Yahoo Finance FTSE 100 Live: Natural gas futures surge to two-month high, markets keep watch on Middle East crisis
FTSE 100 closes up 1.9%
16:40 , Simon Hunt
The FTSE 100 closed today’s trading session up 1.9% to 7,634.
Crude oil prices have steadied with Brent trading below $89 resistance but is likely to remain supported for now amid the risk of fresh instability in the Middle East after the US warned Iran not to get involved.
“Yesterday’s rising geopolitical risks in the Middle East showed how investors react during periods of stress,” said analysts at Saxo Bank.
“The defensive sectors (energy, utilities, health care, and consumer staples) were best performing sectors and defence stocks also reacted positively to the recent events with especially European defence stocks rising. Looking ahead, the Middle East focus remains a key focus ahead of US inflation data due Thursday.”
Gas prices surge to two-month high
15:13 , Simon Hunt
UK gas prices soared on Tuesday after it emerged that Finland’s government believes a leak in an underwater pipeline was caused by “external activity”.
A statement by Finnish president Sauli Niinisto said a communications cable had also been damaged.
“The damage to the underwater infrastructure has been taken seriously and the causes investigated since on Sunday,” he said.
He said it is “likely” the damage was caused by “external activity”, and added that he has been in contact with Nato.
Prime Minister Petteri Orpo said it appears the leak could not have been caused by normal activities.
Starmer sets out stall to win support of businesses
14:56 , Simon Hunt
Keir Starmer has sought to foster closer ties with big business in his key party conference speech.
The Labour leader vowed to “hold out the hand of partnership to business”, adding that he will champion the “need for a competitive tax regime”.
Starmer said he will not pursue state control nor pure free markets.
Stocks edge higher in New York
14:49 , Simon Hunt
Stocks made gains in the opening minutes of trade on Wall Street amid mounting investor speculation of another pause in interest rates by the Federal Reserve.
Both the Nasdaq and the S&P 500 made gains of around twwo-tenths of 1%.
Pound holds above $1.22 after IMF’s bleak assessment of the UK economy
13:10 , Michael Hunter
Traders on currency makets often put more emphasis on expectations for interest rates than economic forecasts, when considering these two forms of inexact science.
And so the pound has proved relatively resilient to today’s news that the International Monetary Fund has trimmed its already aneamic forecast for UK economic growth for next year, to 0.6% from 1%.
It leaves the UK at the bottom of one of the most-watched global league tables into an election year. The IMF predicts that the country will have the lowest growth in the G7 of leading economies. Growth this year is expected to be 0.5%.
Sterling was taking the news in its stride in London lunchtime trade, with the business day in New York about to get underway. The pound was at $1.2245, up 0.1%. That caps its one-year advance at just under 10.5%, with the wider move higher helped by the Bank of England’s long run of rate hikes, which policymakers have signalled could stay higher for longer.
New York stocks set to rise in opening trade as Pepsi guidance hike shakes up its shares
12:58 , Michael Hunter
New York stocks are on course for opening gains according to pre-market trade, as the measured response among global investors to escalating tensions in the Middle East continues.
The S&P 500 will add around 11 points, helped by upbeat earnings from PepsiCo.
An earnings guidance hike from the global drinks maker helped add some fizz to its stock, which was called up over 2%.
Superdrug to hire 1,000 more staff
11:44 , Simon Hunt
Superdrug today launched a festive recruitment drive, with the health and beauty chain seeking 1,000 extra workers to help cope with an anticipated spike in footfall across Black Friday and Christmas.
The retailer, which has a 13,000-strong workforce, said although the sales assistant roles are temporary, the company aims to move people into permanent jobs where possible.
Amy Davies, Superdrug’s people director said: "With the sad loss of Wilkos, we know that it’s a challenging time for many of our retail colleagues and we encourage them to apply to work with us."
Peter Macnab, who leads Superdrug which has over 780 UK and Ireland stores, said: “We have been encouraged by strong trading so far this year and know too that we have great deals coming for Black Friday and a best-in-class offering for Christmas. This enables us to confidently create jobs."
