FTSE 100 Live: Blue-chip index under pressure after record close

 (Evening Standard)
(Evening Standard)

Blue-chip shares have fallen back after the FTSE 100 index ended last week at a record high.

London’s top flight closed at 7901.80, having risen 1% on Friday after pound weakness boosted dollar-earning stocks.

The FTSE 100 opened 40 points points lower at 7861, reflecting a poor finish on Wall Street as investors reassessed the outlook for interest rates after strong US jobs figures.

FTSE 100 Live Monday

  • FTSE 100 falls back from record level

  • Britishvolt set for Australian rescue

  • Dell axes over 6,000 jobs

Numis warns on City slowdown

10:00 , Simon English

THERE was more gloom for City banks today when one of the Square Mile’s recent success stories warned that markets are at “cyclical lows”.

Numis, a niche player that has made a strong name for itself in the last two decades as a broker and adviser to many smaller companies, today said that this year has seen “a continuation of the difficult market conditions experienced throughout 2022”.

Banks large and small have been hit by a lack of new stock market flotations and a dearth of takeover activity. There has been little sign of an improvement since the turn of the year.

Clients have been sitting on their hands, delaying new issues or takeover bids while they waited for signs of economic clarity.

Goldman Sachs began a big programme of job cuts early this year, with 3200 layoffs worldwide, the worst since 2008 financial crash.

Where Goldman goes, others are likely to follow.

Bankers across town who have kept their jobs have been disappointed with this year’s bonuses – many getting a “doughnut”, City speak for a big fat zero.

Numis, ahead of an annual meeting today, said it remains “vigilant on costs” but insists it will invest where it can.

It said: “Whilst capital markets volumes remain at cyclical lows and the timing of any meaningful recovery in market activity is uncertain, the investment we have made in our platform positions us well for when volumes do recover.”

In other areas outside and traditional banking and broking, the City is buoyant. Jobs for IT and tech specialists are common place. For the bankers, deemed to have done well during the Covid crisis, times are hard.

Numis notes that it acts for one fifth of the companies in the FTSE 350, so is well placed to capitalise once those businesses restart M&A activity.

The broker is led by co-CEOs Alex Ham and Ross Mitchinson.

They said: “We continue to take advantage of the market dislocation by identifying and investing in growth sectors and selectively bringing great talent into our business.”

Numis shares are down 25% this year. They moved up 5p to 224p today.

New York stocks head lower

Monday 6 February 2023 14:57 , Michael Hunter

New York investors were once again keeping wary watch on the Federal Reserve’s intentions for US interest rates, while there was no relief from the main item of corporate news of the day, as Tyson Foods missed profit forecasts.

Amid concern that strong jobs data out at the end of last week could lead to longer run of rate hikes from the central bank, the S&P 500 fell 0.6% to 4111.03, a drop of 25 points.

Tyson Foods fell over 5% after falling beef prices took a bite from the meatpacker’s profits.

Rate outlook sets a wary tone to trade across global markets into the start of US trade, FTSE 100 down

Monday 6 February 2023 14:28 , Michael Hunter

London’s FTSE 100 continued to slide back from record highs as investors across global markets seemed uneasy with recent high valuations as they looked ahead to a period of sustained interest rate rises.

While the Federal Reserve has moved down a gear in terms of the size of its hikes, strong jobs data out in the US at the end of last week looked to give it room to carry on lifting the cost of borrowing for longer in order to fight inflation.

The main UK stock index, which hit a new record on Friday, remained shy of its new high watermark just before the start of Wall Street trade. The FTSE 100 was down 65 points at 7836.69, a drop of 0.8% with the start of full US trade just minutes away. The S&P 500 in New York was expected to fall by the same margin as its London counterpart.

Joe & The Juice returns to profit in the UK

Monday 6 February 2023 10:58 , Rhiannon Curry

Juice bar chain Joe & The Juice has revealed it has carried out a refinancing to shore up the business as it credited the launch of “several digital initiatives” with helping its UK arm swing back to profit.

