Temporarily out of use EasyJet aircraft at Gatwick Airport – Chris J Ratcliffe /Getty Images Europe
03:54 PM
Germany may need UK energy imports within years
Germany could be forced to import energy from Britain within years, according to new research, as the UK’s shift to green power takes off.
My colleague James Cook reports:
Energy generated from offshore wind farms could soon be exported to continental Europe as energy prices are forecast to rise, especially in Germany, according to S&P Global Platts.
The UK energy market is set to become “structurally longer, while the whole of western Europe is moving in another direction” said Sabrina Kernbichler, its European power analyst.
The UK imports about 7pc of its energy from the continent but that trend is set to be reversed as countries such as Germany shut down their coal and nuclear power plants.
03:34 PM
FTSE 100 closes down 0.5pc
The FTSE 100 has closed 0.5pc lower after a moderately poor session. IAG, owner of British Airways, was the biggest faller as the UK swapped Portugal onto its amber travel list – closing down 5.2pc. Mining companies also fell after strong gains earlier in the week.
03:17 PM
Norwegian media: Norway and UK have reached trade deal
Norway and Britain have reportedly reached an agreement on post-Brexit trade relations.
Norwegian state broadcaster NRK and news agency NTB both reported that an agreement has been reached, citing anonymous sources.
The countries have been using temporary trading arrangements since the start of the year.
Reports earlier this week said a deal had stalled over disagreements about access to Norwegian markets for British products.
A fishing deal between the two sides collapsed a few weeks ago, in an outcome that industry leaders said was disastrous.
03:05 PM
Russia to ditch dollar holdings from wealth fund
Joe Biden – Sergei Bobylev\TASS via Getty Images
Russia will ditch the US dollar from its National Wealth Fund amid threats of new Washington-led sanctions.
The $ 186bn fund will instead focus on assets including the euro, China’s yuan and – for the first time – gold.
Shifting away from dollar-linked assets will meanstructuring its liquid assets, which represent about two-thirds of its total holdings at roughly $ 119bn.
Russian finance minister Anton Siluanov said the move could take place “rather quickly, within a month”.
The Biden administration introduced a new wave of sanctions against Russia in April over Moscow’s alleged interference in the 2020 American presidential election, cyberattacks against US state and corporate networks, human right abuses and the continued occupation of Crimea. Russia has denied all the allegations.
02:44 PM
US service sector growth surges in May
Growth in the US services sector, where most Americans work, reached an all-time high in May, as people returned to bars, restaurants and other venues across the country.
Bloomberg has more details:
The Institute for Supply Management’s services index rose to 64 last month – the highest in data back to 1997 – from 62.7 in April, data showed Thursday. Readings above 50 signal growth, and the gauge exceeded the median projection in a Bloomberg survey of economists.
The figures underscore rising demand for a host of services like air travel, hotel stays and meals out as social activity picks up and pandemic restrictions ease. Pent-up consumer demand and steady business investment should provide plenty of juice for the recovery in the months ahead, but challenges remain.
Similar to the group’s manufacturing survey, the report showed elevated price pressures, growing order backlogs and softening in the pace of hiring. Limited availability of both materials and skilled workers risks tempering the pace of economic growth.
02:39 PM
Owners of Ever Given hit back at authorities’ claim captain was going too fast
People watch as the container ship ‘Ever Given’ is refloated, unblocking the Suez Canal on March 29, 2021 in Suez, Egypt – Mahmoud Khaled /Getty Images Europe
The war of words over the Ever Given, the giant ship which blocked the Suez Canal, has been ratcheted up with the vessel’s owners and insurers casting doubt on the waterway operators’ claims, reports Alan Tovey.
Insurer UK P&I Club issued a statement on Thursday expressing their “concern” about statements made by the Suez Canal Authority (SCA) after a court hearing in Egypt over the weekend about compensation for the incident.
In a press conference, the head of the SCA’s investigation committee El-Sayed Sheisha claimed the Ever Given’s captain was travelling too fast, causing the grounding.
