- FTSE 100 finishes 9 points lower
- WSJ reports OPEC might raise output
- Virgin Money jumps as profits leap 43%
4.45pm: FTSE finishes in the red
At the close, the FTSE 100 had retreated 0.1% to end the day in negative territory at 7,377 points.
CMC's Michael Hewson called it "a lacklustre start to the week" for European markets, after an Asia session which was dominated by concern that Chinese authorities will have to implement further lockdowns, after the country reported its first Covid related deaths since April.
"Consequently, we’ve seen sharp declines in the price of crude oil and base metals on concerns over weaker demand, which has acted as a drag on the basic resources and the energy sector. The declines in crude oil haven’t been helped by a report that Saudi Arabia might back an increase in supplies," Hewson wrote.
The likes of BP, Shell and Harbour Energy slipped to the bottom of the FTSE 100.
3.45pm: FTSE 100 heads lower weighed by falls in oil majors
Heading to the close and the FTSE 100 has lost ground, now down 18 points.
Falling oil prices have been the news this afternoon following reports that Opec + might raise output. The price was already lower on renewed concerns about the state of the Chinese economy as Covid cases jumped but the rot really set in on the reports in the Wall Street Journal.
Mixed blessings for companies, oil stocks fell back but for others a falling oil price should equal reduced energy costs prices and falling inflation.
BP PLC (LSE:BP.) is now down 3.8% and Shell PLC (LSE:SHEL, NYSE:SHEL) 3%.
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Elsewhere, Endeavour Mining PLC (LSE:EDV, TSX:EDV, OTCQX:EDVMF) remained top of the FTSE 100 risers after a significant gold discovry, Virgin Money UK PLC (LSE:VMUK) leapt after bumper profits and news of a share buy-back but mining stocks were hit by renewed worries of further lockdowns in China following a spike in cases.
2.55pm: Oil prices slides further on reports OPEC might increase output
Saudi Arabia and other OPEC oil producers are discussing an output increase, the Wall Street Journal reported on Monday, citing the group's delegates.
An increase of up to 500,000 barrels per day is now under discussion for OPEC+’s Dec. 4 meeting, the report said.
The news prompted further heavy falls in the US with Brent crude now 4.3% lower at $83.38 and US West Texas Intermediate (WTI) crude down 4..5% at $76.36 a barrel.
BP PLC (LSE:BP.) fell 2.6% and Shell PLC (LSE:SHEL, NYSE:SHEL) 1.8% dragging the FTSE 100 back into negative territory.
2.45pm: FTSE 100 in positive territory
FTSE 100 has pushed steadily higher all day since a weak opening and is now up 14 points given a further lift by a better than expected start by the Dow Jones.
US markets are mixed at the start but the DJIA has pushed higher despite expectations for an opening fall.
Just after the market opened, the Dow Jones Industrial Average had added 60 points or 0.2% at 33,806 points, while the S&P 500 was down 11 points or 0.3% at 3,954 points and the Nasdaq Composite had shed 58 points or 0.5% at 11,088 points.
The Walt Disney Company (NYSE:DIS) stock popped about 8.6% following the news Bob Iger would be returning to the company as its CEO, replacing Bob Chapek effective immediately after a slew of disappointing economic results. The company’s stock is down about 40% this year.
Forex.com market analyst Fiona Cincotta said risk sentiment had taken a hit amid rising COVID cases in China.
“The spike in cases and stricter curbs being implemented around some economic hubs such as Beijing and Shanghai is forcing pouring cold water over hopes that China could be considering a move away from its zero-COVID strategy,” Cincotta said.
1.40pm: China signs 27-year long gas deal with Qatar
Double dose of news from Qatar as England take the lead against Iran and the host nation of the World Cup announces a gas deal with China.
The deal is China's longest ever deal for the supply of liquefied natural gas (LNG), as the world's second-largest economy looks to bolster its energy security for decades.
Qatar Energy will send Sinopec 4m tons of LNG a year starting in 2026, the state-controlled companies announced in a virtual ceremony today.
The landmark $60bn (£50.8bn) agreement will last for 27 years, making it China's longest LNG supply agreement to date, according to data from BNEF. It is also one of the country's biggest in terms of volume.