The company operates around 65 shops in the UK, and posted a UK turnover for the year to the end of 2021 of £27.4 million, up from £20.3 million a year previously, with a pre-tax profit of £1.1 million versus a loss of £4.9 million in the previous 12 months.

It rapidly increased the number of digital sales during the year, and expects that to continue, it said.

Completing a refinancing means the company’s cash position is sufficient “to support current operations and strategic growth initiatives in the UK despite the negative equity in the company”, it said.

New car registrations up in January but set to remain under pre-Covid levels for the full-year

Monday 6 February 2023 10:24 , Michael Hunter

The UK’s new car market went up a gear at the start of the year, helping its recovery from Covid-era disruption to supply chains.

Registrations rose above 130,000 vehicles in January, up by almost 15%, according to the Society of Motor Manufacturers and Traders. That left the market on course for growth of just over 11% for 2023, or the delivery of 1.8 million cars, not yet enough to return to pre-pandemic levels.

Electric cars drove the increase into the ban on new petrol and diesel models in 2030. But the SMMT said the roll out of charging points was failing to “keep pace” with demand, “challenging consumer confidence.”

Hybrid electric vehicles, which can also use traditional fuels, made up over 14% of the new registrations, with volumes of this type of car up over 40%. Plug-in cars were heading for “more than one in four” registrations for the year, which would mean almost half a million more vehicles needing charging points.

In 2022, one standard public charger was installed for every 53 new plug-in cars registered, said the SMMT, which warned “poor provision” of infrastructure “risks delaying the electric transition.”

FTSE 100 falls back from record level, ASOS down 5%

Monday 6 February 2023 10:11 , Graeme Evans

Record territory for London’s FTSE 100 index failed to last today as concerns mounted over the outlook for interest rates and US-China relations.

The blue-chip benchmark closed above 7900 for the first time on Friday, but any hopes of a further push towards 8000 were derailed by a fall of 0.8% or 64.76 points to 7837.04.

The pressure came after robust jobs market figures in the United States dented earlier market optimism over an end to Federal Reserve rate hikes.

Despite today’s weakness, the FTSE 100 is still up by around 5% this year thanks to its exposure to overseas earnings and defensive leaning stocks.

Among today’s big fallers, Tesla and Amazon investor Scottish Mortgage lost 2% or 18.6p to 786.6p and Hong Kong-based Prudential dropped 3% or 42.5p to 1311.5p.

The interest rate outlook meant shares across the property sector were marked down, including warehouse business Segro whose shares retreated 3% or 27.8p to 857.2p and British Land following a decline of 12.8p to 451.1p.

Frasers Group, which is reportedly in talks to buy shopping centres in Luton and Dundee worth a combined £100 million, fell 12.5p to 790.5p.

The recent strong run for the FTSE 250 index came to a halt with a decline of 194.32 points to 20,399.14, led by a reversal of 5% or 46p to 917p for online fashion business ASOS.

Interest rate hikes still likely, Bank of England rate-setter says

Monday 6 February 2023 10:00 , Daniel O'Boyle

A Bank of England Monetary Policy Committee member has said today that further interest rate increases are still more likely than not, after the bank raised rates to 4 per cent last week.

Speaking at the Lámfalussy Lectures Conference in Budapest, Catherine L. Mann - one of the nine committee members who set UK interest rates - discussed whether inflation had hit a “turning point” that would prompt the Bank to stop raising rates.

She said it was hard to tell whether a turning point had been reached, but that she felt the consequences of being too cautious in interest rates would be worse than the consequences of being too aggressive. As a result, Mann said she expects that the Bank will continue raising rates.

“We need to stay the course, and in my view the next step in the bank rate is still more likely to be another hike than a cut or hold,” she said.

