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FTSE 100 Live: China reopening hopes fade, UK house prices fall

 (Evening Standard)
(Evening Standard)

China’s commitment to its zero-Covid policy means stock markets have cooled after Friday’s bounce.

As well as there being no signs of a change in Covid policy, the country’s latest disappointing trade figures have highlighted the impact of the curbs on consumption and business activity.

In the UK, figures from mortgage lender Halifax point to a further cooling in the house market after the average price fell 0.4% in October.

FTSE 100 Live Monday

  • Average house price at five-month low

  • Ryanair upbeat after record half-year profit

  • China weakness slows FTSE 100 momentum

That’s all folks. Tomorrow: ABF and Aveva results.

Monday 7 November 2022 17:30 , Simon Hunt

That’s it from the Evening Standard’s City desk for today, on the day on which world leaders gathered in Egypt to mark the beginning of the COP 27 conference.

Average house prices fell at the fastest monthly rate for more than 18 months in October as the chaotic fallout from the mini-Budget shook the property market.

The team will be back at 7am tomorrow, where we’ll be covering final results from the world’s second largest sugar producer, Associated British Foods, as well as interim results from £9.5 billion market cap IT company Aveva.

FTSE 100 closes down 32 points: Evening wrap

Monday 7 November 2022 16:46 , Simon Hunt

The FTSE 100 closed down 32points to 7,303 at the end of today’s trading session.

Retail stocks made the biggest gains. Grocery warehouse technology stock Ocado was today’s biggest winner, after it surged over 6% or 51.2p to 685.2p as sentiment continues to improve following its recent partnership with South Korean retailer Lotte.

Healthcare stocks fell the most, down an average of 1.5%, while utilities firms dropped 1%.

Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown

‘’As COP 27 opens with a warning that the planet is sending a distress signal, financial markets are set to stay on edge as concerns that the global economy is heading for a painful downturn prove hard to shake off.

“Worries about recession and an energy crisis, which are causing financial pain for millions of companies and consumers, risk taking the spotlight off the urgent need for global co-operation on limiting the effects of climate change. The ‘chronicle of climate chaos’ in the form of the report detailing how the last 8 years are among the warmest on record, amid the emerging pattern of catastrophic floods following disastrous droughts, will be casting a shadow on global markets at the start of the week.“

London tech firm Worldr raises £10 million to help bankers text securely over WhatsApp

Monday 7 November 2022 16:08 , Simon Hunt

A London tech company has raised almost £10 million in funding to help develop software to bolster security for messaging apps amid intense scrutiny of how bankers and City financiers use Whatsapp to handle sensitive data.

Worldr’s software helps organisations to retain data sovereignty over information shared on communication and collaboration platforms, such as Microsoft Teams, WhatsApp, Outlook and Slack and comes just weeks after the US finance regulator slapped a number of major global banks with fines totalling $1.8bn for the improper use of private messaging apps by employees.

The new funding round was led by Molten Ventures, with continued support from IQ Capital and Playfair Capital.

read more here

New York stocks tick higher as attention turns to mid-term elections and more inflation data

Monday 7 November 2022 15:13 , Michael Hunter

Wall Street’s S&P 500 ticked higher, with a cautious feel to early trade at the start of a week that includes mid-term elections and more inflation data.

The broad New York index was up 10 points at 3781.38, a rise of 0.3%.

Elections tomorrow will determine who controls Congress and later in the week the next reading of the Consumer Price Index will feed into market expectations for the next move on rates from the Federal Reserve. Hopes for smaller rises of 0.50% eased last week after the central bank hiked by 0.75% again, while strong jobs data looks to give policymakers leeway for aggressive moves against inflation.

FTSE 100 biggest movers: Ocado leads the way

Monday 7 November 2022 14:07 , Simon Hunt

Six hours into today’s trading session, here’s a look at some of the biggest moves on the FTSE 100 in London.

The biggest rise in the top flight came from grocery warehouse technology stock Ocado, which surged over 8% or 51.2p to 685.2p as sentiment continues to improve following its recent partnership with South Korean retailer Lotte.

Paypoint seals £83m takeover of Christmas savings club firm

Monday 7 November 2022 12:21 , Simon Hunt

Gift card and Christmas savings club firm Appreciate Group has been taken over by payments firm PayPoint in a deal worth around £83 million.

