The FTSE 100 index has continued its progress amid contrasting starts to the year for stock markets in New York and London.
The blue-chip index rose 1.4% yesterday, whereas US markets finished lower after a 12% slide for Tesla shares and a 4% drop for iPhone maker Apple that left its valuation below $2 trillion.
With Asia markets mostly higher this morning, London’s top flight has consolidated the big gains seen on Tuesday.
FTSE 100 Live Wednesday
London shares continue robust start to 2023
Food prices up by record 13.3% - BRC
BT makes £5 million drone investment
That’s all folks. Tomorrow: Next, Greggs and B&M
Wednesday 4 January 2023 18:34 , Simon Hunt
That concludes our liveblog coverage for today.
The Evening Standard City desk will be back from 7am tomorrow where trading updates from Next, Greggs and B&M will shed light on the performance of the retail and hospitality sectors during the crucial Christmas trading period.
Sainsbury’s shares rise 4.6% after it announced record pay rise for staff
Wednesday 4 January 2023 18:00 , Simon Hunt
Shares in J Sainsbury closed up 4.6% at the end of today’s trading session after the firm unveiled its biggest ever pay rise for employees as part of a £200 million investment as supermarkets battle to retain staff amid labour shortages blighting the retail and hospitality sectors.
The firm is set to boost minimum pay by 10% against last year to £11 per hour across the UK, while staff in London will see their hourly wages rise to £11.95.
The increase in pay has added further pressure to supermarket rivals Asda, who have yet to announce a pay rise for staff facing cost-of-living pressures.
Funeral firm Dignity set to become private company in £263 million deal
Wednesday 4 January 2023 17:34 , Simon Hunt
Funeral service firm Dignity has said it will recommend an offer by an investment firm set up by Direct Line founder Sir Peter Wood to take the company private in a deal which values it at £263 million.
In an after-market statement Dignity’s board of directors said it was minded to accept the offer by Valderrama Limited, a joint venture between Wooc’s SPWOne and Castelnau Group Limited.
The offer price of 525p per share represents a 20.6% premium on today’s closing share price of 435p.
Sir Peter Wood said: “Dignity has long-term growth potential – the signs are clear to me. But the changes and significant development work and investment needed to enable this growth mean the best way forward for Dignity is as a private company”.
FTSE 100 closes up 31 points: Evening wrap
Wednesday 4 January 2023 17:16 , Simon Hunt
The FTSE 100 closed up 31 points to 7,585 in the final minutes of trading in London, marking its second consecutive day of gains.
Ocado took the top slot for the second consecutive session with its shares up just over 9%, as the volatile run for the e-commerce tech company and online grocer over 2023 leaves it on course for two consecutive sessions of gains.
As wholesale gas prices continue to fall amid unusually warm winter weather, energy stocks BP and Shell suffered some of the biggest share price falls today, down 3.6% and 3.5% respectively, with mining and resource stocks falling too.
Gas prices cool further as warm winter weather points to lower bills
Wednesday 4 January 2023 16:00 , Michael Hunter
Wholesale gas prices fell faster in afternoon trade as the unseasonably warm winter meant consumers in London and the UK could keep the heating off.
It added to hopes that hard-pressed households can keep bills under control, and also kept the lid on costs of the government’s Energy Price Guarantee, which limits the cost of an average annual household energy bill to £4,279 from this month, up from £2,500 for last year.
Before the government drew up the scheme last year, wholesale gas prices peaked at over 875p per therm, a unit of energy equivalent to 100 cubic feet of gas, which generally should be enough to run a typical central heating system for around an hour. Today, the price tumbled by almost 7% to just under 160p.
European gas markets were upended by Russia’s invasion of Ukraine, and the highest prices reached last summer amid fears about supply shortfalls into the autumn and winter. Since then, European countries have improved their gas storage capacities and sourced alternative supplies, including from Qatar.
Salesforce shares climb 4% after firm announces redundancies
Wednesday 4 January 2023 14:46 , Simon Hunt
Shares in software company Salesforce climbed 4% today after the company announced it would be making a wave of redundancies as part of efforts to cut costs.
The firm said it would be firing around 10% of staff and closing a number of offices amid a restructuring as chief executive Marc Benioff said the company had hired too many people.
In a letter to staff he wrote: “The environment remains challenging and our customers are taking a more measured approach to their purchasing decisions. With this in mind, we’ve made the very difficult decision to reduce our workforce by about 10 percent, mostly over the coming weeks.
“I’ve been thinking a lot about how we came to this moment. As our revenue accelerated through the pandemic, we hired too many people leading into this economic downturn we’re now facing, and I take responsibility for that.”
Wall Street stocks rise as Fed rate hike minutes loom
Wednesday 4 January 2023 14:37 , Michael Hunter
The S&P 500’s bright start to the new year continued in opening trade, with investors on watch for fresh insight into the outlook for US interest rate rises in 2023.
Minutes from the Federal Reserve’s December monetary policy meeting -- at which it cut the size of its rate rises to 0.50% from 0.75% -- are due at 7.00 p.m. London time. While the smaller rise was expected, markets were surprised by the way in which policy makers insisted that their fight against inflation would remain aggressive into the New Year.