12.55pm: FTSE 100 breaks into positive territory as England prepare to kick-off
FTSE 100 rangebound after recovering those early losses. Trading may be a touch subdued in the next hour or so as England’s footballers kick off their campaign for World Cup glory. The lead index is now up 5 points.
Away from football and looking ahead to one of the retail events of the year and industry research suggested Black Friday footfall is expected to be up sharply on the previous year as hard-pressed shoppers seek out bargains.
Retail consultancy Springboard is forecasting a 12.8% year-on-year improvement in footfall across all UK shopping destinations on 25 November.
Footfall is expected to be 13.2% higher on high streets, ahead 16.3% at shopping centres and up 8.5% in retail parks.
However, it remains below pre-pandemic levels, with footfall forecast to be down 7.8% on Black Friday in 2019.
Springboard said: "Shoppers will be driven to seek out the Black Friday discounts ahead of Christmas this year, over growing concerns around rising inflation rates as well as supply issues, meaning that shoppers are at a risk of not getting the gifts they want.”
12.25pm: FCA fires warning shot over gamification of trading apps
The UK’s financial watchdog has fired a warning shot at trading apps today over the so-called gamification of betting on the financial markets, amid fears unsophisticated investors are being lured in to bets against their own interest.
In a statement, the Financial Conduct Authority warned trading app operators to review design features including sending “frequent notifications with the latest market news” and providing investors with “in-app points, badges and celebratory messages”.
The warnings come after fears on both sides of the Atlantic that retail investors are being prompted into speculative bets without understanding the ramifications.
The FCA said today it had found gamification “being used in ways that may mislead consumers or lead to poor outcomes and problem behaviours.”
“Some product design features could be contributing to problematic, even gambling-like, investor behaviour,” said Sarah Pritchard Executive Director of Markets at the FCA.
12.15pm: US markets seen lower
US stocks are expected to open lower on Monday as investors consider the prospect of more interest rate rises in the world's biggest economy and the outlook for the wider economy.
Futures for the Dow Jones Industrial Average were down 0.2% in pre-market trading, while those for the S&P 500 were 0.4% lower, and contracts for the Nasdaq-100 fell 0.7%.
“The US-inflation-data boosted rally faded last week, on the back of a too-strong-to-be-happy retail sales print, and a couple of hawkish comments from Federal Reserve presidents,” noted Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
The coming week will be busy despite the Thanksgiving holiday on Thursday.
“This week, investors will focus on interest rate hikes and the US Black Friday sales,” said Ozkardeskaya.
Wednesday will be key with the Reserve Bank of New Zealand expected to raise its benchmark interest rate by another 75 basis points while the Fed reveals the minutes from its latest meeting a little bit later the same day, she added.
Further ahead, investors and retailers alike will be watching how sales on Black Friday pan out especially after a set of mixed earnings from retailers, including gloomy guidance from the likes of Target.
“The Black Friday sales will paint a clearer picture of the health of the US consumers, and their wallets in this inflationary environment. Remember, good sales are good for the mood, but too good sales would fuel inflation expectations, and the Fed hawks, and may not be good for investor appetite,” said Ozkardeskaya.
Elsewhere, shares in entertainment giant Disney rose sharply after news that ex-boss Bob Iger is returning to the firm less than a year after he retired. Its shares were up over 8% in pre-market deals.
11.45am: PM pledges economic stability, rules out "Swiss-style" post Brexit deal
Prime minister, Rishi Sunak, told the CBI’s annual conference he wants to "put stability and confidence at the heart of this Government's agenda."
He said he plans to get a grip on inflation and balance the books to "build a better country where we get inflation down and grow the economy", investing in the NHS and schools.
"Critical to achieving all this is innovation” he stated, adding "The more we innovate, the more we will grow.”
In response to a question about the CBI's calls for immigration rules to be loosened, Sunak said he wants to reform the immigration system to make it a "beacon for the best and brightest around the world."
Sunak said the highest priority must be tackling illegal immigration, which undermines trust in the system among the public.
The UK would create "one of the world's most attractive visa regimes for entrepreneurs and highly-skilled people" as he set out plans for artificial intelligence experts to come to the country, the PM commented.
“We are launching a programme to identify and attract the world's top 100 young talents on AI” he said.