The firm joins a host of retailers that have in recent weeks launched recruitment drives ahead of Christmas, including Aldi, The Perfume Shop and Majestic.
Virgin Active seeks £70m from shareholders to steady finances
10:58 , Simon Hunt
Virgin Active has tapped its shareholders for £70 million in funding in a bid to keep its finances in check as it battles to attract customers to pay its premium membership fees amid cost-of-living pressures.
The Richard Branson-backed business, which has over 20 gyms in London and charges between £99 and £310 for a monthly membership, said shareholders had agreed to provide £45 million in cash to support the firm’s European and Asia Pacific operations with the promise of a further £25 million for liquidity and investment purposes.
The firm’s UK operations this week posted a £36 million loss in 2022 in signs it had struggled to retain pre-pandemic membership numbers after Covid-related closures during 2020 and 2021.
A Virgin Active spokesperson said the loss was driven by “an amendment to the company’s post pandemic recovery timetable reflecting the impact of the cost-of-living crisis on consumers and inflationary pressures on utility costs.”
Virgin Active Group has racked up debts nearing £300 million, with rising central bank rates pushing up its bank loan interest rates beyond 10%. One of its loans now carries an interest rate of over 15%.
The rises mean Virgin Active now faces a £27 million annual cost to service its debt interest payments, the Standard calculates – the equivalent of over 13,000 memberships, based on an average annual fee of £2,000.
FTSE 100 up 1.5%, BAE, Lloyds and Prudential higher
10:23 , Graeme Evans
Demand for defence stocks led by BAE Systems continued today as investors positioned for a protracted bout of elevated geopolitical tensions.
FTSE 100-listed BAE put on another 13p to 1038p, meaning the shares are now up around 7% since the weekend attack on Israel by Hamas.
Rolls-Royce also added 5p to 210p today, while the technology specialist Qinetiq lifted another 2% or 6.4p to 324.4p in the FTSE 250 index.
The flight to defence stocks continued even as other parts of the London stock market showed signs of calming following yesterday’s volatility.
British Airways owner IAG put back some of Monday’s 6% slide by adding 2.6p to 149.35p while hotels chain InterContinental improved 78p to 5986p.
There was also relief that oil prices had steadied after yesterday’s 4% jump triggered by fears over the impact of a prolonged Israel-Hamas war on global supplies.
With Brent Crude holding firm at $88 a barrel, energy giants BP and Shell consolidated their earlier gains by adding 3.4p to 523.7p and 4.5p to 2653.5p respectively.
The City’s risk appetite was helped by hopes in the US that interest rates have peaked.
The optimism came after Federal Reserve vice chairman Philip Jefferson said the central bank will need to be careful about further rate rises given the recent increase in bond yields.
The FTSE 100 index jumped 1.5%, up 110.46 points to 7602.47, led by gains of 4% for mining giants Anglo American and Antofagasta.
Retail, banking and property stocks also performed well, with Lloyds Banking Group up by 1.2p to 43.3p after US bank Jefferies sweetened its “buy” recommendation with a new 80p price target.
Prudential also surged 4% or 38.6p to 906.4p after Deutsche Bank looked beyond short-term gloom for the Asia-focused insurer by highlighting “long-term value” and a 1460p target price.
The FTSE 250 index jumped by 1.6% or 284.44 points to 17,856.50, including a rise of 1.5p to 48.5p for Currys after it revealed it is reviewing bid interest for its operations in Greece and Cyprus.
Speedy hire makes snappy acquisition
09:59 , Simon Hunt
Speedy Hire, the plant and equipment provider, snapped up an environmentally conscious rival today in a £20 million swoop.
It is buying Green Power Hire for £10 million in cash and will take on debt of £10.2 million. The company provides batteries used to power construction sites and its industry-leading, digitally powered kit means customers can cut costs and make environmental savings.
As it unveiled the deal today, Speedy said it was seeing strong demand for “eco products and sustainable power solutions”, with green batteries especially in demand.
Speedy wants to be a net-zero business in terms of carbon emissions by 2040. It is buying Green Power Hire from its main owner Russell’s Kirbymoorside and four other investors.
