Yahoo Finance FTSE 100 Live: Stocks weaken on China’s Covid surge, Compass posts results
A surge in Covid cases in China today fuelled stock market worries about tighter restrictions in the world’s second largest economy.
Mainland China and Hong Kong stocks were sharply lower, with the Hang Seng down by 3% at one stage on Monday.
Today’s session in London includes results from catering giant Compass and FTSE 250-listed lender Virgin Money.
FTSE 100 Live Monday
Virgin Money posts big jump in profits
Shares lower as China sees rise in Covid cases
Compass reports trading at pre-pandemic levels
That’s all folks. Tomorrow: AO World half-year results
Monday 21 November 2022 18:10 , Simon Hunt
That concludes our coverage today, where a small dip in the FTSE 100 at close has been outshone by England’s stellar performance in the World Cup.
The Evening Standard City desk will be back from 7am tomorrow, where we’ll be chatting to the CEO of AO World. The company, which has seen its stock fall 51% since January, will be reporting its half-year results, which should prove a useful bellwether for the fortunes of online retailers as they brace for a recession.
FTSE 100 closes down 9 points: Evening wrap
Monday 21 November 2022 17:39 , Simon Hunt
The FTSE 100 closed almost flat, down just 9 points down at 7,376 after losses in energy stocks were offset by gains from healthcare and consumer goods stocks.
A wave of outsourcing by cash-strapped companies has buoyed results at catering group Compass, which posted a 175.2% jump in profits to £1.5 billion for the last year. But that proved inadequate for investors, who sent the stock down around 4%.
AJ Bell investment director Russ Mould said: “Investors seem unimpressed that the profits growth for the fiscal year to September 2023 will be weighted toward the first half, between now and March, but management seems confident enough judging by the meaty increase in the annual dividend and the extension of the ongoing share buyback programme.”
What the FTX downfall can teach us about crypto regulation
Monday 21 November 2022 15:29 , Simon Hunt
Dan Moczulski, UK MD of social investing network eToro, shares his thoughts on how to strengthen UK crypto regulation in the wake of the FTX downfall.
“Regulation, long-argued over in the crypto sphere, is an important validation for a sector that is battling image problems.
“But regulation, far from quashing innovation or restricting the freedom of projects to develop, will set essential ground rules and protections for market participants – from businesses and innovators to investors and end users.”
“eToro has been providing regulated access for investors to cryptoassets for nearly a decade already, and we see the future of the asset class as hugely exciting, especially in the UK. A robust, positive regulatory framework can help to cement this future.”
New York stocks slip as China’s Covid woes set cautious tone on global markets
Monday 21 November 2022 14:39 , Michael Hunter
The S&P 500 started the day lower in New York with traders across global markets in cautious mood on worries about the impact on global growth of further anti-Covid measures in China.
The broad New York stock index slipped 0.2% to 3953.0, a drop of just over 11 points.
But shares in Disney rose on news of the return of Bob Iger as its chief executive. The global entertainment giant was up over 9% after a series of disappointing results under ongoing CEO Bob Chapek.
Dollar earners help FTSE 100 turn positive and retake 7400-point mark
Monday 21 November 2022 14:00 , Michael Hunter
As the US currency rebounded from multi-session lows, dollar earners listed on the FTSE 100 helped London’s main stock index turn positive in afternoon trade, even with Wall Street markets set to fall and losses across much of Europe.
The main UK index bucked the trend, up almost 15 points to 7400.10, a rise of 0.2%. With the pound down 0.6% to $1.1811, companies generating their revenue abroad moved to the top of the leaderboard, helped by the prospect of their earnings being flattered when converted into sterling.
GSK, the pharmaceutical company, was up 2.5% at 1403p, the best single gain of the session. AstraZeneca, the vaccine maker, rallied 1.7% to 11104p.
BAE Systems, the defence contractor, was up 1.6% to 783p.
New York stocks set to slip on rates outlook
Monday 21 November 2022 13:40 , Michael Hunter
The prospect of aggressive US interest rate hikes kept Wall Street stock futures in the shade during the run-up to the start of full trade at the start of the week featuring the Black Friday sales after the Thanksgiving holiday.
Last week’s stronger-than-expected retail sales data continued to cast a shadow, with the S&P 500 expected to start down 0.3% at 3961.85.
Richard Hunter, Head of Markets at interactive investor, said: “Lingering concerns that over-tightening by the Fed could lead the country into recession remain at the top of the watchlist. For the moment, the vitally important US consumer has generally remained in spending mode, although there are some concerns that this has been enabled by individuals taking on more debt.”