He alleged the 200,000 tonne ship’s “black box” recorded speeds of up 22 knots, far above the 7.5 knot limit, and that the captain made a series of rapid demands as the situation became confused.
UK P&I Club hit back on Thursday. It said: “We are concerned by the allegations made by the SCA during the press conference and in the media against the ship and the master of Ever Given.
“The owners of the Ever Given and their insurers look forward to responding to these allegations within the Egyptian court proceedings.
“Critically it is important to clarify that whilst the master is ultimately responsible for the vessel, navigation in the canal transit within a convoy is controlled by the Suez Canal pilots and SCA vessel traffic management services. Such controls include the speed of the transit and the availability of escort tugs.”
02:25 PM
Apple wants staff back in offices by September
Apple has told employees they must return to their desks for at least three days a week by September, with most staff given the option to work remotely on Wednesdays and Fridays.
Teams that require “in-person” work will return for four or five days.
In an email sent to staff today, CEO Tim Cook said remote working was not able to replace in-person collaboration:
For all that we’ve been able to achieve while many of us have been separated, the truth is that there has been something essential missing from this past year: each other.
Video conference calling has narrowed the distance between us, to be sure, but there are things it simply cannot replicate.
I know I’m not alone in missing the hum of activity, the energy, creativity and collaboration of our in-person meetings and the sense of community we’ve all built.
Employees will also be able to apply to work remotely for up to two weeks a year, “to be closer to family and loved ones, find a change of scenery, manage unexpected travel, or a different reason all your own,” according to the email.
02:14 PM
Airline stocks plummet
02:09 PM
Travel stocks slide as Portugal axed from quarantine-free green list
Travel stocks dropped this afternoon, following news that Portugal would be removed from the UK’s green list of countries that people could visit without quarantining on return.
British Airways owner IAG fell 5.62pc, EasyJet dropped 5.77pc and Wizz Air was down 2.89pc.
My colleague Charles Hymas writes:
Ministers are understood to have decided on Thursday morning to add Portugal to the amber list from next Tuesday at 4am after tests revealed what are believed to be previously-unknown variants of Covid. It will mean anyone returning from Portugal after then will have to quarantine for 10 days and take at least two PCR tests.
Sources said ministers had decided that with just weeks to go to the lifting of the final Covid restrictions on June 21, they should “not do anything that jeopardises further unlocking at this point.”
No countries will be added to the green list, dashing frontrunner Malta’s hopes of opening its holiday market to Britons.
Read his full story here.
01:57 PM
Nasdaq extends losses
Nasdaq
The Nasdaq’s losses are deepening after that opening. It is now 1.45pc down, with the S&P 500 losing 0.91pc and the Dow down 0.72pc.
Markets look to be retreating quickly from their position earlier this week, when global stocks hit a new record high.
The drop comes despite US jobless claims falling below 400,000 for the first time during the pandemic this past week, as hiring accelerates.
However, traders may be rattled by the strong economic data, fearing it suggests the spectre of rising inflation could tempt central banks to withdraw stimulus and hike interest rates.
“Equity markets have taken signs that inflation is on the rise in their stride recently, and we suspect that they will continue to do so for some time yet,” Oliver Jones of Capital Economics said in a commentary.
01:41 PM
Wall Street shares sink
US markets have tumbled at the open, with the tech-heavy Nasdaq losing 1pc to join the global selloff that is firmly underway.
The Dow lost 0.6pc after the opening bell and the S&P 500 around 0.7pc as the FTSE trimmed daily losses to 0.8pc by 2.30pm. Europe was also in the red.
It came as investors weighed data indicating a pick up in jobs growth for cues on the trajectory of an economic recovery and inflation ahead of key service sector data
ISM’s survey on the service sector, which accounts for two-thirds of the U.S. economy, will be released after markets open.
“The investor consensus is that inflation will be more transient in the near term but the probability of inflation moving above targets next year is increasing and there is an unusual degree of uncertainty among investors regarding the inflation outlook,” said Jon Adams, senior investment strategist, BMO Global Asset Management in Chicago.
