Ireland and the US, with Michael O’Leary’s airline fetching a £19.7 billion valuation, compared to easyJet’s £4.3 billion.
“I often look at the value of Ryanair and wonder why it is higher than easyJet,” Haji-Ioannou added.
Despite still boasting a £650 million stake in easyJet, Haji-Ioannou no longer has the power to veto board decisions at the airline, meaning any moves to shake up its listing would be the management teams'.
Such a move to list in the US would come after other firms have left London in favour of overseas markets though.
This includes rival airline Tui, which voted to move last week, alongside Arm Holdings and betting firm Flutter Entertainment, due to rehouse its primary listing later this year.
12.46pm: Government further winds down NatWest stake
The Treasury has further sold off publicly-owned shares in NatWest after solid results and Paul Thwaite’s permanent appointment as chief executive prompted gains last week.
Some 1.4% of the bank’s shares were sold off on Monday, taking the taxpayer’s ownership stake from 34.96% to 33.56%.
This comes as the government prepares to launch a retail share sale of its stake in the bank later this year, acquired through a bailout of NatWest during the global financial crisis.
UBS upgraded NatWest’s share price target to 265p on Monday meanwhile, marking a prospective rise of 15% on Friday’s close, as analysts highlighted the lender’s “attractive valuation”.
“Many we spoke to on results day believe that the NatWest public offer, which appears likely in the coming months, means near-term guidance is conservative,” analysts said.
12.24pm: UK-registered ship ‘at risk of sinking’ after Red Sea attack, Houthis claim
A UK-registered cargo vessel is said to be ‘at risk of sinking’ after a missile attack by Houthi rebels, the militant group has claimed.
Having come under missile off the coast of Yemen, the ship suffered ‘catastrophic’ damage, forcing the crew to safely abandon the vessel, as per Houthi spokesperson Yahya Sare’e.
“The ship suffered catastrophic damages and came to a complete halt,” he said.
“As a result of the extensive damage the ship suffered, it is now at risk of potential sinking in the Gulf of Aden.”
The UK’s Maritime Trade Operations reported an incident in the area on Sunday, in which there was “an explosion in close proximity to the vessel”.
12.02pm: Currys bids could be 'first of many' - brokers
A bidding war had shares in Currys 35% higher on Monday morning, but according to analysts, the takeover of the electricals retailer could just be the beginning.
Highlighting “cheap valuations across the sector,” Peel Hunt brokers said in a note that “much more merger and acquisition activity” was likely this year.
Many retail market leaders trade on low or even single-digit price-to-earnings ratios, the bank explained, with an anticipated uptick in consumer spending also providing appealing prospects.
For Currys, Peel Hunt suggested the board would be unlikely to engage in any offer below 80p per share.
This follows a 62p per share offer from Waterstones owner Elliott Advisors for Currys on Friday, worth around £700 million, and subsequent confirmation from Chinese e-commerce giant JD.com that it was interested in a takeover itself.
In terms of the wider sector, Peel Hunt highlighted DFS, Halfords, Topps Tiles, Card Factory (LSE:CARD), Dr Martens and M&S as all trading on low valuations.
“With interest rates having peaked, the outlook for mergers and acquisitions [...] seems likely to pick up given the low level of sector valuations,” analysts added.
11.33am: AstraZeneca, Rolls-Royce lead risers
AstraZeneca led the way as the FTSE 100’s biggest riser on Monday morning, after providing positive updates on two of its lung cancer treatments early on.
Shares climbed 3.2% following the updates, which unveiled FDA approval for Astra’s Tagrisso drug with chemotherapy, alongside an accepted application for Dato-DXd.
Vodafone and Rolls-Royce also enjoyed a strong start to the week, with gains of 2% and 1.8% respectively.
The latter is due to offer up full-year results on Thursday, with the market anticipating profits to have more than doubled to £1.4 billion.
Burberry was among the index’s main fallers meanwhile, alongside Centrica and Ocado, with the trio losing 1.5%, 3.6% and 2.5% respectively.
Burberry had suffered at the hands of a UBS downgrade, with brokers bumping down the luxury fashion firm’s share price target on concerns over its wide exposure to physical retail outlets.
The FTSE 100 climbed 10 points to reach 7,722, meanwhile.
11.09am: BoE risking UK economy, ex-chief economist says
The Bank of England is at risk of deepening the UK’s economic woes unless policymakers opt to cut base rates soon, ex-chief economist Andy Haldane has warned.
Following confirmation last week that the UK had dipped into recession, Haldane slammed the central bank in an interview with Bloomberg on Monday.
“It’s one thing to have missed inflation on the way up, which happened,” he said, “it’s quite another to then have crushed the economy on the way down.
“That double blow to credibility is one if I were a central banker, in my old job, I would be looking to avoid.”
Bank of England monetary policy committee member Megan Greene had said last week that news of the recession did not warrant cuts just yet.
Highlighting wage and service price growth, she argued monetary policy would have to “remain restrictive for some time”.
Haldane, who served on the committee between 2014 and 2021, argued the UK was “at best” set for “anaemic growth”, with prospects worsening unless rates were cut soon.