Dollar bounces up off multi-day lows as haven appeal returns
Monday 21 November 2022 13:16 , Michael Hunter
Worries about a slowdown in China’s ability to lift Covid restrictions set the tone to currency trade, lifting the dollar up off its lowest levels in almost two weeks on haven demand.
The index tracking the US currency against a range of alternatives bounced higher by almost 1% to almost 108 points, with worries about the implications of deeper restrictons in China on the global growth drawing investors into safer assets.
Sterling fell almost 0.7% to $1.1807.
Brent crude oil price falls under $87 a barrel as demand outlook tracks China’s Covid struggles
Monday 21 November 2022 12:15 , Michael Hunter
Brent Crude was trading around its weakest level since late September on an expected drop in demand as China tightened Covid restrictions after confirming the first death from it in six months.
It left the international oil price on course for its fourth straight session of decline, down a further 0.7% to $86.99, taking it under $87 for the first time in two months. The fall added to a drop of almost 10% made over last week, in a trend that if continued could help ease inflationary pressure.
US oil contracts were also lower, with West Texas Intermediate contracts also down by 0.7% to $79.55
Keywords spells out higher profit guidance sending shares higher
Monday 21 November 2022 11:40 , Michael Hunter
Global computer games company Keywords Studios, which has contributed to blockbusters like Fortnite and Anthem, upped profit guidance today, as the strong dollar gave its work more bang for the buck.
The technical and creative services company said it now expects profit before tax of €110 million, up by almost 30%, from revenue of €675 million, up by almost a third. Previous predictions were for profit of €102 million and the top end of its revenue forecast was €648 million.
Founded in the Dublin suburb of Leapordstown in 1998 and listed on London’s Alternative Investment Market in 2013, it has contributed to some of the biggest games in the world, including Star Wars Jedi: Fallen Order, Doom Eternal and Clash Royale.
The company now has offices all over the world, including in Poland, Italy, Canada and the US. It also stayed upbeat on its prospects, predicting that organic growth would remain above medium-term guidance of 10%, with profit guidance moving toward 15%.
Its shares rose over 120p to 2858p, a rise of almost 5%.
Disney shares get a boost after ex-CEO makes a surprise comeback
Monday 21 November 2022 10:34 , Simon Hunt
Shares in Disney rose 10% in pre-market trading this morning after veteran executive Bob Iger has made a surprise comeback to the media conglomerate, reprieving his role as chief executive just two years after stepping down.
The 71-year-old, who first became Disney boss in 2006, faces an uphill challenge after a string of disappointing results helped the company’s stock fall 55% in the past 18 months.
Iger replaces outgoing CEO Bob Chapek, who came under fire over his apparent ambivalence towards the passing of Florida’s Parental Rights in Education Act, a piece of law which critics said prevented teachers from educating pupils on LGBT issues.
“You needed me to be a stronger ally in the fight for equal rights and I let you down. I am sorry,” Chapek told Disney employees.
Disney later said it supported efforts to strike down the legislation.
FTSE 100 falls on China fears, Brent crude at $87 a barrel
Monday 21 November 2022 09:55 , Graeme Evans
The FTSE 100 index has fallen 30.38 points to 7355.14 as investors react to China’s deteriorating Covid situation.
Outbreaks in major cities and the country’s first reported Covid deaths in six months have dashed recent hopes for an easing in China’s pandemic restrictions.
Brent crude slipped to below $87 a barrel and shares in resources stocks including Glencore and Anglo American were more than 2% lower. Asia-focused insurer Prudential also retreated 3% or 29p to 949.6p.
On the blue-chip risers board, B&M European Value Retail lifted 5.3p to 403.2p after Goldman Sachs gave the discount chain a “buy” rating and 490p target price.
In contrast, the US bank’s renewed caution on Boohoo shares left the AIM-listed fast fashion business 5% or 2.3p cheaper at 40.75p.
The FTSE 250 index declined 0.7% or 141.97 points to 19,141.08, with Molten Ventures the biggest faller after the tech investor reported a 12% drop in half-year portfolio value. Shares in the Cazoo and Trustpilot backer were 26p lighter at 424p.
Elsewhere, Pod Point slumped 16% as the car charging equipment specialist said growth had slowed markedly due to supply chain challenges impacting the delivery of new electric vehicles. It scaled back revenues expectations for this year and next, sending shares 12.15p lower to 64.05p.
