Stock market sentiment continues to be driven by recession fears after investors endured one of their worst weeks since the start of the pandemic.
There was little change in the mood today amid attention on whether the US Federal Reserve will deliver a back-to-back 75 basis points rise in interest rates in July.
Brent crude is now at $112 a barrel after falling 6% on Friday due to weaker demand fears, while pressure on cryptocurrencies has continued after bitcoin fell below $20,000 over the weekend.
Easyjet to cancel thousands of flights
11:42 , Simon English
EASYJET faces a £200 million hit after it today unveiled plans to cancel thousands of flights this summer as Britain’s travel chaos woes got deeper.
The budget airline today apologised for its part in the crisis that has seen holidays blighted, but also set out plans to cancel thousands more flights.
With the aviation sector already in turmoil, the budget airline admitted it was unable to cope with an “unprecedented ramp up” in demand for flights. Gatwick and Amsterdam, its top biggest airports, will be the worst hit by the cancellations.
Analysts at Bernstein think the lost flights will cost easyJet between £100 million and £200 million this year, though the company declined to give an estimate.
If the analysts are right that means trouble for investors as well as customers.
The shares fell 10p to 426p today – they are down 48% this year.
Primark make its forst foray into online retailing
11:31 , Jonathan Prynn
INTERNET refusenik Primark is dipping its toe into the online world for the first time with the trial of a click and collect service on children’s clothes and toys.
Chief executive Paul Marchant said the move today is “a milestone for our business”, that will be rolled out only in the northwest of England at first. A new website will be unveiled next year.
Sales in the third quarter were up 81% on last year when most stores were closed. They are 4% higher than the comparable pre-Covid period as shoppers bought new holiday and office clothes.
FTSE 100 holds firm, Euromoney surges on bid interest
10:13 , Graeme Evans
Copper’s latest price decline heaped more pressure on heavyweight miners today as fears mount over the impact of rising interest rates.
Anglo American and Rio Tinto shares were among stocks 2% lower after copper traded at its lowest level in 15 months and other key commodities also weakened.
In less than a fortnight, Anglo’s shares have reversed from 4,000p to 3,294p as stock market sentiment deteriorates on fears that central banks will need to be even more aggressive to get inflation back under control.
Over the weekend, Federal Reserve governor Christopher Waller signalled his support for a repeat of last week’s 75 basis points increase at the next meeting in July.
The recession fears sent US markets to their worst weekly performance since March 2020 and the FTSE 100 index also fell 4%, although there was some resilience in London today as the top flight rose 33.39 points to 7049.64.
The FTSE 250 index improved 44.53 points to 18,970, despite the selling of stocks in the building materials sector after insulation specialist Kingspan reported a sharp year-on-year fall in order intake in May and June.
The Ireland-based firm’s update contributed to paving firm Marshalls falling 5% or 26.8p to 444.8p and brick maker Ibstock reversing 4.3p to 169.7p.
Their falls were offset by evidence of more takeover activity in the FTSE 250 after Euromoney Institutional Investor said it had received an approach from a consortium involving Astorg Asset Management.
Shares jumped 24% or 262p to 1356p, which compares with the 1461p on the table. The business data provider is in discussions with the suitor, having received four previous proposals at prices between 1175p and 1350p.
FTSE 100 recovers, Rank down 17%
08:41 , Graeme Evans
London shares have made a better-than-expected start, with the FTSE 100 index up 29.28 points to 7045.53 after last week’s 4% loss.
Despite today’s easyJet warning, shares in British Airways owner IAG rose 2% as one of the best performing stocks. BT Group also lifted 2% and Primark owner Associated British Foods cheered 15.5p to 1624p following an in-line trading update.
Weaker copper and other commodity prices meant mining stocks including Rio Tinto and Antofagasta dominated the FTSE 100 fallers board following declines of around 2%.
The FTSE 250 index was close to its opening mark at 18,942, despite a rise of 26% for Euromoney Institutional Investor after it disclosed a takeover approach.
Big London market fallers included Rank Group, with the Grosvenor casinos business down 17% after it reported the slow return of high spending customers to its London sites.
Disruption warning hits easyJet shares
08:22 , Graeme Evans
Shares in low-cost carrier easyJet are 4% lower after it warned of the financial impact of operational disruption at European airports.
It is facing flight caps at two of its biggest airports, London Gatwick and Amsterdam, and having to rebook customers on alternative flights as a result.
The airline now anticipates third quarter capacity at 87% for the June quarter, which compares with 90% forecast in May. Cost guidance will also be higher than previously expected due to measures needed to offset the disruption.
It said today: “We believe that these capacity/cost impacts are a one-off this summer as we would expect all parties to build greater resilience in time for 2023 peak periods.”
Shares fell 17.05p to 419.95p, meaning they are back where they were in late 2020.
FTSE 100 back under pressure after 4% weekly fall
07:58 , Graeme Evans
The FTSE 100 index is poised to trade below 7,000 as sentiment continues to be driven by recession fears created by the recent rapid increase in interest rates.
London’s top flight lost 4% last week amid a sell-off that also saw US stock markets deliver their worst weekly performance since the early days of the pandemic in March 2020.
The Juneteenth long weekend means Wall Street markets are closed today, but traders expect volatility to continue this week amid speculation over another big rates rise by the US Federal Reserve at its next meeting in July.
Fed governor Christopher Waller said at the weekend he would support a repeat of last week’s 75 basis points move as the central bank prioritises bringing inflation back under control.
Michael Hewson, chief market analyst at CMC Markets, said: “The risk now is that the Fed will need to be even more aggressive at its next few meetings to put the inflation genie back in its bottle.
“This in turn will have spillover effects as it becomes clear that in striving to rid its own economy of inflation the resultant rise in the US dollar will only exacerbate the inflationary impulse across the world.
“This is likely to result in similar rate hiking measures from other central banks to support their own currencies.”
Hewson is calling the FTSE 100 index to open 28 points lower at 6,988.