“The US economy will continue to rebound and that might lead to some inflation worries in the long-term; but we remain largely constructive on the near to medium term inflation outlook.”
Memestock AMC has dropped as the US markets opened this afternoon, tumbling over 8pc minutes into trading. The cinema chain’s stock has become a favourite among Reddit traders who are piling cash into shares targeted by short-sellers.
This afternoon’s plunge doesn’t do much to dent AMC’s rise this year, though, as the chart below shows:
01:15 PM
More on global food prices
Global food prices have rocketed to their highest level since the 2011-12 crisis, threatening to push up supermarket bills and add to building inflation pressures, reports Tom Rees.
Economists warned food markets are at a “crossroads” after the UN’s Food Price Index saw the biggest month-on-month surge in more than a decade.
The index jumped 5pc to 127.1 points in May, levels last seen in the previous food price crisis, as costs for oils, cereals and sugar rose.
Higher food costs are adding to growing inflation jitters as global prices for raw materials rise and shortages bite. A combination of factors are sending food costs surging, including a weak dollar, buoyant Chinese demand, dry weather and higher shipping costs.
The UN said overall food prices are now only 7.6pc below their all-time high in nominal terms when the index hit 137.6 points in 2011.
“We are at the crossroads so it could go one way or the other,” said Abdolreza Abbassian, economist at the UN’s Food and Agriculture Organization.
He warned of the risk that one of the factors pushing up prices, such as Covid and China’s “unexpected shopping spree”, could “really stir up prices and price volatility to the same level we had before if not worse”.
However, he said the combination of factors that sparked the 2011-12 food price crisis are currently not present. That crisis led to protests across developing countries and was a key factor in the Arab Spring.
Food price inflation in the UK is relatively flat currently but could begin to rise after the recent surge across commodity markets.
It typically takes between seven and 12 months for prices in global markets to hit the supermarket shelves, according to the British Retail Consortium. Prices have already been rising steadily for some time, meaning consumers may soon start to notice the difference in their weekly shops.
12:55 PM
US jobless claims drop to another pandemic low
Applications for US unemployment benefits fell below 400,000 for the first time during the pandemic, as hiring accelerates.
Initial claims in regular state programs decreased by 20,000 to 385,000 in the week ending May 29, US Labor Department data showed today.
The median estimate in a Bloomberg survey of economists called for 387,000 applications. The prior week’s reading was revised down to 405,000.
The numbers come ahead of Friday’s Labor Department employment report, which is expected to show the economy added 655,00 jobs in May.
12:33 PM
Flagship HS2 station under threat as Sadiq Khan shelves vital upgrades
The viability of London’s flagship HS2 station is at risk after Boris Johnson refused to give Sadiq Khan a long-term bailout for the capital’s transport authority, reports Oliver Gill.
He writes:
Transport for London, chaired by London mayor, risks being forced to mothball a series of public transport upgrades after TfL was only given a six-month grant to keep it afloat.
Mr Khan said earlier this week the bailout was “not the deal we wanted”.
One project at risk is the West London Orbital railway that connects a £1.7bn HS2 rail interchange at Old Oak Common with the rest of the capital.
Read the full story here.
12:20 PM
Bosses at lithium miner Bacanora brace for clash with shareholders after Chinese takeover deadline extended
Bacanora’s management are braced for a showdown with small investors fighting a potential takeover of the lithium miner after the deadline for a firm bid was extended by a month, reports Alan Tovey.
Chinese lithium giant Ganfeng last month floated the possibility of a £190m bid of Aim-listed Bacanora, which is developing the Sonara mine in Mexico.
Sonora is one of the world’s largest deposits of lithium, a metal essential for batteries needed in electric vehicles.
The board of Bacanora said they “would expect to recommend” the non-binding 67.5p-a-share approach, a premium of more than 50pc.
But a group of retail investors in Bacanora, who number more than 400 and claim to hold a combined 6pc stake, have labelled the offer “derisory”.
Calling themselves “BIG” – “Bacanora Investors Group” – they are using social media and internet message boards to mount a grassroots campaign to dismiss the offer or get it lifted to what they see as a realistic price.