10.44am: Gas slips on mild weather, oil continues to recede
Wholesale fuel prices continued downward on Monday morning, with mild weather and warnings over excess supply last week seeping through once again.
Natural gas slipped almost 2% to 59.13p per British thermal unit on Monday morning.
West Texas Intermediate fell 0.4% to US$78.78 per barrel meanwhile, as Brent Crude declined 0.7% to US$82.69.
These declines come as the likes of mild weather and increasing supply from the Americas see European demand satisfied.
They also follow forecasts by the International Energy Agency and Wall Street bank Goldman Sachs that supply could begin outdoing demand from next year.
This is after suppliers ramped up production in the wake of the energy crisis in Europe.
Hargreaves Lansdown’s Susannah Streeter noted that Monday’s declines came “as investors assess demand prospects going forward”.
Such considerations include the prospect of borrowing costs staying higher for longer in the US, as well as concern over the sluggish recovery of China’s economy.
9.50am: AstraZeneca: UBS sees sales boost from latest treatments
As AstraZeneca PLC (LSE:AZN) shares surged on Monday morning, UBS analysts laid out sales expectations for the pharmaceuticals giant’s latest treatments.
For Dato-DXd, which saw its application accepted by the US Food and Drug Administration on Monday, UBS anticipated peak sales of US$2.5 billion.
Tagrisso, approved by the administration for use alongside chemotherapy in lung cancer patients, was forecast to bring incremental peak sales of US$500 million, meanwhile.
AstraZeneca unveiled the application for Dato-DXd, another lung cancer treatment on Monday, alongside news of approval for Tagrisso.
“Following a significant period of underperformance of AstraZeneca stock, we assume that this news, together with positive Tagrisso data, will lead to a positive share price bounce,” UBS noted.
On Tagrisso, UBS added: “We expect rapid adoption in identified stage III patients, but note that the biggest barrier to uptake will be the need to diagnose [...] as early as possible.”
Shares in AstraZeneca climbed 3.2% to 10,416p, with the firm leading the FTSE 100’s risers.
9.16am: House prices see first rise in six months
House prices have moved upwards for the first time since July this month, offering renewed optimism for the downtrodden market.
Prices increased by 0.1% year-on-year over the start of February and added £3,091 from last month to reach an average £362,839, property website Rightmove said on Monday.
“Mortgage rates have fallen considerably from their peak and are now remaining broadly stable after the uncertainty of late 2022 and 2023,” Rightmove’s Tim Bannister commented.
“Momentum to move in 2024 is continuing to build, but prospective sellers mustn’t get carried away. Buyers now have more choice of property for sale and many are still very price-sensitive, with mortgage rates remaining elevated.”
Rightmove added that increasing numbers of both buyers and sellers were now coming to market, but that properties were still taking longer on average to sell than last year.
8.57am: The morning so far
AstraZeneca was top of the FTSE 100 movers table this morning. The pharma giant rallied nearly 4% after it emerged that its drug Tagrisso, with the addition of chemotherapy, has been approved in the US for lung cancer patients.
The approval followed a priority review by the Food and Drug Administration (FDA) based on the results from the FLAURA2 Phase III trial published in The New England Journal of Medicine.
It showed Tagrisso slowed disease progression in patients with advanced lung cancer.
High-street electronics retailer Currys surged by a third after rejecting a £700 million takeover bid from Elliot Advisers.
"The board of Currys considered the proposal, together with its financial advisors, and concluded that it significantly undervalued the company and its future prospects,” said the group.
Separately, Chinese e-commerce giant JD.com confirmed a Telegraph report on the weekend that it is also considering a takeover offer for Currys.
“In response to the recent press speculation regarding Currys, JD.com confirms that it is in the very preliminary stages of evaluating a possible transaction that may include a cash offer for the entire issued share capital of Currys,” said the group.
Moneysupermarket.com (LSE:MONY) Group plc unveiled its preliminary results for the year ended December 31, 2023, which showed total revenues increasing 11% to £432.1 million.
Growth was spearheaded by the Insurance sector, which saw a notable 28% increase in revenue as high premium inflation continued, driving high search traffic and a surge in consumers switching home and car cover providers.
On the macroeconomic calendar, a jump in house prices in Rightmove’s monthly survey offered a ray of light.
Average new seller asking prices rose by 0.9% (or £3,091) to £362,839, in line with the seasonal rise that is traditional in February, according to the property website.
Prices on average are now up by 0.1% compared to February last year, following annual falls in every month since August 2023.
8.30am: AstraZeneca seen higher following Tagrisso approval
AstraZeneca shares swung nearly 4% higher this morning after it emerged that its drug Tagrisso (osimertinib), with the addition of chemotherapy, has been approved in the US for the treatment of adult patients with locally advanced or metastatic epidermal growth factor receptor-mutated (EGFRm) non-small cell lung cancer (NSCLC).
The approval followed a priority review by the Food and Drug Administration (FDA) based on the results from the FLAURA2 Phase III trial published in The New England Journal of Medicine.
It showed Tagrisso slowed disease progression in patients with advanced lung cancer.