PayPoint — which offers bill payments at more than 28,000 retail locations across the UK — is offering cash and shares valuing Appreciate Group shares at 44p each, which is 69% higher than the closing price of 26.05% on Friday.

Appreciate group shareholders will take a stake of about 5% in PayPoint after the deal.

PayPoint wants to tap further into the consumer and corporate gift market, worth around £8 billion a year, while also boosting Appreciate Group’s Christmas savings club offering at a time when households are under severe financial pressure in the cost-of-living crisis.

Nick Wiles, chief executive of PayPoint, said: “The proposed acquisition of Appreciate Group provides a compelling opportunity to acquire a highly complementary business with well established offerings in prepayment savings and the corporate and consumer gift card and voucher sector.”

House prices dive at fastest rate for 18 months after mini-Budget

Monday 7 November 2022 11:41 , Simon Hunt

Average house prices fell at the fastest monthly rate for more than 18 months in October as the chaotic fallout from the mini-Budget shook the property market, new figures reveal today.

Britain’s biggest mortgage lender Halifax said the average price of a home in the UK fell 0.4% to a five-month low of £292,598, the biggest drop since February 2021.

The annual rate of growth eased from 9.8% to 8.3%. Property prices for first-time buyers fell more sharply, from 10.1% in September to 7.5% in October.

Kim Kinnaird, director, Halifax Mortgages, said: “While a post-pandemic slowdown was expected, there’s no doubt the housing market received a significant shock as a result of the mini-Budget which saw a sudden acceleration in mortgage rate increases.

“While it is likely that those rates have peaked for now — following the reversal of previously announced fiscal measures — it appears that recent events have encouraged those with existing mortgages to look at their options, and some would-be home-buyers to take a pause. Understandably we have also seen consumer caution grow, as industry data shows mortgage approvals and demand for borrowing declining.”

Prices in London were, once again, the slowest climbing of any region in the country on an annual basis with a 6.8% rise to a new record average of £551,320.

Flutter shares boosted by FanDuel ruling, FTSE 250 surges

Monday 7 November 2022 10:16 , Graeme Evans

A favourable court ruling today helped to boost the FTSE 100-listed shares of gambling giant Flutter Entertainment.

The Paddy Power and Betfair owner jumped 5% or 545p to 12,055p as it emerged that an arbitration hearing had indicated a current valuation of $22 billion (£19.3 billion) for Flutter’s US-based FanDuel sports betting business.

Fox Corporation initiated the proceedings in April 2021, having argued that its 10-year option to acquire an 18.6% stake in FanDuel should be at the same price that Flutter picked up a 37% holding from Fastball Holdings in December 2020.

That deal implied a valuation of $11.2 billion (£9.8 billion), but the US tribunal determined a fair market value of $20 billion (£17.5 billion) plus a 5% annual carrying value adjustment.

London-listed gaming company Entain, which operates BetMGM as a US joint-venture with MGM Resorts, also cheered 33p to 1317p but the wider market failed to move forward as the FTSE 100 drifted 6.37 points to 7328.47.

China’s insistence at the weekend that it will stick to its zero-Covid policy meant there was no repeat of Friday’s strong session, when the top flight rallied on rumours over a move to ease restrictions.

Figures showing the first contraction in both China’s exports and imports since May 2020 did little for the mood as Asia-focused stocks HSBC and Prudential fell by around 1%.

The biggest rise in the top flight came from grocery warehouse technology stock Ocado, which surged 8% or 51.2p to 685.2p as sentiment continues to improve following its recent partnership with South Korean retailer Lotte.

A stronger pound helped the FTSE 250 index to climb 1% or 186.47 points to 18,528.04, with cyber security firm Darktrace among the beneficiaries after a gain of 12.1p to 361p.

Aston Martin Lagonda led the second tier, rallying 11% or 12.3p to 124.5p as the luxury car firm recovers the losses seen after last week’s third quarter trading update.

Apple slashes iPhone production amid slump in consumer demand

Monday 7 November 2022 09:11 , Simon Hunt

Apple has slashed its target for iPhone production amid a slump in consumer demand and prolonged supply chain woes in China.

The California-based tech giant aims to make 87 million handsets this year, down from its previous target of 90 million, according to Bloomberg, after cancelling plans to ramp up production when hopes for a surge in sales faded.

