FTSE 100 wrap: Markets rebound as Covid fears ease
17:40 , Simon Freeman
Greed started to edge out fear in global financial markets today as comments from the World Health Organisation that the Omicron variant of Covid-19 could be mild took the sting out of the latest sell-off.
London stocks bounced higher as a result, driven by solid increases for travel, leisure and hospitality firms.
Nevertheless, they lagged behind the likes of Germany, where positive noises regarding the variant helped to soothe increased concern over rebounding Covid case numbers.
Away from Omicron, markets were also able to look beyond the surprise shift from Fed chairman Jerome Powell on Tuesday that the central bank was looking to focus further on the inflation part of its mandate.
The FTSE 100 closed 109.23 points, or 1.55%, higher, at 7,168.68p.
Elsewhere, the German Dax increased by 2.47% and the French Cac increased by 2.39%.
Michael Hewson, at CMC Markets UK, said: “Markets in Europe are enjoying a decent turnaround today, starting December on a more positive note than how they finished November, as the Omicron seesaw in sentiment continues.
“This expectation of a more benign outcome, as a WHO official says early data shows existing vaccines should be effective, has seen a wholesale rebound in the likes of travel and leisure stocks, with British Airways owner IAG, and Premier Inn owner Whitbread leading the way.
“The lack of appetite for co-ordinated travel restrictions amongst EU leaders may well also be helping on the margins with easyJet and Wizz Air also showing strong gains.”
Across the Atlantic, Wall Street saw a similar jump as it also benefited from a sharp rise in job numbers in the ADP employment report for November.
Meanwhile, sterling recovered slightly after hitting a two-week low against the euro on Tuesday but lost steam slightly on the dollar.
The pound moved 0.03% lower versus the US dollar at 1.330, and increased 0.08% against the euro at 1.175.
In company news, Pendragon climbed after the car dealership increased its full-year profit outlook for the second time in less than two months as it said new car supply issues have not been as bad as feared.
The group said that, while there is still a shortfall of new cars, it was lower than expected in October and November.
Shares in the company rose by 1.7p to 20.3p as a result.
Meanwhile, Abingdon Health plummeted in value after the York-based lateral flow test manufacturer said it would sell up to £5.5 million worth of shares to make up for a capital shortfall which it expects in the first quarter of 2022.
The company finished 11p lower at 27p.
BT Group finished 7.7p higher at 166.3p as it continued to benefit from speculation it could be a takeover target.
The price of oil rebounded after dropping to a three-month low on Tuesday, with Brent crude up 2.28% at 70.81 dollars per barrel when the London markets closed.
The biggest risers on the FTSE 100 were BT, up 7.7p to 166.3p, Intermediate Capital Group, up 95p to 1,285p, Mondi, up 72p to 1,791.5p, London Stock Exchange, up 250p to 6,752p, and Darktrace, up 16.6p to 476.6p.
The biggest fallers on the FTSE 100 were Ocado, down 56p to 1,739.5p, United Utilities, down 299p to 9,816p, Pearson, down 10p to 583.4p, Hargreaves Lansdown, down 10p to 1,327.5p, and Polymetal, down 8p to 1,364p.
FTSE 100 update: DarkTrace rises
15:26 , Simon Freeman
THE FTSE 100 continues its bounce back toward health as what news there is on the Omicron variant turns out to be less bad than feared.
By 3pm, it had given up some of the morning’s more optimistic gains to settle a respectable 71 points, or 1%, higher than opening at 7135.
That is still some way off the Friday morning peak of 7310 before the latest sell-off.
The blue-chip’s top gainer is DarkTrace. The Cambridge cyber-security firm is gamely battling back from a 40% crash from 800p in November which coincided with the end of the six-month lock-in period and a devastating analyst note calling its AI-driven tech a “gimmick”.
It is up 21p, or 5%, so far today, at 482p, but too late to save it from expected relegation when the results of the FTSE100’s quarterly reshuffle are announced after markets close this evening.
Catalytic convertor firm Johnson Matthey, whose market cap also had a torrid November after ditching its electric battery division, is likely to join it in the dropzone to the FTSE 250.
Electrocomponents and veterinary business Dechra Pharmaceuticals are waiting in the wings to probably replace them.
Meanwhile, Ocado was the main index’s biggest faller today, down 3.4% to 1735p as traders see the threat of an imminent return to lockdown recede.
The FTSE 250 is up a slightly jauntier 1.5% to 22877, with positive updates from asset manager Lion Trust and commercial van rentals outfit Redde Northgate giving them respective bumps of 14% and 13%.
FTSE strongly higher in lunchtime trade
The FTSE 100 is up 1.4% to 7161 this lunchtime. British Airways owner IAG is top of the index, up more than 5%. The stock has been like a yo-yo over the last week. Investors simply can’t make up their minds on Omicron but today the feeling seems to be that it won’t be that bad.
