Blue-chip shares today made further progress after the FTSE 100 index closed at its highest level in over three years on Friday.
Prospects at the start of this week have been boosted by China’s reopening and hopes that the US economy can avoid a hard landing.
The FTSE 100 index finished at 7700 on Friday after figures from the US jobs market showed slowing wage growth, boosting hopes that inflation is under control. Commodities-focused stocks ensured further stock market progress in London today.
That’s all folks. Tomorrow: Games Workshop interims
Monday 9 January 2023 17:01 , Simon Hunt
That concludes our liveblog coverage for today, on the day Blue-chip shares today made further progress as the FTSE 100 index pushes closer to reaching an all-time high.
The Evening Standard City Desk will be back at 7am tomorrow, where interim results from Games Workshop will shed light on the health of the retail sector in the crucial Christmas trading period.
Former McDonald’s boss fined $400k.
Monday 9 January 2023 15:56
Former McDonald’s boss Stephen Easterbrook got whacked by the Wall Street watchdog today.
The Securities & Exchange Commission says he made false and misleading statements to investors about the nature of his departure in November 2019.
He violated anti-fraud provisions by claiming his termination from McDonald’s was “without cause”. He must pay a $400,000 fine.
Gurbir Grewal of the SEC said: “When corporate officers corrupt internal processes to manage their personal reputations or line their own pockets, they breach their fundamental duties to shareholders, who are entitled to transparency and fair dealing from executives.”
McDonald’s fired Easterbooks for breaking the company’s fraternisation policy by having a relationship with an employee.
He inititally got a $105 million settlement, which the company later clawed back.
UK inflationary pressures could be easing, says BoE Chief Economist
Monday 9 January 2023 15:50
UK inflationary pressures could be easing amid a weaking labour market, the Bank of England’s chief economist said this afternoon at a speak in New York.
“We are starting to see labor market indicators turn...should economic slack emerge and unemployment rise as the latest MPC forecasts imply, that will weigh against domestic inflationary pressure and ease the threat of inflation persistence,” he said.
However, speaking on the forthcoming interest rate decisions by the Bank’s Monetary Policy Committee, Pill cautioned that “if the outlook suggests more persistent inflationary pressures, it will respond forcefully, as necessary.”
Wall Street makes gains on optimism over China reopening
Monday 9 January 2023 15:04 , Simon Hunt
Stocks made gains in the opening minutes of trading in New York as investors were buoyed by hopes for a bounce-back in the Chinese economy following a lifting of border restrictions.
The S%P 500 index rose 0.40% while the Nasdaq went up 0.88% after the opening bell. Energy stocks rose the most, up an average of 2%, followed by consumer cyclicals, which went up 1.57%.
This week, China removed restrictions for quarantine of inbound travels, in the latest step in its abandoning of its draconian zero-Covid policy, with tens of thousands of citizens travelling between mainland China and Hong Kong after the rules were eased.
New York stocks on course for further gains on hopes over inflation after pay data
Monday 9 January 2023 14:09 , Michael Hunter
Wall Street’s S&P 500 was expected to make further gains in opening trade, on deepening hopes that the US may have passed its peak inflation rate after wages data out on Friday showed a slowing rise in pay.
The broad New York share gauge was called up 20 points to 3934.23 by futures trade. after a rise over last week of almost 3%.
James Hughes, chief analyst at Scope Markets, said: “Wall Street is eyeing a slightly positive start to the week’s trade, with markets continuing to digest those better than expected payroll figures from Friday against the mounting risk of a US recession.”
Record breaking year for Rolls-Royce ahead of the 2023 launch of its all-electric Spectre model
Monday 9 January 2023 13:58 , Michael Hunter
Luxury car sales at Rolls-Royce hit a record in 2022, according to numbers out today from the British marque’s German parent, BMW.
A sharp rise in demand for bespoke cars led by the Middle East helped take sales last year past 6,000 vehicles for the first time in the global brand’s history. The 8% year-on-year rise came on the twentieth anniversary of the start of full production at Rolls-Royce’s Goodwood assembly line near Chichester, which became home to the brand after it was sold by previous owner Vickers.