They believe Bacanora is worth as much as seven times the price being mooted because of Sonora’s potential.
12:05 PM
Mullins seeks buyer for Pimlico Plumbers
Pimlico Plumbers chief executive Charlie Mullins – Victoria Jones /PA
British businessman, Charlie Mullins, is searching for a buyer for his company Pimlico Plumbers.
The eccentric 68-year-old, who has courted controversy with his comments about vaccines and working from home, has hired Cavendish Corporate Finance LLP to advise on the potential sale of Pimlico Group, according to Bloomberg.
A deal could reportedly value the business at about £100m ($ 142m).
“We are always looking out for investment,” Mullins said in a statement. “We are a growing company and want to expand both within London and further afield.”
My colleague Alan Tovey has more on this story here.
11:49 AM
Frenzied AMC rally captivates Wall Street
Cinema chain and memestock AMC erased its premarket rally and dropped after the company said it plans to sell up to 11.55m of its common stock to repay debt and finance future acquisitions.
Its shares dropped 15pc to $ 53.02 after climbing as much as 24pc before the announcement.
Thursday’s filing for potential sale follows AMC’s sale of 8.5m shares to Mudrick Capital for $ 230.5m two days ago.
Those shares were immediately flipped and sold for a profit as the New York-based investment firm told clients AMC’s stock was overvalued.
11:39 AM
Money round-up
Here’s a round up of today’s articles from The Telegraph’s Money team:
Sign up for the weekly Money newsletter here.
11:25 AM
Government ‘open minded’ about extending furlough, says Gove
The government is “open-minded” about extending its pandemic furlough support program, Cabinet Office minister Michael Gove said today, ahead of a meeting with Nicola Sturgeon, who wants the wage support policy to run beyond its current September expiry date.
“We are open-minded, yes,” Gove told BBC Scotland radio, when asked about the program. “Extra funding for everyone will continue, and it is important we all learn from each other about how that money should be spent.”
Earlier today, the Office for National Statistics said the proportion of the UK workforce on furlough leave has fallen to 8pc in mid-May 2021, which means approximately 2m people still receive support from the program.
11:21 AM
FTSE down 1pc
The FTSE 100 has fallen further today, currently down 1pc at 7,037 points. National Grid, B&M and British Airways owner IAG weighed heavy on the index, all down more than 4pc.
At midday, the pound was $ 1.4185 compared to $ 1.4175 at the previous close.
“It all just feels a bit deflated right now,” IG analyst Chris Beauchamp told AFP. “The week has been almost empty of news and so we have seen a bit of a momentum escape from markets.”
11:15 AM
Global food prices surge to near decade high, says UN
A shopper hands out a banknote at a vegetable stall at Kebayoran Lama market in Jakarta, Indonesia – Dimas Ardian /Bloomberg
A gauge of global food prices in May climbed for a 12th consecutive month, marking the longest stretch in a decade.
A United Nations index is currently at its highest since September 2011, with last month’s gain of 4.8pc the biggest in more than 10 years.
All five components of the index rose during the month, with the advance led by pricier vegetable oils, grain and sugar.
Rising prices are already trickling through to store shelves, with a wide range of countries including Kenya and Mexico reporting higher food costs.
The on-going advance risks accelerating broader inflation and complicating central banks efforts to provide more stimulus.
“We have very little room for any production shock. We have very little room for any unexpected surge in demand in any country,” Abdolreza Abbassian, senior economist at the UN’s Food and Agriculture Organization, told Bloomberg.
“Any of those things could push prices up further than they are now, and then we could start getting worried.”
10:59 AM
Rail journeys fall to lowest annual levels since 1872
Rail passenger journeys fell to their lowest since 1872, according to statistics published by the Office of Rail and Road.
Nationally, 388 million journeys were made between April 2020 and March 2021, equating to only 22pc of the 1,739m made in the previous twelve months.
The Heathrow Express service, which continued to operate through last year, recorded the lowest usage, at just 4.7pc compared to last year.
Estimates published by the Department for Transport show that total rail usage was at 45pc of pre pandemic levels by the end of May 2021.