The broad New York stock index rose over 25 points to 3,849.90, a rise of 0.7%.
Liz Truss and Kwasi Kwarteng help Crispin Odey’s fund to a record year, say City reports
Wednesday 4 January 2023 13:26 , Michael Hunter
The often controversial City hedge fund manager Crispin Odey had a good year in 2022, helped by bets in the UK government debt market according to reports circulating in dealing rooms today.
Gilts were roiled by the “mini”-Budget in September during Liz Truss and Kwasi Kwarteng’s short-lived time in Downing Street.
The Bloomberg news agency, citing documents seen by its staff, reports that Odey’s flagship fund had its best year, up 152%, helped by positions taken as the price of UK bonds slumped in the wake of the announcements, which were soon unwound by Jeremy Hunt after his appointment as Chancellor of the Exchequer.
FTSE 100 midday movers: Centrica takes a hit as gas prices fall
Wednesday 4 January 2023 12:29 , Michael Hunter
As wholesale gas prices continue to fall amid unusually warm winter weather, Centrica has hit the bottom of the FTSE 100, with mining and resource stocks making the biggest falls.
Ocado takes the mid-session top slot for the second consecutive session, as the volatile run for the e-commerce tech company and online grocer over 2023 leaves it on course for two consecutive sessions of gains.
FTSE 100 higher, Centrica shares down 4%
Wednesday 4 January 2023 10:28 , Graeme Evans
A divided FTSE 100 index maintained its 2023 progress today as gains for Asia-focused stocks Burberry and Prudential offset a big slide for London’s energy giants.
The blue-chip index consolidated an opening day jump of 1.4% by adding another 21.22 points to 7575.31, with European markets largely unaffected by overnight Wall Street weakness dominated by sharp falls for shares in Tesla and Apple.
London’s resilience came despite former Federal Reserve boss Alan Greenspan adding his voice to warnings that an American recession is likely due to tougher monetary policy.
This weaker demand outlook meant Brent crude fell further to around $80 a barrel, causing BP and Shell to drop 12.65p and 56.5p to 470.7p and 2310.5p respectively.
They were among a number of commodities-focused stocks on the FTSE 100 fallers board as Glencore dropped 4% or 24.5p to 519.5p and Anglo American weakened 43p to 3224p.
The strong run for British Gas owner Centrica came to an abrupt halt with a slide of 4% or 3.7p to 88.2p, while profit-taking also hit Rolls-Royce. It fell back 3p to 96p after rising sharply yesterday on the back of a broker’s buy recommendation.
On a brighter note, investors held their interest in stocks with upside exposure to the reopening of China’s Covid-hit economy. Luxury goods group Burberry led the way as its shares added another 3% or 72p to 2139p while Hong Kong-based insurer Prudential cheered 30.5p to 1207.5p. In October, the shares had been below 800p.
Taylor Wimpey rose 2.7p to 107.35p and Persimmon lifted 31p to 1303.5p as the pick of the housebuilders, while Ocado continued its run of sharp share price movements by surging 5% or 33.2p to 681.8p.
A stronger pound meant the FTSE 250 index rose 0.7% or 143.92 points to 19,278.26, led by ventilation products business Volution up 3% or 14p to 389.5p.
Retailers also attracted buying interest on hopes that festive trading updates will not be as bad as many investors feared in the autumn. Currys and Marks & Spencer were both 3% higher, lifting 1.75p to 58.6p and 3.8p to 130.45p respectively.
HeiQ shares slump 50% on profit warning after China sales stall
Wednesday 4 January 2023 10:01 , Michael Hunter
Shares in London-listed hygiene technology firm HeiQ tumbled by over 50% after it issued a profit warning covering its results for 2022 and said trading in the new year would also be “below market guidance”.
The Swiss-based company makes cleaning products with innovative active ingredients it calls synbiotics, which use probiotics and prebiotics to improve their performance. It also makes advanced textiles and coatings.
It cited lower sales in China due to pandemic restrictions and “all-time highs” in inventory levels at companies due to concerns around supply chains due to the impact of Covid, slowing its sales from the fourth quarter.
Shares tumbled 30p to 25.75p, down 54%.
BT doubles down on drone bets with £5 million investment
Wednesday 4 January 2023 09:58 , Simon Hunt
BT group today doubled down on its bet on the future of drone technology after investing £5 million in a technology firm behind the UK’s first “drone superhighway” network.
Founded in 2014, Reading-based Altitude Angel developed its ARROW software to manage drone traffic across an airspace shared with passenger planes in a safe manner.
Under the deal, BT Group will provide the connectivity and network infrastructure to maintain Altitude Angel’s Tower network, as well as become the key reseller for the firm’s software.
Altitude Angel said it would use the funds to expand its existing drone superhighways to include thousands of miles of Skyway infrastructure connecting towns and cities as well as transport and package delivery hubs.
The long distance drone flights industry is estimated to be worth £45bn by 2030, according to BT.
Altitude Angel CEO and founder Richard Parker said: “With BT Group’s significant communications infrastructure, we can quickly bring ARROW to the masses.