Reach reveals Facebook-shaped hole in revenues
09:34 , Simon Hunt
The impact of Facebook’s move away from news on major publishers became clearer today, in a trading update from Reach.
The publisher of the Daily Mirror and the Daily Express revealed a drop of over 15% in digital revenue in the nine months to the end of the third quarter. Print revenue was also down, by 3.8%, as advertising sales dropped, offset by a rise in circulation revenue from sales of newspapers, which ticked up by 0.4%.
As well as its national papers, Reach owns major local and regional dailies, including the Manchester Evening News and the Daily Record in Scotland. It has 130 titles in total.
Mark Zuckerberg’s Meta, owner of the biggest social media network in the world, pulled the plug on news content deals with European publishers in September. It said people were not coming to Facebook for news.
Reach pointed to “well-publicised declining digital referral volumes” today, but stood by annual profit forecasts. Revenue from sales of print copies rose and it called newspapers “a resilient and predictable revenue stream.”
Its plan to offset the decline in traffic to its titles from Facebook includes “improving customer engagement, diversifying revenues and driving efficiencies.” It plans to cut full year operating costs by 5% to 6% and said today it was “on track” to hit the target.
Shares rose 2.2p to 83p
City Comment
09:26 , Simon English
FOR a little while there Rishi Sunak’s inflation dream looked like it was going his way.
The siege in Gaza could turn it into a nightmare – a small one compared to the events in the Middle East, but a problem for him nonetheless.
Just last week the PM said cutting inflation – as if that were in his gift – is a bigger priority than tax cuts he in any case can’t afford.
Events outside his control were always likely to have a wider impact on inflation than whatever he, or the Bank of England or indeed the UK consumer, did in terms of increasing interest rates and slashing spending.
So it may prove.
Oil prices have already soared in reaction to the Hamas/Israel/hostage crisis. They might keep going, past $100 a barrel, perhaps, with obvious implications for petrol prices.
The bigger thing to watch is what happens to natural gas prices, since households spend twice as much on heating and powering their homes (which is driven by the gas price) than they do on filling up their cars.
The signs so far aren’t great. Gas futures – what investors think it will cost later – rose more than 7% this morning. Supplies of gas from Israel to Egypt dropped by 20% in Israeli government instructions – they think they might need it at home, so exports are down.
Since Russia spent so many years flogging cheap gas into Europe, many factories are now reliant on it. And it’s not like they can switch back to oil by flicking a switch, such changes take years of investment and planning.
Now Capital Economics is still forecasting that CPI inflation will fall from 6.7% in August to 4.8% in December, which if accurate means Rishi can claim to have won his inflation bet (that is all it was).
If utility prices spike again, that 4.8% figure begins to look in serious risk. There isn’t a lot the PM can do about that.
FTSE 100 rallies, Wizz Air up 4% in FTSE 250
08:30 , Graeme Evans
Hopes that US interest rates have peaked today lifted London shares, with the FTSE 100 index up 0.8% or 60.10 points higher at 7552.31.
Retail, banking and property stocks performed well as Marks & Spencer added 4.6p to 225.6p, Lloyds Banking Group improved by 0.7p to 42.8p and Land Securities gained 10.6p to 591.8p.
Prudential rose 3% or 20.6p to 888.8p after a note by Deutsche Bank looked beyond short-term gloom for the insurer by highlighting a target price of 1460p.
With oil prices steadier, BP and Shell shares drifted 5p to 515.3p and by 18.5p to 2630.5p respectively.
The FTSE 250 index jumped by more than 1% or 220.62 points to 17,792.68, including a 4% rebound for Wizz Air. Currys shares also improved 1.6p to 48.6p after the retailer revealed it is reviewing bid interest for its operations in Greece and Cyprus.
Grocery price inflation continues to cool while ice cream sales are up in sunny September
08:00 , Michael Hunter
Bargain-hunting shoppers helped push the overall rate of of grocery price inflation down in September for the eleventh consecutive month, to its lowest since July 2022.
The headline rate eased to 11%, according to fresh figures out this morning from Kantar, the industry analyst group. The drop was helped by a further wave of discounting, as the big-name chains battled for market share with consumers staying conscious of hard-pressed household budgets.