“There seemed little reason for positivity but, nonetheless, the FTSE 100 managed to make solid progress as people reached for their advent calendars on Wednesday,” says AJ Bell investment director Russ Mould.
“We are in a period of several weeks where the market will be increasingly desperate to find out just how much more infectious Omicron might be and whether it will escape existing vaccines.
“A definitive answer will have to wait until mid-December at the earliest it seems, but in the interim stock markets could react violently to hints in either direction.”
IG sells exchanges to Crypto.com
12:22 , Oscar Williams-Grut
Crypto.com, which earlier this month signed a 20-year deal to re-name the Staples Centre the Crypto.com Arena, is paying $216 million to buy two exchanges from IG Group.
Crypto.com will buy Chicago-based Small Exchange and the North American Derivatives Exchange. The all-cash deal is expected to close in the first half of next year.
Windward charts course to London
11:37 , Simon Freeman
AN AI company for ships chaired by former BP chief Lord Browne will launch on the London stock exchange next week valued at more than £126 million.
Windward’s real-time tracking tech is used by customers including BP, Shell and HSBC to ensure chartered vessels do not violate shipping regulations or international sanctions.
Customers also include US defence and homeland security agencies, the EU coastguard and the United Nations.
It has so far raised £34.5 million from institutional investors including Hargreave Hale, Gresham House and Premier Miton.
Early backers include the Salesforce CEO and internet entrepreneur Marc Benioff.
Co-founders Ami Daniel and Matan Peled, both ex-Israeli navy officers, hold 7% stakes.
Funds raised in the IPO will be used to expand its data sources, develop tech and invest in sales and marketing.
Daniel said: “The maritime trade industry is vast and complex with multiple stakeholders and data visibility is low. Our platform shines a light on the industry.”
Sir Martin Sorrell’s S4 Capital strikes 12th deal in 11 months
11:17 , Oscar Williams-Grut
Sir Martin Sorrell’s S4 Capital is continuing its aggressive deal spree with its 12th transaction in 11 months.
The digital agency today said its operating company Media.Monk would merge with Maverick Digital, a Chicago-based company that helps companies including McDonalds and Unilever uses the Salesforce platform. Terms of the deal weren’t disclosed.
Sorrell said he was “delighted” by the deal. Maverick founder Belal El-Harazin said the deal was a “fantastic opportunity.”
Shares in S4 rose 2p, or 0.3%, to 581p.
Travel and leisure stocks surge
10:37 , Graeme Evans
Investors piled back into travel and leisure companies today as the FTSE 100 index moved closer to recovering losses seen on Red Friday.
Shares in British Airways owner IAG and Premier Inn chain Whitbread jumped 5% on hopes the Omicron variant will not be as bad as had been feared during Friday's stock market rout.
Among popular mid-cap stocks on the march, cinema chain Cineworld surged 8% and low-cost airline easyjet cheered 6%.
The FTSE 100 index rebounded from yesterday's losses to improve 1.3% or 96.60 points at 7156.05, taking it closer to the 7,310 seen before last week's sell-off.
The turnaround came even though Wall Street was spooked by Federal Reserve boss Jerome Powell signalling a faster winding down of America's massive bond-buying scheme.
AJ Bell's investment director Russ Mould said: “Some traders appear to have decided the weakness has gone far enough for now as they emerged to bid up stocks and oil.”
Brent crude jumped 4.5% to $72.33 a barrel, sending shares in BP 3% higher. BT Group also added 5.5p to 164.1p after JP Morgan backed the group as one of its picks for 2022.
The FTSE 250 index improved 1.3% or 295.51 points to 22,815.22, led by biomass power station business Drax after forecasting earnings towards the top end of City expectations.
Its shares gained 8% or 42.5p to 592.5p, just ahead of Cineworld as investors looked to a potential boost from a strong seasonal line-up that includes Disney’s Encanto.
Redde Northgate rose 25p to 420p after the van rental business reported strong momentum amid the surge in demand created by the online shopping boom.
The group, which also offers a range of automotive support services, said half-year profits jumped 177% to £78.9 million.
Favourable trends also continue to benefit Pendragon, with the car dealership up another 6% or 1.2p to 19.8p after its latest upgrade to forecasts.
Profits and revenues plunge at Peel Hunt
10:15 , Simon English
Questions were raised about the flotation of Peel Hunt today when it reported that revenues had plunged just before it joined the stock market.
The small and mid-cap broker has had a good pandemic, raising cash for clients and advising on flotations.
Its own float at 228p in September on AIM valued the business at £280 million and raised £70 million for staff and other investors.
Today Peel revealed that revenue sank 23% to £71 million in the half-year ahead of the float. Profit halved to £29 million, largely due to the costs of joining the market.