“This will provide the UK with the first nationwide drone superhighways, unlocking the potential of this new and innovative technology and revolutionising business operations in countless industries.”
Microsoft to use AI technology behind ChatGPT in its search engine, according to reports
Wednesday 4 January 2023 09:23 , Simon Hunt
Tech giant Microsoft is stepping up its battle to take search engine market share from rival Google with plans to incorporate the artificial intelligence software behind ChatGPT into Bing.
The Washington-based business plans to use the tools built by artificial intelligence research laboratory OpenAI, which created the ChatGPT service, to offer human-like answers to queries typed into its search engines rather than provide a list of websites as it does currently, and could have the functionality up and running as soon as March, according to IT news site The Information.
Founded in 2015, artificial intelligence research centre OpenAI was set up by a group of billionaire tech entrepreneurs including Elon Musk and Peter Thiel and received a $1 billion investment from Microsoft in 2019.
It took just five days for OpenAI’s ChatGPT chatbot to hit one million sign-ups after its launch last month, as users rushed to try out the human-like chat functionality offered by the service, which is able to provide complex answers to scientific questions, write poetry and provide recipes for home-cooked meals.
Bing accounted for just 9% of the global search market in 2022, according to data from Statistica – well behind Google’s 83% dominance over the same period.
FTSE 100 higher despite 3% falls for BP and Shell
Wednesday 4 January 2023 08:43 , Graeme Evans
Shares in energy giants BP and Shell have fallen 3% after the price of Brent crude eased further towards $80 a barrel.
Commodities giant Glencore also lost 2%, but the FTSE 100 index clung to positive territory with a rise of 17.87 points to 7571.95.
Burberry topped the risers board thanks to a gain of 4% or 73p to 2140p, while fellow Asia-focused stock Prudential improved 26.5p to 1203p. Taylor Wimpey rose 2.4p to 107.5p as the pick of the housebuilders, while Ocado added 12p to 660.6p.
The FTSE 250 index was 0.5% or 89.88 points higher at 19,224.22, led by Johnson Matthey and ventilation business Volution after their share rose 3%.
FTSE 100 up 8.60 points in opening trade
Wednesday 4 January 2023 08:02 , Graeme Evans
The FTSE 100 is up 8.60 points to 7562 in the opening minutes of trade. Here’s a look at the biggest opening moves.
Shares in United Utilities Group PLC climbed the most, up 1.04% to 1016p.
Shares in Taylor Wimpey PLC were up 0.91% to 105.6p.
Shares in Smurfit Kappa Group PLC were up 0.89% to 3165p.
Food prices up by record 13.3% in December
Wednesday 4 January 2023 08:00 , Graeme Evans
Cost pressures failed to ease for households in December after the British Retail Consortium (BRC) revealed a record year-on-year rise in food prices of 13.3%.
The figure, which compared with 12.4% a month earlier, was driven by a 15% jump in fresh food. A drop in inflation for non-food items to 4.4% from 4.8% meant the overall annual rate dropped to 7.3% from 7.4%.
BRC chief executive Helen Dickinson said: "2023 will be another difficult year for consumers and businesses as inflation shows no immediate signs of waning.
“Retailers will continue to work hard to support their customers and keep prices low. However, further high investment in prices may no longer be viable once the government's energy bill support scheme for business expires in April."
Ryanair traffic grew 21% in December
Wednesday 4 January 2023 07:43
Traffic at Ryanair grew 21% in December to 11.5 million passengers, data released by the airline this morning showed, as it continued its post-coronavirus bounceback.
Ryanair’s load factor, a measure of how full its planes are, grew 11% to 92%, while the total number of guests for 2022 was 160 million, more than double the figure of the previous year.
Lanzarote, Lisbon and Malaga were the three most passenger holiday destinations for customers in 2022, the airline said.
Tesla leads Wall Street sell-off, FTSE 100 seen higher
Wednesday 4 January 2023 07:36 , Graeme Evans
A warning from former Federal Reserve chair Alan Greenspan that an American recession was a likely consequence of tough monetary policy has dampened the mood for US investors and helped push Brent crude below $82 a barrel.
On Wall Street, Tesla and Apple were among the big fallers amid worries that sales will take a hit as consumer wariness rises during the downturn.
Apple shares fell 4% to reduce its market value to $2 trillion, while Tesla slumped another 12% on the back of disappointment at Monday’s fourth quarter delivery figures.
The performance was in contrast to progress for markets in Europe, where encouraging inflation data in Germany indicated prices are coming down more quickly.
London’s FTSE 100 index rose 1.4% and is expected to continue on a positive path today.
Meanwhile, the minutes of December’s Federal Reserve meeting will be closely watched tonight for clues about the peak for US rates before policymakers hit the pause button.
Hargreaves Lansdown senior markets analyst Susannah Streeter said this morning: ‘’Fresh warnings about the effect of aggressive rate hikes on the US economy are rattling traders again, with the oil price continuing its march downwards.
“The fall in the price of crude is set to weigh on energy stocks in the coming session, but provides some salve to inflationary concerns, given how higher prices at the pumps have been causing such a hit to drivers’ pockets.”