It comes as the firm faced having to cut iPhone output in November by as much as 30% after manufacturing facilities at Zhengzhou, China were put under further stringent Covid restrictions.

An Apple spokesperson said: "We continue to see strong demand for iPhone 14 Pro and iPhone 14 Pro Max models. However, we now expect lower iPhone 14 Pro and iPhone 14 Pro Max shipments than we previously anticipated.”

FTSE 100 falls on China frustration, Aston Martin recovers

Monday 7 November 2022 08:50 , Graeme Evans

China’s insistence that it will stick to its zero-Covid policy means the FTSE 100 index is 14.74 points lower at 7320.10.

Top flight fallers included Prudential, which eased 10.4p to 903.2p. Housebuilders Taylor Wimpey and Persimmon are also more than 1% lower after the latest Halifax house price release showed a 0.4% drop in October’s headline figure.

Other widely-held stocks on the fallers board included GSK, which dipped 39.2p to 1406.4p, and HSBC after retreating 3.5p to 486.5p.

Gaming firm Flutter Entertainment rose 425p to 11,935p after an US arbitration hearing placed a current valuation of $22 billion (£19.3 billion) on its FanDuel business should media giant Fox wish to take up an option to buy an 18.6% stake.

The FTSE 250 index rose 31.37 points to 18,372.94, with Aston Martin Lagonda up 6% or 7p to 118.95p as it recovered more of the losses seen after last week’s trading update.

Ryanair soars back to health with record half-year profits

Monday 7 November 2022 08:11 , Rhiannon Curry

Ryanair has posted its largest ever after-tax profit for the first half of its financial year after a recovery in traffic and profitability.

The airline said it had made €1.37 billion in profits in the six months to the end of September, well ahead of its previous first-half record of €1.29 billion in the same period in 2017.

“Concerns about the impact of recession and rising consumer price inflation on Ryanair’s business model have been greatly exaggerated in recent months,” boss Michael O’Leary said in a statement.

“We expect these strong fundamentals will continue to underpin robust traffic and average fare growth for the next 18-months at least.”

Average house price at five-month low

Monday 7 November 2022 07:47 , Graeme Evans

Average house prices fell 0.4% in October, the third decrease in the past four months and the biggest recorded by mortgage lender Halifax since February 2021.

It takes the typical property price to a five-month low of £292,598, while the pace of annual growth also continued to ease to 8.3% from 9.8% in September.

The slowdown follows the government’s mini-budget at the end of September, which caused a sudden acceleration in mortgage rates.

Halifax Mortgages director Kim Kinnaird said: “The rising cost of living coupled with already stretched mortgage affordability is expected to continue to weigh on activity levels.

“With tax rises and spending cuts expected in the Autumn Statement, economic headwinds point to a much slower period for house prices.”

China trade figures disappoint, FTSE 100 seen lower

Monday 7 November 2022 07:35 , Graeme Evans

China’s exports and imports have contracted simultaneously for the first time since May 2020, reflecting the impact of the country’s zero-Covid policy and falling demand for Chinese goods as the global economy slows.

Exports declined 0.3% in October, well below forecasts for growth of 4.3%, and imports dipped by 0.7% following growth of 0.3% the previous month.

The figures came as the Chinese government reiterated at the weekend that it would stick to its ‘zero Covid’ strategy, dashing Friday’s stock market speculation that it is preparing to relax restrictions.

The impact of these curbs is being felt by Apple as it warned of longer wait times for its iPhone 14 models due to disruption at an assembly plant in Zhengzhou.

As well as developments in China, the market will this week be looking for any further signs that headline inflation in the United States is continuing to slip back.

The FTSE 100 index rallied by 2% on Friday, but CMC Markets expects the top flight to open 18 points lower at 7316. Sterling is just above $1.13 this morning.

Joules blames good weather on bad sales

Monday 7 November 2022 07:27 , Simon Hunt

Luxury British designer Joules has blamed better-than-expected autumn weather on its downturn in sales.

The brand, which is a firm favourite of Prince William and the Princess of Wales, said trading had fallen behind expectations in recent weeks amid a downturn in consumer confidence.

Joules said in a statement: “Whilst dresses, menswear and more formal product categories have performed well, larger core categories such as outerwear, wellies and knitwear have been impacted, in part, by the milder than expected weather.”