Spending on discounted groceries made up over 26% of the total, the biggest proportion since June 2022. That helped the UK’s biggest single retailer, Tesco, up its market share to 27.4%. Lidle is the fastest growing retailer, with sales up over 15%.
Kantar’s Tom Steele said: “Supermarkets are looking at all the different ways they can deliver value at the tills and while the emphasis for some time has been on everyday low prices, the retailers are starting to get the deal stickers out again.”
And the price of sat least one everyday essential actually fell. The price of butter was down by 16p year-on-year.
The September heatwave was good fror sales of ice cream . Shoppers sent sales of the frozen treat up by 27%.
YouGov ups dividend as profits surge
07:23 , Simon Hunt
YouGov has upped its dividend by 25% to 8.75p as it cheered a surge in profits.
The London-based research and polling company posted a 17% rise in revenues to £258.3 million in the year to end July, while pre-tax profits rose 77% to £56.4 million.
YouGov said custom research was among its strongest performing areas, with a 27% increase in sales to £121.8 million.
Co-founder Stephan Shakespeare stepped aside as CEO in August to be replaced by Steve Hatch a former Vice President at Meta.
FTSE 100 seen higher, oil price steadies
07:20 , Graeme Evans
The FTSE 100 index is forecast to open more than 50 points higher after US markets rallied on the back of comments by Federal Reserve officials.
They included vice chairman Philip Jefferson, who said the central bank will need to be careful about further rate rises given the recent increase in yields.
With traders hopeful that interest rates will stay the same at the Fed’s November meeting, the Dow Jones Industrial Average and S&P 500 index both closed 0.6% higher and the Nasdaq Composite lifted 0.4%.
On the back of these gains, CMC Markets expects the FTSE 100 index to open up 53 points at 7545. The top flight was broadly unchanged by last night’s close, but this masked sharp movements in some sectors caused by events in the Middle East.
Shares in British Airways owner IAG dropped 6% but BP and Shell both added 3% following a 4% rise in oil prices, while defence industry manufactuerer BAE Systems jumped 4.5%.
Brent Crude steadied at the start of today’s session, down 0.75% to $87.49 a barrel.
Recap: Yesterday’s top stories
Monday 9 October 2023 21:52 , Simon Hunt
Good morning from the City desk of the Evening Standard.
Markets were rocked yesterday as Hamas’s attack on Israel deepened tensions across the Middle East and raised worries over energy supplies.
Brent crude jumped more than 5% at one stage to 89 US dollars a barrel, before settling 3.97% higher at 87.94 US dollars (£72.04) when markets closed in London.
But Oil analysts now worry that the US will impose sanctions on Iran, which will hit oil exports and send the oil price higher. While such sanctions already exist, they have been lightly enforced under the Biden administration.
Tougher action could send Brent crude above $100 a barrel, analysts warn, a blow to both motorists and the wider economy.
Meanwhile, shares in Metro Bank soared as much as 20% as the challenger bank was put on firmer footing after it unveiled a deal to shore up its finances, including a £325 million capital raise and £600 million in debt refinancing.
The equity raise was led by Spaldy Investments, which is contributing £102 million in a move that gives it a 53% shareholding once the restructuring is complete. Spaldy’s founder is Colombian billionaire Jaime Gilinski Bacal, who has been an active investor in Metro in 2019.
Here’s a summary of our other top headlines from yesterday:
GSK signs £2.5 billion partnership to distribute its shingle vaccine in China
Nat Rothschild’s Volex hit by cyber attack
Chemicals maker Croda issues profit warning as it seeks to cut costs
Roadside rescue service The AA reported a rise in its number of members, helping it drive revenue and profits north
Estate agency chain Dexters buy LiFe Residential to expand into Hong Kong and Singapore
Historic Soho private members Blacks formed in 1732 closes its doors after falling into insolvency
Richard Caring’s Caprice Holdings, owner of Scott’s, Sexy Fish and J Sheeky, returns to profits
And...why the publishing industry faces billions in costs as students illegally download texts
