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What to Watch: Vape ban hits Rizla-owner, Domino's sales rise, and stocks pick-up

Oscar Williams-Grut
Senior City Correspondent, Yahoo Finance UK
Anthony Caldalda of Holyoke vapes in protest during a demonstration against Massachusetts Governor Charlie Baker's vaping ban on the front steps of the Massachusetts State House in Boston on Nov. 19, 2019. Photo: David L. Ryan/The Boston Globe via Getty Images

Here are the top business, market, and economic stories you should be watching today in the UK, Europe, and abroad:

US vape ban hits Rizla-owner

Imperial Brands’s (IMB.L) stock slipped on Wednesday after it warned a ban on flavoured vaping in the US would reduce earnings by 10% this year.

Imperial, which owns brands like Golden Virginia rolling tobacco and Rizla papers, said the cost from regulation and slowing demand would rise to £85m this year. It said it had put in place a cost saving drive to offset some of the effects but would still take a £40m hit to profits as a result. Shares fell 7.9%.

Domino’s sales rise

Domino’s Pizza (DOM.L) reported a solid rise in sales, but warned of continued issues with its international business.

Pizza sales rose 3.9% in the 13 weeks to 29 December, Domino’s said. However, issues at its international business mean the company is set to take a £60m write down and likely to make an operating loss of £20m for the financial year.

Analysts at Barclays said Domino’s UK business was “solid” but issues with the international arm were “worse than expected.” Despite this, Domino’s shares rose 7.9%.

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'Pause' in stocks sell-off as coronavirus fear subsides

Investor fears about the spread of the deadly coronavirus appear to be easing.

Asian stock markets bounced overnight on Wednesday and European shares largely avoided losses at the open.

The Shanghai Composite (000001.SS) added 1.2% on mainland China, despite no market intervention from the People’s Bank of China on Wednesday. The central bank was forced to step in and inject liquidity in markets on both Monday and Tuesday.

Elsewhere, the Hong Kong Hang Seng (^HSI) rose 0.2% and Japan’s Nikkei (^N225) closed up 1%.

Major stock indexes in Europe had a quiet open but avoided the large swings that have characterised much of the last week and a half. The FTSE 100 (^FTSE) was up 0.7%, while the DAX (^GDAXI) was up 1.2% in Frankfurt and the CAC 40 (^FCHI) in Paris was up 0.9%.

US stocks had rallied strongly on Tuesday and futures were pointing to another positive open later today. S&P 500 futures (ES=F) were up 0.9%, Dow Jones Industrial Average futures (YM=F) were up 0.9%, and Nasdaq futures (NQ=F) were up 1%.

Services sector sees strongest growth since 2018 in latest Boris bounce

The UK services sector saw its strongest growth since September 2018 last month, in the latest sign of a rebound in the economy following prime minister Boris Johnson’s emphatic election win.

A closely watched survey by IHS Markit found that business activity rose for the first time in five months in January, with the sector’s purchasing managers’ index reading coming in at 53.9, well ahead of expectations.

PMIs are an indicator of private sector activity and are given on a scale of 1 to 100. Anything above 50 signals growth, while anything below means contraction.

“January data pointed to a solid recovery in the performance of the UK service sector, with business activity, new work and employment all expanding at a faster pace than seen at the end of 2019,” said IHS Markit on Wednesday.

Owner of New York Stock Exchange makes takeover offer for eBay

New York Stock Exchange-owner Intercontinental Exchange (ICE) made a tentative takeover offer for e-commerce giant eBay (EBAY), potentially valuing the company at more than $30bn (£23bn), according to the Wall Street Journal.

Confirming that it had approached eBay, Intercontinental Exchange said that the company had not engaged with the offer in a “meaningful” way.

“We are not in negotiations regarding the sale of all or part of eBay,” ICE told the Financial Times.

Citing unnamed sources familiar with the discussions, the Financial Times said that ICE, which is the world’s second-largest exchange group, held on-and-off talks with eBay, but did not at any stage make a formal takeover offer.

“ICE approached eBay to explore a range of potential opportunities that might create value for the shareholders of both companies,” ICE told the Wall Street Journal late on Tuesday. “EBay has not engaged in a meaningful way.” 

Airbus and Cathay Pacific count coronavirus costs

Airbus (AIR.PA) and Cathay Pacific (0293.HK) have joined the growing list of companies taking emergency measures in response to the coronavirus epidemic in China.

French plane manufacturer Airbus said on Wednesday it had shut a factory in China that assembles A320 planes and asked all staff in China to work from home.

“Airbus is constantly evaluating the situation and monitoring any potential knock-on effects to production and deliveries and will try to mitigate via alternative plans where necessary,” the company said in a statement on Wednesday. Shares fell 0.7% in Paris.

Separately, Hong Kong flag carrier Cathay Pacific has asked staff to take three weeks unpaid leave as it battles with slumping for travel in the region.

UK firms hiring more workers in 'Brexit jobs'

New figures reveal the rise of a new Brexit industry in Britain, as firms have hired growing numbers of staff to handle the UK’s exit from the EU.

Data from jobs site Indeed, seen exclusively by Yahoo Finance UK, shows the rising number of job ads specifically highlighting Brexit issues since the 2016 referendum.

The roles are heavily skewed towards higher-paid professional roles, with lawyers, tax and accountancy professionals, lobbyists, and consultants among the most in demand.

The number of adverts mentioning Brexit has soared from 25 roles for every million jobs in September 2016 to a peak of 368 roles in October 2018. It has since dropped slightly to 300 roles in every million advertised on Indeed in September last year.