Dave Fredrickson, executive vice president of AstraZeneca’s Oncology Business Unit, said: "This important new treatment option can delay disease progression by nearly nine additional months, establishing a new benchmark with the longest reported progression-free survival benefit in the 1st-line advanced setting.
“This approval reinforces Tagrisso as the backbone of EGFR-mutated lung cancer treatment either as monotherapy or in combination with chemotherapy.
“This news is especially important for those with a poorer prognosis, including patients whose cancer has spread to the brain and those with L858R mutations."
Shares were swapping for 10,482p as of 8.30am.
8.20am: JD.com confirms bid for Currys
Chinese e-commerce giant JD.com has confirmed a Telegraph report on the weekend that it is considering a takeover offer of British high-street electronics retailer Currys.
“In response to the recent press speculation regarding Currys, JD.com confirms that it is in the very preliminary stages of evaluating a possible transaction that may include a cash offer for the entire issued share capital of Currys,” said JD.com.
“There can be no certainty that any offer will ultimately be made for Currys, nor as to the terms on which any offer might be made. A further announcement will be made if and when appropriate.
Under City rules, JD.com must now announce a firm intention to bid for Curry’s, or announce that it does not intend to make an offer, by 18 March.
Currys today nixed a takeover bid from Elliot Advisers’ £700 million conditional offer, stating: "The board of Currys considered the proposal, together with its financial advisors, and concluded that it significantly undervalued the company and its future prospects.”
Shares flew 32% higher to 62.16p in opening Monday exchanges.
8.10am: Hipgnosis launches High Court claim against founder
Hipgnosis Songs Fund Limited (LSE:SONG) (Hipgnosis Songs Fund Limited (LSE:SONG)) has initiated a High Court lawsuit against its founder and previous investment advisor, Merck Mercuriadis, along with his firm, Hipgnosis Songs Management.
The music royalty enterprise announced its intention to file a Part 20 claim in the High Court, aiming for comprehensive indemnification from Mercuriadis and HSM.
The goal for Hipgnosis is to shield itself against potential liabilities stemming from the alleged improprieties of Mercuriadis during his leadership tenure.
This legal action follows the fund's announcement earlier in the month about its intentions to secure an indemnity from Merck Mercuriadis and Hipgnosis Songs Management Limited, a company primarily controlled by funds managed by Blackstone.
8.05am: JD.com exploring takeover bid for Currys
Currys today nixed a takeover bid from Elliot Advisers’ £700 million conditional offer, stating: "The board of Currys considered the proposal, together with its financial advisors, and concluded that it significantly undervalued the company and its future prospects.”
Elliot can now attempt to sweeten the deal, but if reports are accurate, may be facing international competition.
The Telegraph reported on the weekend that Chinese e-commerce giant JD.com is also considering a takeover offer of the British high-street electronics retailer.
Curry’s has not commented on the Telegraph report.
7.38am: Insurance leads the way in Moneysupermarket's results
Moneysupermarket.com (LSE:MONY) Group PLC (MSM) has unveiled its preliminary results for the year ended December 31, 2023, which showed total revenues increasing 11% to £432.1 million.
Growth was spearheaded by the Insurance sector, which saw a notable 28% increase in revenue as high premium inflation continued, driving high search traffic and a surge in consumers switching home and car cover providers.
Underlying earnings were up 14% to £131.9 million, while profit after tax rose by 4% to £72.3 million.
The company's adjusted basic earnings per share (EPS) improved by 12% to 16p
"We helped customers save a record £2.7bn in 2023. The more we can help households save, the more the Group grows. We're proud that in tough times for consumers, MoneySuperMarket, MoneySavingExpert and Quidco have been able to make a real difference for so many." remarked chief executive Peter Duffy.
Looking ahead, MSM cautioned of tougher insurance comparatives and sluggish energy-switching revenues: “In the first few weeks of 2024, we have had similar trends to those seen at the end of the fourth quarter 2023 continue.
The board announced an 8.9p final dividend, making the proposed full year dividend 12.1p per share.
7.15am: FTSE 100 to open lower
FTSE 100 was being called lower ahead of the open on Monday with US markets closed for the day and a lacklustre return in Asia after the Lunar New Year.
Spread bet firms had London’s blue-chip Index down by around ten points following the big gains on Friday after NatWest's results and a big rebound in retail sales.
A jump in house prices in Rightmove’s monthly survey should help housebuilders this morning.
Average new seller asking prices rose by 0.9% (or £3,091) to £362,839, in line with the seasonal rise that is traditional in February said the property website.
Prices on average are now up by 0.1% compared to February last year, following annual falls in every month since August 2023.
Electricals retailer Currys has confirmed and rejected a takeover bid from US activist investor Elliot worth 62p per share.
The offer "significantly undervalued the company and its future prospects," said the statement and was rejected last week.
Looking forward, company news is back in focus this week after last week’s welter of macro updates.
Banking giants Lloyds, Barclays and HSBC all report with Rolls-Royce, BAE systems and Intercontinental Hotels also due.
In the US, all eyes will be on the latest update from chipmaker Nvidia, which is up almost 50% this year and has accounted for a quarter of the gains seen on the S&P 500.