10:44 AM
Hong Kong parking space sells for over $ 1m
A man looks out from a window in a commercial building in Hong Kong – ISAAC LAWRENCE /AFP
By Morgan Meaker Hong Kong’s property market has broken a new record, after a parking space in the territory was sold for HK$ 10.2m (£916,000).
The parking space was located at the luxury Mount Nicholson residential project, home to Hong Kong’s super rich and one of the island’s priciest addresses.
The project is located on a hill overlooking the city known as “The Peak”. In May, a five bedroom house here was rented for a record HK$ 1.6m (£145,794) a month.
The parking space sale was carried out by developers Wharf Holdings and Nan Fung Group. A Wharf representative declined to provide further details.
The Mount Nicholson plot however soared above the previous parking bay price record, when a 135-square-foot spot in front of an office tower was snapped up for HK$ 7.6m (£692,521) in 2019.
Exorbitant parking space prices have long been considered a symbol of Hong Kong’s wider property market – the world’s most expensive pre-pandemic, according to real estate firm CBRE.
Despite concerns that the pandemic, political uncertainty and the UK’s decision to offer Hong Kongers holding British National Overseas passports would knock billions off property valuations, the market has proved resilient with average home prices just 2pc shy of historical highs.
In February, a five bedroom apartment at the luxury 21 Borrett Road project became Asia’s most expensive apartment when it was sold by developer CK Asset Holdings for HK$ 459m (£41.6m).
The price for the five-bedroom apartment translates to HK$ 136,000 (£12,392) per square foot.
Geography partly explains the territory’s high prices. Hong Kong is a dense city with limited space. More than 7m residents live in just 427 sq miles.
The territory has also experienced a surge in investment from Chinese mainlanders looking for a safe place to park their money.
10:36 AM
Jet2 announces loan and bond offering as travel uncertainty drags
Passengers queue up at the Jet2 check-in desk at Palma de Mallorca airport on July 30, 2020 in Mallorca, Spain – Clara Margais /Getty Images Europe
Airliner Jet2 has signed a new £150m loan agreement and is launching a bond offering of guaranteed senior unsecured unrated convertible bonds worth £387.4m in an attempt to reinforce its finances amid on-going pandemic uncertainty.
Jet2 boss Stephen Heady last month criticised the UK for not making the most of its successful Covid-19 vaccine roll out.
He said:
Travel has been made safe and the UK Government isn’t taking any recognition of the fact that 60pc of the population have had one vaccine, 25pc of the population have had two vaccines, hundreds of thousands have had the virus and built up antibodies. There has been no recognition of that at all.
10:20 AM
Oil trades near 2018 high
Oil is trading near its highest since October 2018, as an industry report pointing to a decline in US crude inventories reinforced optimism over the demand recovery.
Bloomberg has more details:
Futures in New York pared earlier gains. The American Petroleum Institute reported stockpiles fell by 5.36 million barrels last week, said people familiar. That would be the biggest draw in a month if confirmed by official data.
So far this week, crude has undergone a stellar rally as optimism around rising fuel demand is growing, particularly in the west.
The U.S., China and Europe are rebounding strongly from the pandemic, and upbeat comments from OPEC+ and the International Energy Agency added to the positive outlook.
The Covid-19 comeback across Asia and Latin America, however, is a reminder that the recovery is likely to be uneven and bumpy.
Nuclear talks between Iran and world powers, meanwhile, have been adjourned until next week as differences between Tehran and the U.S. delay the revival of a deal.
The prospect of returning Iranian barrels is setting up a possible battle to supply the South Korean market with condensates.
10:03 AM
Nordgold confirms London IPO
Russian billionaire Alexey Mordashov – Simon Dawson /Bloomberg
Russian gold miner Nordgold confirmed plans today to float in London, as the company reaps the benefits of rising gold prices which reached five-month highs this week.
“Following a record year in 2020, and with a low cost, low risk development pipeline centred on the highly prospective Gross Region in Russia, now is the right time for Nordgold to seek a premium London listing,” chief executive Nikolai Zelenski said.