FTX implosion doesn’t get in the way of Bank of England’s plans for a digital currency
Monday 21 November 2022 09:34 , Simon Hunt
The implosion of FTX has not deterred the Bank of England with proceeding with its plans to create a digital currency for the pound, Deputy Governor Jon Cunliffe said this morning.
He told an audience at Warwick Business School: “Over the past few days, I have had a few comments both to the effect that the collapse of FTX shows that we need to get on and issue a digitally native pound – and to the effect that FTX shows that we do not need do so.
“My initial reaction to both points of view was that there really was no connection between FTX and our work on a digitally native, general purpose form of Bank of England money, for use by households and businesses in making payments.
“Our work on a digitally native pound is driven by the trends we now see both specifically in payments, including the reducing role of cash, and more generally in the increasing digitalisation of daily life. “
FTSE 100 lower as miners fall, Virgin Money surges 15%
Monday 21 November 2022 08:45 , Graeme Evans
China’s deteriorating Covid situation has led to a risk averse session in London, with the FTSE 100 index down 38.66 points to 7346.86. Brent crude also weakened to $86.75 a barrel.
The fears of more lockdown disruption for the world’s second largest economy put pressure on mining stocks as Glencore and Anglo American fell more than 2%.
Compass led the fallers board, declining 4% or 76p to 1774.5p despite today’s strong full-year results.
B&M European Value Retail was one of the best performing blue-chip stocks after Goldman Sachs gave the discount chain a “buy” rating and 490p target price. Shares rose 5.2p to 403.1p.
The FTSE 250 index fell 84.86 points to 19,198.19 but Virgin Money surged 15% or 22p to 167.65p after its results included a move to extend its share buyback programme by another £50 million.
Virgin Money staff get 10% pay rise
Monday 21 November 2022 08:15 , Simon English
VIRGIN Money presented a surprisingly healthy picture of the UK economy today, with chief executive David Duffy insisting the future may not be as dark as City experts fear.
He also said 7500 staff will get a 10% pay rise this year and a one-off £1000 cost of living payment.
With a long recession now widely predicted, Virgin saw profits jump 43% to £595 million. It set aside just £52 million for bad debts, a low figure for this point in the economic cycle.
“We will undoubtedly see some of this (bad news) come through, it just may not be as bad as some fear,” he said. “Unemployment is very low. There are undoubtedly stresses, but we have just been through this with Covid.”
All banks have gotten more skilled at helping customers to manage themselves through tricky times. He said: “We have abilities to prevent bad outcomes.”
VM is spending £267 million on a mixture of share buybacks and dividends to reward shareholders.
Investors have seen the stock halve in the last five years as Duffy grappled with transforming the old Clydesdale Bank into the new Virgin Money.
The shares today moved up 14p to 160p.
Talk of a windfall tax on bank profits has grown lately.
Caterer Compass serves big jump in profits
Monday 21 November 2022 08:02 , Graeme Evans
Catering giant Compass has revealed an 87% jump in operating profits to £1.6 billion for the year to 30 September.
Chief executive Dominic Blakemore said the performance had surpassed expectations in terms of new business growth and recovery in volumes, with the Business & Industry division now generating revenues above pre-pandemic levels.
He said: “Our clients are continuing to face operational complexities and inflationary pressures, which are driving increased outsourcing, and we are successfully capitalising on the resulting growth opportunities.”
For 2023, the company has forecast underlying operating profit growth above 20%. This reflects expectations for revenue growth of around 15% and an operating margin above 6.5%.
The FTSE 100-listed company has more than doubled its annual dividend award to 31.5p a share.
Covid surge in China dents market progress
Monday 21 November 2022 07:37 , Graeme Evans
Asia stock markets have fallen after China reported its first Covid-related deaths in six months, sparking concerns that the country will reimpose strict curbs to deal with a rising number of cases.
The Hang Seng index fell 3% earlier today, having improved in recent weeks on hopes that China was closer to lifting its restrictions.
The FTSE 100 index stood at a two-month high on Friday after adding 1.6% over the week, but CMC Markets expects a fall of 12 points to 7373 at the start of today’s session.
Since the October lows, markets have rallied on the expectation that eventual interest rate hikes might not be as high as was thought a few weeks ago.
However, Federal Reserve policymakers dashed some of this momentum last week by suggesting that the eventual peak for US interest rates may still be above 5%.