Pre-orders for the first ever all-electric Rolls-Royce -- called Spectre, and pictured above -- exceeded what the company called its “ambitious expectations”. Spectre will be “the world’s first ultra-luxury electric super coupé” according to its maker. It will be delivered from the fourth quarter of this year, in “the first step toward building only fully-electric cars by the end of 2030” at Rolls.
Monday 9 January 2023 13:09 , Simon Hunt
London’s Aquis stock exchange is poised to welcome its first new member of 2023 tomorrow with the listing of crypto trading app Tap Global.
Pending shareholder approval for a reverse takeover by decentralised finance investor Quetzal today, the firm, which is regulated in Gibraltar, is set to raise £3.1 million in capital valuing it at £30 million when it joins the exchange.
Founded by 29-year-old former software developer Arsen Torosian and prepaid card business veteran Dave Carr, Tap allows users to trade digital currencies through connecting them with a number of crypto exchanges via its app, and offers its own Mastercard to pay for online shopping using Bitcoin.
Since its launch in 2018, Tap has grown to over 100,000 users and now has plans for international expansion to Australia and the USA.
FTSE 100 midday movers: Airtel Africa drops after spectrum spending
Monday 9 January 2023 12:24 , Michael Hunter
Shares in Airtel Africa were on the bottom rung of the FTSE 100 in mid-session trade after the London-listed telecoms provider announced a $317 million deal to buy spectrum space in Nigeria.
Meanwhile, Ocado once again took up top slot, as the bullish investment case over the online grocer and e-commerce tech provider continued to win out over the doubters.
Revealed: Standard City Desk’s share tips for 2023
Monday 9 January 2023 11:44 , Simon Hunt
It was a far from vintage year for the stock market with the cost of living crisis, war in Ukraine, the tech crash, and political chaos all doing their bit to undermine confidence.
Sadly the Standard’s share tips were not immune from the turmoil with only two out of eight showing a profit at the year end. On aggregate we performed badly against the top tier FTSE 100, which was boosted by the strong dollar, but respectably in line with the more UK-focused FTSE-250.
We hope for better things in 2023 with a selection of tips ranging from pawnbrokers H&T to Bisto gravy maker Premier Foods. May they ride out the ups and downs of the markets more successfully than last year’s choices. We’ll get back to you in a year’s time.
Britishvolt in talks to sell majority stake
Monday 9 January 2023 10:42 , Simon Hunt
Battery business Britishvolt is seeking to sell a majority stake in the company to keep its funding on a stable footing.
In a statement seen by Bloomberg, the firm, which secured additional financing to stave off bankruptcy last year, said it was in talks with a consortium of investors in order to help finance the construction of its Blythe batter factory.
The business is seen as a crucial element of the UK’s drive to grow its electric vehicle manufacturing capability.
Commodities strength drives top flight, Wood up 4% in FTSE 250
Monday 9 January 2023 10:08 , Graeme Evans
The FTSE 100 index kept up its 2023 progress today after China’s dismantling of Covid-era travel restrictions boosted demand for mining and energy stocks.
Anglo American, Shell and Glencore were among those 1% or more higher after crude oil and other commodity prices rallied on optimism that China’s economy will rebound faster now that mandatory quarantine requirements have been dropped.
The developments helped the FTSE 100 index to edge up another 14.42 points to 7713.91, having closed on Friday at its highest level in over three years and about 2% short of the all-time high set in May 2018.
The impressive start to 2023, with the top flight up in every session so far, followed last week’s encouraging signs that inflation has peaked in Europe.
Hopes for a soft landing for the US economy were also fuelled by labour market figures showing the addition of 223,000 jobs alongside slower wage growth. This resulted in no change to expectations for 0.25% interest rate hikes by the Federal Reserve in February and March.