The shares fell slightly to 210p, making it one of the many floats this year that is under water.
CEO Steven Fine remains upbeat. He said: “We continue to grow our number of retained Investment Banking clients and have a healthy deal pipeline with a strong balance of transactions,” said CEO Steven Fine.
“We’re well positioned to execute our growth plans, which include opening a European office to support our growing distribution franchise across the continent. We remain on track to deliver on our budget for the year.”
Twist in takeover battle for Blue Prism
09:21 , Oscar Williams-Grut
The board of London-listed takeover target Blue Prism today switched sides and backed a new last-minute bid from US tech firm SS&C.
Connecticut-headquartered SS&C today offered to buy AIM-listed tech company Blue Prism for £1.24 billion, trumping a £1.22 billion bid from Texas private equity firm
Vista initially offered £1.1 billion in late September but sweetened its proposal after SS&C reveled it was circling Blue Prism. Earlier this month SS&C said it was considering a 1200p-a-share bid for the company. Today’s offer is 1275p-a-share.
The board of Blue Prism initially backed the Vista offer but today switched allegiances, saying SS&C’s firm bid was “a superior offer”. Investors were due to vote on the Vista proposal next week, but that meeting has now been called off.
Shares in Blue Prism rose 18p, or 1.4%, to 1317p, above SS&C’s offer.
FTSE 100 higher, oil price up 4%
08:27 , Graeme Evans
Investors have started the month on the front foot after the FTSE 100 index climbed 59.96 points to 7119.41.
The improvement for London's top flight continues the yo-yo trends seen since Friday's 3.6% slide.
Shares in London Stock Exchange, catering giant Compass and miner Glencore are among those more than 2% higher.
BP also rallied 2.5% as Brent crude futures lifted 4% to $72 a barrel.
The FTSE 250 index added 168.88 points to 22,688.60, with biomass power station business Drax up 3% after forecasting earnings towards the top end of City expectations.
Nationwide: UK house prices now 15% above pre-pandemic levels
08:05 , Oscar Williams-Grut
UK house price have returned to double digit percentage growth after a brief lull at the end of the stamp duty holiday in September.
Nationwide said its House Price Index recorded price growth of 10% in November, a touch higher than the 9.9% recorded in October. The average price of a UK house now stands at £252,687, which is almost 15% higher than pre-pandemic levels in March 2020.
Robert Gardner, Nationwide’s chief economist, said: “There have been some signs of cooling in housing market activity in recent months. For example, the number of housing transactions were down almost 30% year-on-year in October. But this was almost inevitable, given the expiry of the Stamp Duty holiday at the end of September, which gave buyers a strong incentive to bring forward their purchase to avoid additional tax.”
Tough month for risk assets
08:03 , Graeme Evans
The FTSE 100 index fell by 2.5% across November after a turbulent finish to the month caused by the emergence of the Omicron variant of Covid-19.
Deutsche Bank notes that 28 out of 38 non-currency assets fell over the month, with risk assets losing significant ground and oil prices taking a sharp turn lower.
The figure compares with 21 showing progress during the month prior to Omicron.
Deutsche Bank added: “Sovereign bonds outperformed as investors moved into haven assets and reassessed the likelihood of future rate hikes, even as inflation remained stronger than many had expected.”
Powell warning adds to markets pressure
07:39 , Graeme Evans
Federal Reserve boss Jerome Powell has added to pressure on markets by signalling the faster-than-expected unwinding of US stimulus.
Powell also told the Senate Banking Committtee that inflation could persist for longer than expected, a shift from his previous guidance that price pressures are transitory.
His case for a faster tapering of economic support came despite ongoing uncertainty over the Omicron variant, which Powell warned could slow progress in the labour market and intensify supply chain disruption.
Accelerating the wind down of the Federal Reserve's $120 billion a month asset purchase scheme opens the door to earlier-than-expected hikes in interest rates.
This prospect led to a sharp move higher in Treasury yields, having been lower earlier in the day after the boss of Moderna warned existing vaccines may not be so effective against the new strain.
The comments from Powell and Moderna boss Stephane Bancel were unhelpful for Wall Street as the S&P 500 closed almost 2% lower for its lowest level in a month.
Deutsche Bank markets commentator Jim Reid said: “It’s hard to overstate how broad-based this decline was, as just seven companies in the entire S&P moved higher yesterday, which is the lowest number of the entire year so far and the lowest since June 11, 2020.”
The FTSE 100 index fell 0.7% yesterday in the wake of the Moderna warning, having fallen 3.6% on Friday after the discovery of the Omicron variant.
CMC Markets expects London's top flight to open 64 points higher at 7123, with the focus on the Europe-wide release of monthly data covering the manufacturing sector.