"If we're going to have a system that allows businesses to access the best and brightest from around the world, we need to do more to give the British people trust and confidence that the system works and is fair.
"That means tackling illegal migration."
He also confirmed the government will not pursue a post-Brexit “Swiss-style” deal to bring the UK closer to the EU.
Sunak said he was “unequivocal on this” and that “under my leadership the United Kingdom will not pursue any relationship with Europe that relies on alignment with EU laws.”
11.13am: Forecasts for Virgin Money expected to rise after strong numbers
British lender Virgin Money UK PLC (LSE:VMUK) led the FTSE 250 risers, surging 12%, after forecast beating profits of £595m, up 43%, (consensus: £578m).
AJ Bell investment director Russ Mould said the results: “offered a reminder that higher interest rates aren’t necessarily bad news for everyone.”
“Combined with a beaten down valuation and it is no surprise shares in Virgin Money were in heavy demand today” he said.
“The better-than-expected dividend and buyback from Virgin Money are good news on their own but are also crucial for what they say about management’s confidence in the outlook for the business.”
“Virgin Money has significant exposure to the mortgage market, although looking at its loan book it seems to have done a decent job of managing its risks. So far impairments are coming in lower than expected and Virgin Money is sitting on a comfortable cash buffer, way in excess of regulatory thresholds” Mould commented.
Shore Capital’s Gary Greenwood said he expects the consensus profit forecasts to increase to around £550mln from the current £497mln primarily due to a more positive outlook for net interest income and impairments.
“While VMUK is facing into challenging market conditions, we believe the Group is well positioned to cope” Greenwood said.
“We believe an investment today is likely to provide strong rewards to investors over the medium-term” Greenwood commented, reiterating his buy rating.
10.42am: Oil price near 2-month lows
Oil prices fell to trade near two-month lows on Monday as supply fears receded while concerns over fuel demand from China and US dollar strength weighed on prices.
Brent crude futures fell below $87, sliding for the fourth straight session amid concerns that China may tighten Covid curbs after it reported its first Covid-related deaths in almost six months over the weekend.
Localized lockdowns were implemented in some areas on Monday as the world’s top crude importer continued to grapple with resurgent Covid outbreaks.
Brent crude fell 0.39%, off earlier lows, to $86.92 a barrel while US West Texas Intermediate (WTI) crude was down 0.42% at $79.73 a barrel.
Both benchmarks closed Friday at their lowest since Sept. 27, extending losses for a second week, with Brent down 9% and WTI 10% lower.
A strong rebound in the dollar was another bearish factor for the oil price.
9.55am: CBI calls for relaxtion in immigration rules
CBI director-general Tony Danker has called for immigration to “plug the gap” in the economy, to help firms fill job vacancies.
Speaking on BBC Radio 4’s Today programme, Danker argued that Conservative ministers must recognise that allowing in more workers from overseas will help the economy grow.
“When it comes to immigration, it’s quite interesting, when you look at the OBR report on Thursday, they said the only thing that’s really moved the needle on growth is by allowing in a bit more immigration.”
“The reason why it’s so important is we have literally over a million vacancies in this country, we have 600,000 people who are now long-term unwell, who aren’t coming back to the labour market any time soon.”
“That’s why we have to get this shortage occupation list - the list of people that we’re really missing that we aren’t going to get in Britain any time soon - and we have to get them to plug the gap while we re-calibrate the labour market in the medium term.”
9.25am: Endeavour Mining rises after gold discovery
Endeavour Mining PLC (LSE:EDV, TSX:EDV, OTCQX:EDVMF) led the FTSE 100 risers after hailing as one of the “most significant discoveries made in West Africa over the last decade” a major gold find in Côte d’Ivoire.
It said the Tanda-Iguela property has the potential to become another flagship asset after the company’s geologists compiled a resource estimate for the Assafou target in a super-quick 15 months.
Initial analysis suggests Assafou is host to an "indicated" 14.9mln tonnes of ore at 2.33 grams per tonne (g/t) for 1.1mln ounces. With this, there is an inferred 32.9mln tonnes at 1.80 g/t for a further 1.9mln ounces.
READ: Endeavour Mining reveals the significant potential of its Côte d’Ivoire gold discovery
9.00am: Commodity stocks lead markets lower
Shares remained lower on the concerns from China with the FTSE 100 down 25 points at 7,360.
Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown said: ‘’Financial markets have caught a cold amid worries that mounting Covid cases in China and a fresh tightening of restrictions will send a fresh shiver through manufacturing output and push down demand for raw materials.”
“Outbreaks across the country clustering in mega cities like Beijing and Guangzhou are dashing hopes of an easing of the strict zero Covid policy.”
The news pushed the oil price lower, following a 10% fall last week, and the worsening situation putting fresh pressure on commodity stocks, with mining companies feeling more pain in trading today.
Glencore PLC (LSE:GLEN) dropped 2.66%, Antofagasta plc fell 2.31%, Anglo American slipped 2.15% and Rio Tinto PLC (LSE:RIO) declined 1.88%.
In the FSE 250 Virgin Money UK PLC (LSE:VMUK) continued to lead the way, up 11.25%, after its hefty profit increase.
8.15am: FTSE 100 opens lower on renewed Covid concerns in China
FTSE 100 opened lower as renewed concerns of Covid lockdowns in China dented Asian markets.
At 8.10am the lead index was down 18 points at 7,367 while the FTSE 250 slipped 37 points to 19,246.
Virus cases have continued to rise in China leading to fears that China may reverse recent moves toward easing its zero-Covid policy of quarantines and lockdowns.
Richard Hunter, Head of Markets at interactive investor commented: “Asian investors were also in a sombre mood following further Covid-19 outbreaks which resulted in further lockdowns.”
“In turn, this has stifled hopes of an opportunity for the Chinese economy to begin a recovery.”
In London on a quiet day of corporate news Virgin Money UK PLC leapt 10% after reporting a 43% increase full-year profits driven by higher interest rates which boosted margins.
The UK lender said pre-tax profit surged to £595m and announced plans for a further £50mln share buy-back.
But catering company Compass Group PLC dipped nearly3% despite a rise in full-year underlying operating profits and revenues.
In the year to 30 September, underlying operating profit grew 87.5% to £1.59bn, on revenue of £25.8bn, up 37.5% on the previous year.
Britain’s top business leaders will hear that Hunt’s statement has failed to address the UK’s fundamental growth problem when the CBI gathers today.
Director-general Tony Danker is expected to warn that people’s lives will get worse without a push on growth.
Prime minister Rishi Sunak will also address the conference today.
7.20am: Pound weakens against the US dollar
The US dollar kicked off the week on a positive foot on the back of a retreat in dovish Fed expectations.
The pound was quoted at $1.1827 early Monday in London, down a full US cent from $1.1929 late Friday, the euro traded at $1.0278, down from $1.0362, while against the yen, the dollar was quoted at Y140.70, 139.85.
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Sterling is seen facing resistance near the $1.1960 level while the 1.2030 area remains the broader resistance, this is likely to be a huge barrier for any further gains. Support remains all the way back at the $1.1640/50 area.
Ipek Ozkardeskaya, senior analyst at Swissquote Bank suggested: “We could see some profit taking in the single currency and a downside correction toward the 1.0190 level, which is the minor 23.60% retracement on the 2021-2022 sell-off.”
This week, investors will focus on interest rate hikes and US Black Friday sales.
The Reserve Bank of New Zealand is expected to raise its rates by another 75bp on Wednesday, the Fed will reveal the minutes from its latest meeting a little bit later that day, and the US will find out how much and of what people will be buying this Black Friday.
7.00am: FTSE 100 seen lower on renewed Covid concerns
FTSE 100 expected to open slightly lower on Monday after falls on Asian markets with renewed Covid-19 worries denting the mood.
Spread betting companies are calling the lead index down by around 20 points.
Ipek Ozkardeskaya, senior analyst at Swissquote Bank said: “Stocks in Asia fell this Monday on news that China reported its first death in six months from Covid on Sunday, and two other deaths followed.”
“The news obviously spurred fear that the government could make a U-turn on its decision of easing the strict Covid zero rules, and wreak havoc in Chinese markets, yet again.”
“The Hang Seng fell more than 2% today, after a more than 26% rebound in the first two weeks of November, while the CSI index slid 1.50%.“
Back in London caterer Compass and challenger bank Virgin Money are among those to get the week going.