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Coal wobbles drag on blue-chip
The COP26 agreement to start “phasing down” the use of coal cast a pall over the miner-heavy FTSE 100 from which it only just clawed its way out.
The blue-chip index managed to close the day out up 3.95 points, or a measly 0.05%, at 7351.86.
Russia-focused steel miner Evraz was down 16.8p at 603.2p; BHP fell 37.4p to 1923.4p; Antofagasta went down 28p at 1,460p and Anglo American down 41p at 2,850p.
By comparison, the French Cac closed up 0.53% and the German Dax was up 0.34%.
The market also felt a chill after Bank of England Governor Andrew Bailey told MPs he was “very uneasy about the inflation situation”, leading to speculation that a rates rise will come in December.
Royal Dutch Shell’s bombshell decision to ditch the Dutch and make London its corporate home lightened the mood: its A shares closed up 35.2p at 1,676.4p and its B shares up 23.8p at 1,680.8p.
Outsourcer Serco said contracts running the Government’s Covid-19 test-and-trace system have helped the firm surpass revenue and profit targets. Shares closed up 3.2p at 134p.
Shares in the company, led by Conservative peer Lord Peter Cruddas, closed up 16.5p at 275.5p.
The biggest risers on the FTSE 100 were Avast up 39.4p at 598.2p; London Stock Exchange Group up 228p at 7,166p; Standard Chartered up 12.9p at 474.5p; Royal Mail up 12p at 445.7p and Johnson Matthey up 55p at 2,328p.
The biggest fallers were Aveva down 94p at 3,265p; Evraz down 16.8p at 603.2p; B&M down 14.4p at 585p; Darktrace down 13.5p at 568.5p and Rentokil down 12.6p at 623.6p.
That’s a wrap from us for the day. Come back here from 7am tomorrow when unemployment figures will set the mood.
Bain Capital defends LV= deal
Bain Capital today sweetened its offer for LV= as the private equity company fights to win approval for the controversial deal.
Bain shared fresh details of the proposed takeover and pledged not to saddle the insurer with debts.
The private equity giant said it will invest £264 million to safeguard the pensions of more than 10,000 policy- holders and staff. Bain had previously committed to investing £168 million to fund pension liabilities.
Bain promised to invest £160 million in LV=’s IT infrastructure, the first public pledge on tech. And the investment company said no new debt would be added to LV=’s balance sheet as part of the takeover. LV= will look to reduce its debt pile as soon as possible under Bain’s ownership.
The defence comes as Bain’s takeover of LV= faces mounting opposition from politicians, mutual members and the press.
McLaren denies rumoured sale
McLaren has denied reports it has been sold to Audi. Autocar reported that the Formula 1 car maker had been sold.
McLaren said in a statement: “McLaren Group is aware of a news media report stating it has been sold to Audi. This is wholly inaccurate and McLaren is seeking to have the story removed.
“McLaren’s technology strategy has always involved ongoing discussions and collaboration with relevant partners and suppliers, including other carmakers, however, there has been no change in the ownership structure of the McLaren Group.”
FTSE slightly lower in lunchtime trade
The FTSE 100 is down 9.2 points at 7338 at 1.20pm London time.
Cyber security firm Avast is top of the index, up over 7% after updating the market on the progress of its takeover by NortonLifeLock. The deal has cleared a key regulatory hurdle in the US.
B&M Value retail is at the bottom of the FTSE 100 index, down 4.6%. The company said this morning it plans to raise £250 million in new debt to help pay for general business expenses and costs.
Miners are also still under pressure: Glencore is down 2% after the global COP26 statement on “phasing down” coal and Evraz is also 2% lower.
Deutsche Bank says UK inflation set to spike
Deutsche Bank’s chief UK economist Sanjay Raja is out with a new note today predicting a spike in inflation.
“After September inflation cooled a little, coming in below expectations, we expect to see a big jump in the October inflation report,” Raja writes.