Nordgold is plotting a free float of at least 25pc at the same time as listing in Moscow, the group added.
The company is controlled by the family of Russian billionaire Alexey Mordashov and has operations in West Africa, Kazakhstan and Russia.
09:47 AM
UK fuel demand returns to pre-pandemic levels
UK demand for road fuel – mainly petrol and diesel – has returned to pre-pandemic levels, the Department for Business, Energy and Industrial Strategy said today.
Fuel consumption dropped sharply in March 2020 as the UK government announced tight restrictions on movement. But at the end of May, demand has returned to above 20,000 litres, the highest level since February 2020.
09:33 AM
Arts among the industries with the most furloughed workers
09:20 AM
More on the UK Services PMI
Tim Moore, economics director at IHS Markit, comments:
Pressure on business capacity due to a spike in demand and staff hiring difficulties emerged as a major challenge for service sector companies in May.
Job creation was the strongest for over six years, but backlogs of work accumulated to the greatest extent since the summer of 2014.The successful vaccine roll out has generated a strong willingness to spend and fortified business optimism across the service economy.
However, inflationary trends intensified in May as suppliers passed on higher transport bills, staff costs and raw material prices.
Imbalanced demand and supply appears to have spread beyond the manufacturing sector, which contributed to the steepest rise in prices charged by service providers since the survey began in July 1996.
08:51 AM
UK Services PMI: biggest jump in activity in 24 years
Britain’s services sector recorded the biggest jump in activity in 24 years last month,as new data shows the country is experiencing a rapid rebound as the economy reopens.
The IHS Markit/CIPS Purchasing Managers’ Index rose to 62.9 in May from 61.0 in April – its highest since May 1997 and above an initial estimate of 61.8.
“The latest survey results set the scene for an eye-popping rate of UK GDP growth in the second quarter of 2021, led by the reopening of customer-facing parts of the economy after winter lockdowns,” IHS Markit’s economics director, Tim Moore, said.
The composite PMI, which includes previously released manufacturing data, rose to its highest since the series began in January 1998 at 62.9, up from April’s reading of 60.7.
Earlier this week the Organisation for Economic Cooperation and Development forecast Britain would see the fastest growth of any major economy this year.
But the scale of Britain’s economic slump last year – the biggest in over 300 years – means it will take longer than the United States, Germany or Japan for output to return to pre-crisis levels.
08:44 AM
Furloughed workers falls to lowest this year
The proportion of the UK workforce on furlough leave has fallen to 8pc in mid-May 2021, the lowest level this year, according to the ONS.
That number is much lower than the 19.9pc on furlough in late January, as the lifting of restrictions prompt businesses to call their workers back.
The 8.1pc of businesses’ workforce on furlough leave equates to around 2.1m people.
The arts, entertainment, recreation and other service activities were the industries that continued to use the furlough scheme the most, with a quarter of the workforce still on furlough.
08:29 AM
UK seeks removal of Scotch whisky tariff in Australia trade deal
Liz Truss, the International Trade Secretary – Geoff Pugh /Telegraph
Britain is seeking to remove a 5pc tariff on exports of Scotch whisky to Australia in an upcoming trade deal, according to trade minister Liz Truss.
She said:
A UK-Australia trade agreement would be significant for Scotch whisky and the Union.
I am fighting hard to get these tariffs cut and secure a deal that benefits producers in Scotland and helps the whole of the UK.
08:25 AM
Expert reaction: FTSE down 0.7pc
AJ Bell financial analyst Danni Hewson comments:
The period earlier in the year when so-called ‘meme’ stocks were soaring wasn’t necessarily the happiest time for the markets overall and it’s notable that after shares in US cinema chain AMC Entertainment soared to a record high overnight the FTSE 100 fell out of bed on Thursday morning.
National Grid shares trading without the rights to the dividend accounted for some of the weakness but nervousness over inflation may be creeping up too ahead of tomorrow’s key US jobs report.
There are still so many factors for investors to weigh, such as whether the economy will overheat or whether new Covid variants could prompt a further economic downturn.
