- FTSE 100 closes 68 points ahead
- BP, Shell and SSE all successful in Scottish wind leasing round
- US markets closed today
4.50pm: FTSE 100 closes above 7,600 points
The FTSE 100 had a good Monday, closing 0.9% higher at 7,611 points for a gain of 68 on the day.
"It’s been a quiet but positive start to the week for markets in Europe, after Asia markets largely got the week off to a positive start, after the People’s Bank of China unexpectedly eased monetary policy," Michael Hewson, chief market analyst at CMC Markets UK wrote in a note.
"The FTSE100 has had another good day, moving above the 7,600 level, to another post lockdown high, helped largely by M&A activity with the weekend news of Unilever’s bid for GlaxoSmithKline’s consumer goods business, reinforcing the truth that a lot of companies on the UK’s benchmark index are seriously undervalued. GlaxoSmithKline and Unilever have topped and tailed the FTSE100 after it was confirmed that Unilever had tabled a £50bn bid for Glaxo’s consumer health care business, which Glaxo has a stake in, along with Pfizer who hold the remaining 32%."
3.45pm: FTSE 100 above 7,600 as weak sterling provides tailwind
The Crown Estate Scotland has announced the outcome of ScotWind Leasing, the first Scottish offshore wind leasing round in more than a decade.
In all, 17 projects were selected from 74 applications, with the applicants paying just under £700mln in option fees.
BP Alternative Energy Investments (£85.9mln), SSE Renewables (ditto) and Shell new Energies (£86mln) were the three biggest payers.
The FTSE 100 was up 67 points (0.9%) at 7,609.
2.30pm: Back above 7,600
The FTSE 100 has risen above 7,600 and this time looks like it might make it stick.
Helped by a weak pound – sterling is off by more than a quarter of a cent against the US dollar – the FTSE 100 is up 64 points (0.9%) at 7,607.
A weak pound is generally reckoned to be a good thing for the Footsie, which is chock-full of companies that have a lot of overseas earnings. Conversely, the FTSE 250, which tends to have companies that import from overseas and sell locally, is not a fan of a weak exchange rate but nevertheless the mid-cap index is up 107 points (0.5%) at 22,850, possibly on the basis that Boris Johnson is going to do away with all lockdown restrictions to make it impossible for him and his staff to be chastised for ignoring them.
Cineworld Group PLC (LSE:CINE), up 5.7% at 42.66p, is the top performer, adding to Friday’s gains that were sparked by a positive trading update.
Never mind Rin Tin Tin being the “dog that saved Warner Bros”, Spider-Man may be the superhero that saved Cineworld after it becoming the first film to gross more than US1.5bn at the box office since the onset of the COVID-19 pandemic.
Capital & Counties (LSE:CAPC) Properties PLC advanced 3% to 179.7p after it said Covent Garden, which it owns a large chunk of, had a strong second half of 2021.
An independent property valuation of its Covent Garden portfolio was £1.7bn, representing a like-for-like increase of 4.6% in the second half of the year and an overall decline of 0.6% over the full year.
“CapCo's trading update for the last quarter of 2021 is more positive than we had expected, with the portfolio valuation increasing by 4.6% over the period. The shares are trading at a c.20% discount to NTA [net tangible assets], and should respond positively to today's announcement, rising closer to our target price of 185p,” said City firm, Stifel.
12.30pm: US markets closed today
Around about this time of day we normally feature a preview of US markets but today US citizens are enjoying a rare day off.
Back in Blighty, the FTSE 100 is back on the rise after taking a pause for breath in the second half of the morning session.
The index is up 54 points (0.7%) at 7.597.
The Centre for Economics and Business Research (CEBR) said its consumer confidence index fell by 0.5 points to 110.0 in December.
The survey of 6,000 was conducted by market research group, Yougov.
"Both the backward- and forward-looking business activity and job security metrics fell and, crucially, the household finance measures are notably below where they were this time last year," said Darren Yaxley, YouGov's head of reputation research.
11.0am: Backsliding
Are we there yet?
If you are talking about the FTSE 100 breaking above the 7,600 barrier, it did manage it briefly but is now down to 7,584, up 41 points on the day.
“The FTSE 100 made a strong start on Monday morning amid some blockbuster M&A news and as China cut interest rates in the face of slowing growth,” said Russ Mould at AJ Bell.