City jobs boom

Monday 6 February 2023 09:27 , Simon English

THE City is defying predictions of a post Brexit jobs cull with last year seeing a record-breaking year for financial services jobs in England and Wales.

While big banks have been cutting back on staff numbers due to a dearth of deal making and new stock market floats, demand for IT staff is booming.

A review of finance Labour market trends by Morgan McKinley and Vacancysoft shows that there were 87,000 new professional finance sector jobs in 2022, of which 45,000 were in London.

That’s a jump of 27.4% on 2021.

Post Brexit, some commentators and politicians predicted an exodus of jobs from the City as rival financial centres such as Paris and Frankfurt pushed their case. This happened at the margins in niche areas at worst.

Morgan McKinley warned against complacency however.

Managing director Hakan Enver said: “Firms will need the right support and reassurance from the Government to provide confidence in what is likely to be an uncertain year. The Government must take action to solidify the UK’s competitive advantage and inject investment into both London and the rest of the UK by increasing trade deals, simplifying tax and investing in technology innovation".

Radius Payment Solutions was the biggest individual hirer of talent last year. Sage and Revolut also took on hundreds more staff.

The big investment banks have suffered a slowdown however. Some bankers are waiting to hear what their bonus is for last year’s efforts. In some cases it will be a doughnut – City slang for a big fat zero.

Chairman of fashion brand Sosandar dies

Monday 6 February 2023 09:02 , Rhiannon Curry

The non-executive chairman of British fashion brand Sosandar has died.

Bill Murray, who had been in the role since Sosandar was founded in 2016, passed away at the weekend. No other details have been made public.

Ali Hall and Julie Lavington, Sosandar’s co-CEOs, said: “It is with great sadness that we learned of the passing of Bill over the weekend. He will be deeply missed by all who had the privilege of working with him.

“Bill has left a lasting legacy to the business and his dedication and commitment to the success and growth of Sosandar will be deeply missed. Our thoughts and condolences to Bill’s family and loved ones during this terribly difficult and sad time.”

Murray, who was in his mid-50s, spent 22 years at Haymarket Media Group until 2008, when he left to take up a number of different roles as a consultant. During his time at Haymarket he founded the UK Association of Online Publishers.

Since 2009 he had been chairman of commercial property company The Hollins Murray Group, which was founded by his great-grandfather, and he also chaired the board of 10ACT, an automotive industry software company.

A keen rugby fan, he was also chairman and then president of Camberley RFC between 2006 and 2014.

Playtech asks court to help settle dispute with largest customer

Monday 6 February 2023 08:57 , Daniel O'Boyle

Gambling technology giant Playtech will go to the courts to help settle a dispute with its largest customer: Mexico-based betting operator Caliplay.

The dispute concerns an option held by Caliplay to redeem the service fee it pays to Playtech.

Caliente had the right to redeem this fee – which came to £30.8 million in the first six months of 2022 – until 45 days after its 2021 accounts were filed.

Playtech claims the option has expired, as the deadline for Caliplay to submit its results passed more than 45 days ago. However, the Standard understands that Caliplay’s claim is that its results have not been filed. As a result, it argues it still holds the rights exercise the option.

Playtech also holds an option to acquire 49% of Caliplay.

Playtech’s share price dipped slightly this morning, down 1% to £5.80.

FTSE 100 fails to build on record, Prudential down 2%

Monday 6 February 2023 08:43 , Graeme Evans

Concerns over the outlook for US interest rates today contributed to the FTSE 100 index falling back from a record high, losing 41.52 points to 7860.28.

Some of the best performing stocks from Friday’s strong session were at the top of the fallers board, with JD Sports Fashion and B&M European Value Retail among those 2% lower.

Scottish Mortgage Investment Trust declined 2% or 19.8p to 785.4p amid a poor end to last week for Wall Street technology stocks, while Asia-focused insurer Prudential fell 2% or 33.5p to 1320.5p and Hargreaves Lansdown lost 3% or 27.4p to 922.2p.