There is also an element of having to second guess how central banks and governments will respond to the rapidly shifting backdrop.
All of this uncertainty is making it tricky for the markets to make concerted progress as we move towards the halfway point of 2021.
08:22 AM
More bad news for the travel industry
Boris Johnson has warned that the Government “will not hesitate” to axe countries from the green list for travel amid growing concern that Portugal could be removed, reports Charles Hymas.
He writes:
Ministers and their medical advisers will meet on Thursday to decide whether Portugal should be dropped from the green list and instead rated amber, requiring holidaymakers to quarantine for 10 days on their return and pay for two PCR tests.
Scientists from the Joint Biosecurity Centre (JBC) are concerned about rising infection rates and the emergence of variants in Portugal, which was the first of 12 countries and territories to be rated green just three weeks ago.
Read the full story here.
Facing rising uncertainty, travel stocks slipped this morning. British Airways owner IAG fell 2.53pc, RyanAir dropped 1.37pc and EasyJet is currently down 2.5pc.
08:11 AM
Easyjet cancellations prompt shares to slide
Easyjet shares are trailing in the FTSE 250, down by 3.39pc after a series of cancellations sparked a wave of complaints among holidaymakers.
The company said in response:
We want to fly as many customers on as many flights as possible this summer, however as all airlines have been doing throughout the pandemic, we continue to adjust our flying schedule based on the restrictions put in place by Governments to ensure our flying programme best matches demand.
07:49 AM
B&M and National Grid weigh on FTSE
London’s FTSE 100 continued to drop this morning, with B&M and National Grid weighing on the index.
The blue-chip was down 0.6pc after B&M warned investors to expect a post-Covid drop i revenue, pushingthe stock down 2.6pc. Grid operator National Grid dropped 4.5pc as it traded ex-dividend.
The domestically focused mid-cap FTSE 250 index also slipped 0.2pc, easing from a record high scaled in the previous session.
07:30 AM
FTSE opens down
The FTSE 100 index fell 0.3pc to 7,085.04 points compared with Wednesday’s close, echoing a decline in other European equities as investors wait for key US economic data tomorrow which could contain clues about inflation.
In the eurozone, Frankfurt’s DAX 30 index also lost 0.2pc to 15,576.34 points while the Paris CAC 40 was flat at 6,521.60.
“Markets are treading water ahead of more economic data points which will further inform the inflation debate,” analyst Richard Hunter at trading site Interactive Investor told AFP.
“One of the drivers of market jitters around inflationary pressures has been bottlenecks in the labour market, and over the next two days the jobless claims number and the non-farm payrolls reading will provide new evidence on the state of the nation.”
07:27 AM
Workspace slumps to £235m annual loss after occupancy fell 12pc
Office-space group Workspace has posted its first annual loss in more than a decade today, as work from home restrictions caused rental income to fall 33pc and the loss of 10pc of customers.
The decline in income created a pre-tax loss of £235.7m in the year to 31 March, a sharp turnaround from the previous year’s £72.5m profit.
Occupancy fell 11.7pc to 81.6pc and the company gave £19.9m of rent discounts to customers
Graham Clemett, chief executive, said:
The past year has been one of the most challenging in Workspace’s history; with London effectively closed for much of it. This is borne out in our results, which reflect the impact of the pandemic on our customers.
On a more positive note, we have seen new customer demand pick up materially and footfall in our centres improve as Government restrictions have eased, confirming the appeal of our distinctive buildings and flexible offer.
… The role of the office in our working lives is being re-examined and all the signs highlight flexibility, quality and wellbeing becoming more important for businesses and their people.
We are perfectly positioned to benefit from this accelerated shift in attitudes by offering businesses a home they can grow in, without having to compromise their unique identity in a furnished or serviced office, or put up with the constraints of more traditionally leased offices.
07:09 AM
Foxtons sales revenue rises
A branch of Foxtons in London – John Stillwell /PA
Estate agent Foxtons said today it expects profit for the first half of the year to be significantly ahead of both 2020 and 2019.