China’s gross domestic product (GDP) grew 8.1% in 2021, the fastest rate since 2011. That being said, fourth quarter GDP grew at just 4%, ahead of expectations but nevertheless the slowest growth rate in 18 months.
The Chinese economy's GDP in 2021 is $18 trillion at the current exchange rate converted to dollars, and GDP per capita is $12,500, finally surpassing the world average. My prediction is that nominal GDP will surpass the US in 2025.
— THE REAL CHINA (@zelongxp) January 17, 2022
The People’s Bank of China cut its key interest rate by one-tenth of a percentage point in an attempt to ginger up economic growth.
“The Chinese GDP figures were no worse than expected; however, the central bank’s decision to ease rates reflects concern about a property market slowdown and the impact of tighter restrictions brought in to limit the spread of the Omicron variant of Covid-19,” Mould added.
Evraz PLC (LSE:EVR), the steel company, is one of those that would appreciate a bit more growth in the Chinese economy; its shares were down 0.5% at 577.2p.
9.55am: Knocking on the door of 7,600
The FTSE 100 is knocking on the door of 7,600 and hitting heights not seen since January 2020
London’s index of heavyweight shares was up 56 points (0.7%) at 7,599, with GlaxoSmithKline PLC (LSE:GSK), up 4.7% at 1,718.8p, leading the charge with traders expecting Unilever PLC (LSE:ULVR) to return with a bigger bid for the drugs giant’s consumer healthcare division after the Anglo-Dutch company’s £50bn offer was rebuffed.
Taylor Wimpey PLC (LSE:TW.), 2.7% firmer at 158.15p, is also going well after a well-received trading statement.
The housebuilder said it expects results for 2021 will be in line with expectations. “We continue to see strong demand for our homes,” the housebuilder added.
8.50am: Better than expected start
The FTSE 100 got off to a better-than-expected start as it continued to benefit from rotation out of tech and into value stocks.
Traders resisted the urge to hit the panic button after China posted what could be best described as lacklustre retail sales and industrial output numbers.
Back here in the UK, the day’s big riser, up 5.2%, was GlaxoSmithKline, which received a £50bn bid approach from Unilever for the consumer business it jointly owns with American giant Pfizer.
Unilever fell 6% as investors braced for the stakes to be raised further after three indicative offers were rebuffed.
6.50 am: FTSE 100 set to make modest headway
The FTSE 100 looks set to make modest headway in the opening session of the new trading week following a broadly positive start in Asia.
China’s latest economic data portrayed a mixed picture that, ultimately, led to a cut to bank lending rates.
Japan, meanwhile, is reported to be ready to raise its forecasts for growth and inflation before ‘telegraphing’ its stance on interest rates.
“The story goes on to say that they’re talking about ‘well into 2023’, so nothing immediate,” said markets analyst Marshall Gittler of BDSwiss.
“But it also quotes a BoJ source as saying, ‘The BOJ needs to pay close attention to what other central banks are doing’, which is normalising policy all around.”
On the oil markets, Brent crude hit a three-year high of almost US$84 a barrel.
Looking ahead to what’s expected this week, the corporate diary is packed.
Scheduled are updates from Entain, Primark and BHP here in the UK, while Stateside we have quarterlies from Netflix and Goldman Sachs (NYSE:GS).
Around the markets
- Pound US$1.3676 (flat)
- Bitcoin US$42,853.80 (-0.57%)
- Gold US$1,818.60 (+0.21%)
- Brent crude US$86.37 (+0.37%)
6.50am: Early Markets - Asia / Australia
Asia-Pacific markets were mixed on Monday as China’s economy grew by 8.1% in 2021, with a steady rise in industrial production offsetting slower growth in retail sales.
Meanwhile, Chinese firms are preparing for another round of supply chain disruptions as the country imposes sweeping lockdowns to keep the omicron variant at bay.
The Nikkei in Japan rose 0.74% on Monday while South Korea’s Kospi fell 1.09%.
China’s Shanghai Composite gained 0.63% but Hong Kong’s Hang Seng index fell 0.64%.
Australia’s S&P/ASX200 rose 0.32% to close at 7417.3 points, with the consumer discretionary sector outperforming all others with a 2.2% advance.