“We see headline CPI jumping to 4% y-o-y, a near decade high, a tenth above consensus and the Bank of England’s (BoE) projection. Core CPI is expected to shift up to 3.2% y-o-y. On RPI, our models point to a 5.7% y-o-y print.
“Overall, the bulk of price pressures will come from a rise in energy prices, as the Ofgem price cap bumps up. Unwinding VAT cuts should also push up services inflation. Risks to our October projections are tilted slightly to the downside.”
The next inflation reading from the Office for National Statistics comes on Wednesday.
AIM-listed bar chain owner Nightcap hails cheaper rents on sites as it pursues expansion
Bar owner Nightcap, behind new sites in the capital including a fresh London Cocktail Club in the heart of the City, today gave an upbeat update to investors in its first annual report.
The AIM-listed chain, which operates premium bars across London, Bristol and Birmingham, recently took over the Adventure Bar Group.
Nightcap today said many of its venues have posted record sales weeks since reopening, and chairman Gareth Edwards said a “silver lining” to the pandemic’s impact has been greater availability of prime sites for the chain to explore.
He said Covid has “had the effect of introducing a degree of reality to the rents being sought by landlords, resulting in sites with lower rents being offered”.
Edwards said this situation provides “an undeniable opportunity for an operator like Nightcap, which is undertaking a “buy-and-build” strategy”.
The chain’s co-founder and former Dragon’s Den star, Sarah Willingham, said: “We are acquiring fundamentally strong businesses that have been weakened by the impact of the pandemic.”
She added: “Most of our sites have posted record sales weeks and our teams have worked tirelessly to meet the demand from customers.”
Shares rose 0.2% this morning.
Heavy metal takes a hit as markets eye inflation
MARKETS were choppy today as the City nervously eyed inflation figures from the Bank of England due on Wednesday.
By consensus inflation will come in at above 3%, but how much higher? The Bank expects it will rise above 5% in the next few months; some investors think the Bank is behind the curve and that its decision to hold rates last week was a mistake.
Mining shares, seen as a hedge against inflation, took a hit today. Glencore lost 7p to 361p, Evraz tumbled 8p to 611p and Antofagasta lost 20p to 1470p.
Only nice bumps for both classes of Shell stock and Royal Mail kept the FTSE 100 from a hard fall and then only just. The main index was down 2.54 at 7344.07.
Lord Cruddas could do the splits at CMC
CMC Markets could split itself into two under plans being considered by founder and chief executive Peter Cruddas, the Tory peer.
Lord Cruddas is in “very early stage” talks on breaking the trading house into a spread-betting arm and a non-leveraged business that would contain the stockbroking arm and other new investment platforms.
Cineworld’s UK sales pass pre-pandemic levels thanks to Bond and Dune
Cinema has had a turbulent year but James Bond has indeed come to the rescue of one of the sector’s biggest chains.
Ticket sales for Daniel Craig’s final outing as 007 have boomed since its release in late September, and studios have finally begun to release long-awaited films as vaccine rollouts speed up around the world.
Other major releases turbo-charging operators’ revenues over the past month include Denis Villeneuve’s long-awaited Dune and Marvel movie Venom.
Shares are up 4p or 6.5% at 66.7p.
Sir Martin Sorrell’s S4 Capital strikes 11th deal so far this year
Sir Martin Sorrell’s new digital agency S4 Capital has struck its 11th deal in as many months as it continues to expand rapidly.
S4 capital’s main subsidiary Media.Monks is merging with Italian firm Miyagi, a content marketing company that works with the likes of Red Bull, Campari, and Danone.
Sorrel said the deal would give S4 an “even stronger” presence in Italy, Europe’s fourth largest advertising market. Miyagi, founded in 2013, employs 70 people.
Separately, S4 today named former Just Eat finance boss Mary Basterfield as its new CFO. Basterfield, who left Just Eat last September, will replace Peter Rademaker from January. Rademaker has been CFO for three years but plans to retire from day-to-day duties.
Shares in S4 dipped 10p or 1.5% to 663p.
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