The company’s sales revenue was boosted 49pc in the first three months of the year versus both 2020 and 2019, as house prices surged, stamp duty was lifted and people invested in more space as they spent more time at home.
Foxtons said the sales commission pipeline had continued to grow and is now 65pc ahead of last year and 17pc up on January 2021.
The company also acquired competitor Douglas & Gordon Estate Agents in March, it’s biggest acquisition to date.
06:46 AM
Pennon buys Bristol Water for £814m as annual profits sink
Utilities giant Pennon has bought its smaller peer Bristol Water for £814m, consolidating its position as the south-west’s largest water company.
The price includes Bristol Water’s £389m debts, giving the sale an equity value of £425m.
Pennon also announced that it would return nearly £2bn to shareholders through a special dividend and a programme to buy back its own shares.
The company’s profit sank to £157m, down from £183 the year before – a figure Pennon said was in line with expectations.
“We see attractive opportunities to continue to invest in the Bristol Water business to deliver enhanced resilience and water security to benefit customers in Bristol and beyond,” said chief executive Susan Davy.
06:26 AM
B&M profits double but warns of post-Covid drop in revenue
B&M revealed this morning that its pre-tax profit more than doubled to £525.4m in the past year but warned investors to expect a drop in revenue in its current financial year after a stellar performance during Covid-19.
The retailer said it was already seeing signs of a slowdown compared to the frenzy a year ago and since the financial year ended in late March, sales have been 1pc lower than this time last year.
The retailer added 38 UK shops to its portfolio of 681 stores despite the pandemic and the business is also budgeting to open another 45 new shops in the following year.
Revenue jumped nearly 26pc in the 12 months to March, while the business said that it had also created 7,200 new jobs in the UK over the year.
06:17 AM
FTSE to rise as AMC surges
Good morning. The FTSE 100 is expected to open around 16 points higher this morning, after closing up 0.4pc yesterday. Global equities are still hovering at record levels after rallying away from pandemic lows, as traders wrestle with inflation risks and the reemergence of frenzied memestock trading.
The US cinema chain AMC Entertainment Holdings continued its revival yesterday. Retail investors showed little interest in withdrawing profits despite a two-day gain of 139pc that pushed shares to a record high. The AMC frenzy is reminiscent of GameStop’s 1,642pc surge over 11 sessions. However AMC’s market value hit $ 31bn yesterday, overtaking GameStop’s $ 21bn.
5 things to start your day
1) Amazon to overtake Tesco as Britain’s biggest retailer by 2025: Amazon is poised to snatch Tesco’s crown as Britain’s biggest retailer within four years in a watershed moment for the beleaguered high street.
2) Cinema chain AMC’s shares rise 100pc after it offers free popcorn to investors: The promise of free popcorn for investors helped shares in US cinema chain AMC to more than double on Wednesday.
3) Restaurants take lunch off the menu as staff shortages bite: The combined GDP of the expanded trade pact would rival that of the European Union, according to Japan.
4) Biden ramps up tax deal pressure with trade tariffs on Britain: President Joe Biden has ramped up pressure on Britain to back a global deal on taxes.
5) Time to let travellers take some risks, says Wizz Air chief: Ministers must allow travellers to “take some risks”, according to the boss of Wizz Air.
What happened overnight
Most Asian stocks climbed on Thursday and US equity contracts were steady, weathering the latest twist in US-China ties as well as Federal Reserve comments on a potential reduction in stimulus.
Optimism over a vaccine rollout boosted Japanese equities, while China edged up and Hong Kong retreated.
Japan’s Topix index increased 0.7pc. Australia’s S&P/ASX 200 index was up 0.4pc. South Korea’s Kospi index rose 0.9pc. Hong Kong’s Hang Seng index shed 0.4pc and China’s Shanghai Composite gauge rose 0.4pc.
Coming up today
-
Corporate: Workspace, Pennon Group, B&M European Value Retail, Discoverie Group, NewRiver REIT, Braemar Shipping (full-year results), Chemring (interims)
-
Economics: Service PMIs (Asia, EU, UK, US); weekly oil inventory data, weekly unemployment claims (US)