Its chair Jerome Powell is due to make a speech tomorrow before attention turns to inflation figures on Thursday and the outlook of some of America’s largest banks when the fourth quarter earnings season gets underway on Friday.
All these events have the potential to derail sentiment, but in the meantime investors kept a positive stance as Glencore rose 9.7p to 536.5p and Shell added 30.5p to 2380.5p.
Other stocks doing well included Prudential, which lifted another 23p to leave the Hong Kong-based insurer at its highest level in almost a year at 1253p. The Pru was joined by London Stock Exchange, which rallied 54p to 7214p on the back of Citigroup’s “buy” recommendation and 8,800p target price.
The FTSE 250 index improved 80.66 points to 19,585.38 as shares in North Sea explorer Harbour Energy and Africa-focused Tullow OIl lifted 2% and energy-focused consultancy Wood surged 4% or 6.1p to 152.5p.
Optimism on summer bookings also meant further progress for airline stocks as easyJet added another 10.2p to 382.4p and Wizz Air improved 68p to 2431p.
Pound heads for $1.22 as new year rally gathers pace
Monday 9 January 2023 10:00 , Michael Hunter
The pound continued to power ahead at the start of the first full trading week of 2023, taking it to the brink of $1.22 for the first time since mid-December.
Sterling added a further 0.6% for the session to $1.2169, leaving it up almost 2% from the turn of the year. Expectations that the Bank of England will take interest rates to about 4.5% during 2023, from the current 3.5%. are supporting the UK currency.
At the same time, there are growing hopes that the domestic economic outlook is less bleak than feared. While the BoE expects a recession to outlast the calendar year, so far corporate updates and economic indicators have stoked hopes that it could be a shallow downturn, while wages and jobs data supports the outlook for rate hikes.
The pound’s rally also comes amid wider concern across global markets about the risk of an economic contraction in the US, which is putting pressure on the dollar after its strong run over 2022.
Pressure on the dollar intensified after data from the Institute of Supply Management on the services sector pointed to a contraction, coming in under a reading of 50, the weakest reading outside the pandemic since 2009.
But the pound was also stronger against the euro, by about 0.3%, with a unit of the shared currency costing £0.8778.
Astra lands US’s Cincor in £1.5bn deal
Monday 9 January 2023 09:47 , Simon English
ASTRAZENECA today splashed out $1.8 billion (£1.5 billion) to buy America’s Cincor in a deal that will boost its pipeline of heart and kidney drugs and drive new research in a vital area.
Amid ongoing concern in some quarters that the best of corporate Britain gets picked up by foreign investors, this deal sees the Anglo-Swedish drug giant snap up a blood pressure pioneer from the US.
Cincor is working on a phase 3 trial for baxdrosat, a new treatment that should lower blood pressure once scientists get it right – so far tests have been mixed.
Astra will pay $26 a share initially plus further payments depending on performance.
That is a huge premium to the $11.78 closing price on Friday, a sign of Astra’s keenness to land the deal.
This week a major healthcare conference sponsored by JP Morgan opens in San Francisco. Drug analysts are predicting a strong year of takeovers in the sector, given heightened interest in healthcare globally.
There has also been a fall in the value of many biotech businesses, which could encourage large companies to swoop.
Marc de Garidel, CEO CinCor, said: "We are excited about the proposed acquisition of CinCor Pharma by AstraZeneca as we believe it offers the prospect of accelerating the development timeline and expanding the breadth of benefits patients with cardiorenal diseases might obtain from baxdrostat, if approved.”
Mene Pangalos, Executive Vice President BioPharmaceuticals at AstraZeneca, said: "Acquiring CinCor supports our commitment to cardiorenal disease and further strengthens our pipeline with baxdrostat.”
Astra, headquartered in Cambridge, saw its shares down 118p to 11672p, leaving the business valued at towards £178 billion.
This deal could allow a combination of baxdrosat with Astra’s Farxiga drug.
Astra says there is a “high unmet medical need” for drugs that aldosterone.