The recent rebound for the FTSE 250 index came to a halt as the UK-focused benchmark lost 126.63 points to 20,446.83.

Virgin Money fell 3% or 6.1p to 188.45p after a ratings downgrade by analysts at Barclays, while Vesuvius declined 10.8p to 408p after the engineering firm revealed it is dealing with a cyber security incident.

FTSE 250’s Vesuvius is the latest company to face cyber attack

Monday 6 February 2023 07:40 , Michael Hunter

Vesuvius, the London-listed engineering firm, said today that it is dealing with a cyber attack.

The FTSE 250 maker of ceramics used in the global steelmaking industry and by solar energy companies said the incident “involved unauthorised access” to its systems, with the affected areas of them shut down.

Companies have been dealing with an increasing number of cyber attacks in recent times, including so-called “ransomware” incidents, where hackers take control of data and extort payments from owners via threats to delete it.

High-profile victims include The Guardian newspaper and Royal Mail, which struggled to send parcels overseas when dealing with an attack around Christmas.

According to figures from Check Point Software, which provides protection against attacks to private industry and governments, the number of incidents in the UK rose by almost three fifths in 2022, while it was up by almost two-fifths globally.

Vesuvius said: “We are working with leading cyber security experts to support our investigations and identify the extent of the issue, including the impact on production and contract fulfilment.”

Aussies save Britishvolt

Monday 6 February 2023 07:40 , Simon English

THERE could be a happy ending to the collapse of electric battery start-up Britishvolt, which collapsed last month.

Today Australia’s Recharge Industries was named as the preferred bidder for the company, which could lead to 200 jobs being saved.

Britishvolt was supposed to spearhead the UK’s electric vehicle drive, but ran out of money.

EY, which has been looking after the sale, said: "Completion of the acquisition is expected to occur within the next seven days."

David Collard, chief executive of Scale Facilitation and founder of Recharge Industries, said it "can’t wait to get started making a reality of our plans to build the UK’s first gigafactory".

Recharge fended off several other offers. EY said the sale “involved the consideration of multiple approaches from interested parties and numerous offers received".

US jobs figures fuel rates fears, FTSE 100 seen lower

Monday 6 February 2023 07:34 , Graeme Evans

US markets have been forced to reassess their view on interest rates after Friday’s US payrolls report for January showed the biggest than-expected addition of 517,000 jobs and the lowest unemployment rate since 1969 at 3.4%.

Rather than just one more rate hike in March, Friday’s data raised the possibility of another in May and dashed hopes for rate cuts before the end of the year.

Michael Hewson, chief market analyst at CMC Markets, said: “The surprising strength of Friday’s payrolls report has certainly provided food for thought, and in so doing has outlined the risk that rates could well remain high for quite some time, especially if inflation continues to stay high.”

The fears that monetary policy will stay tighter for longer caused a slide for US technology stocks as the Nasdaq Composite closed 1.5% lower on Friday, with Wall Street futures also pointing lower for today’s resumption of trading.

Asia markets were also under pressure this morning and European markets are forecast to open in negative territory, with CMC looking for the FTSE 100 to fall back from Friday’s record close with a decline of 25 points to 7876.

Dell axes over 6,000 jobs amid slump in demand for PCs

Monday 6 February 2023 07:26 , Simon Hunt

Computer company Dell is set to slash 6,650 jobs as it wrestles with a downturn in demand for PCs.

The move by the Austin, Texas-based business amounts to a 5% reduction in the workforce and follows a 6% decline in revenues in the three months to October 2022.

In a note to employees, Dell Co-Chief Operating Officer Jeff Clarke said that previous cost-cutting measures like pausing hiring and limiting travel expenses was no longer enough, and the firm made the move because market conditions “continue to erode with an uncertain future.”

“We’ve navigated economic downturns before and we’ve emerged stronger,” he said. “We will be ready when the market rebounds.”