Pangalos added: “Excess levels of aldosterone are associated with hypertension and several cardiorenal diseases, including chronic kidney disease and coronary artery disease and being able to effectively reduce this would offer a much-needed treatment option for these patients."
The company was a huge player in developing Covid vaccines.
As part of the deal, Astra acquires cash and other securities on CinCor’s balance sheet worth $522 million.
Miners support further FTSE 100 progress, Harbour Energy up 3%
Monday 9 January 2023 08:37 , Graeme Evans
The FTSE 100 index has made further progress this morning after climbing another 16.8 points to 7716.27. BT Group led the way as shares in the telecoms group lifted as much as 3% or 3.65p to 130p, their highest level since late October.
Optimism over the demand outlook in China meant shares in miners including Anglo American, Glencore and Antofagasta rose 2%.
Shell and BP shares were more than 1% higher - up 26.5p to 2376.5p and 7.1p to 484.1p respectively - after the price of Brent crude lifted 2.5% to $80.61 a barrel.
Fallers included mobile phone Vodafone, which dropped another penny to 87.7p despite announcing the sale of its Hungary business for 1.7 billion euros (£1.5 billion).
In the FTSE 250 index, Harbour Energy shares rose 3% and Tullow Oil lifted 2% as London’s UK-focused benchmark rose 45.33 points to 19,550.05.
Frontier share price tanks 42% after profit warning
Monday 9 January 2023 08:14 , Simon Hunt
Shares in Frontier Developments have plunged 42% in the opening minutes of trade in London after the video games maker issued a profit warning.
In a statement the firm said: “Based on the lower than expected sales contribution from F1® Manager 2022, the general sales underperformance across the whole portfolio during the holiday period, and the uncertain contribution from Foundry in the remainder of FY23, the Board no longer expects to achieve the FY23 market consensus forecasts for revenue and IFRS operating profit.”
N Brown puts PPI legal troubles behind it in £50 million legal settlement
Monday 9 January 2023 07:59 , Michael Hunter
Online fashion retailer NBrown has settled a long-running dispute over the sale of payment protection insurance that has dogged the company behind the Jacomo and Simply Be websites.
The case relates to PPI sold to customers by NBrown subsidiary JD Williams, and payments and refunds made involving the underwriter of the insurance, Allianz. Brown said it would pay £49.5 million to settle the dispute, below the £70 million claimed by the insurer. That is more than the £25.5m set aside for the claim in the company’s accounts in August.
FTSE 100 seen higher on inflation cheer and China reopening
Monday 9 January 2023 07:40 , Graeme Evans
The FTSE 100 added 0.9% on Friday, leaving it only 2% below its all-time high after a week in which hopes were raised that inflation has peaked in Europe and the US.
Labour market statistics in the US showed the addition of 223,000 jobs but slower wage growth resulted in no change to expectations for 0.25% rate hikes at the next two meetings of the Federal Reserve.
Asia markets continued the positive trend this morning as China took steps to relax its zero-Covid policy by resuming travel with Hong Kong.
Attention now turns to speeches this week by Federal Reserve chair Jerome Powell and Bank of England governor Andrew Bailey.
And on Friday, some of the largest American banks including JP Morgan, Citi and Bank of America are due to kick off the fourth quarter earnings season.
In the meantime, CMC Markets expects the FTSE 100 index to open 25 points higher at 7724 this morning.
Vodafone to net 1.7 billion euros for sale of Hungary unit
Monday 9 January 2023 07:36 , Simon Hunt
Vofdafone is set to net 1.7 billion euros from the sale of its Hungary division after the firm today said buyers 4iG and Corvinus had completed their due diligence on the deal.
Margherita Della Valle, Vodafone Group’s interim Chief Executive said: “This combination establishes a scaled converged operator across mobile and fixed communications and supports the Hungarian government’s goal of creating a national Information and Communications Technology champion.
“The combined entity will increase competition and accelerate investment in the ongoing digitalisation of Hungary.”
Vodafone said the deal was expected to be completed in January 2023.