The FTSE has fully recovered from the discovery of the omicron variant, rising again as mining stocks got a boost from a Chinese plan for more economic stimulus.
The blue-chip index climbed 1.5pc to close at 7,339 – edging above the 7,310 points it printed on Nov 24 before it plunged as the omicron variant of Covid was identified in South Africa.
Miners such as Glencore, Anglo-American and BHP led the FTSE as copper imports to China hit their highest level since March and iron ore imports hit an 18-month high.
Power shortages curbing the Chinese economy are easing, while Beijing also pledged to bolster its economy by cutting the amount of cash banks need to hold in reserve, releasing 1.2 trillion yuan (£142bn).
Positive comments from pharma giant GSK and Dr Anthony Fauci, the top US pandemic adviser, added to the cheer on the market.
GSK reported its antibody-based Covid-19 treatment is effective against all mutations of the new variant, while Dr Fauci said early indications on omicron suggested it could be milder than other strains.
The FTSE’s rise was reflected on markets elsewhere, with the Nasdaq index surging 3pc and the S&P 500 almost back to pre-omicron levels.
“This morning’s rally is being fueled by the belief that the omicron variant will not create many problems for the global economy and that China has pledged measures to support economic growth,” wrote Matt Maley, chief market strategist for Miller Tabak + Co, the US investment adviser.
06:51 PM
Wrapping up
It’s time to close the blog, thank you all for following! Here are some of our latest stories:
06:50 PM
BP snaps up EV charging group Amply Power
BP has agreed to acquire Amply Power, a provider of electric-vehicle charging services, in an expansion of its e-mobility US operations.
European oil majors have centred their energy transition plans around electrification. Both BP and Shell have bet on a growing take up of electric vehicles by investing in charging networks in the UK and Germany.
By 2030, BP aims to nearly double profits from its global convenience and mobility businesses from around $5bn in 2019.
The FTSE 100 energy group looks to grow its global network of EV charging points from around 11,000 today to more than 70,000.
06:29 PM
Volkswagen shares surge as billionaire owners made move towards Porsche spinoff
Volkswagen shares rose after a report suggested that the controlling families of the company made moves towards spinning off its luxury brand Porsche. My colleague Howard Mustoe has more:
The Porsche family controls Volkswagen, and thus the Porsche brand, through a series of holding companies. It owns half of shares and all the voting power of Porsche SE, which owns almost a third of the shares and about 53pc of the voting stake of Volkswagen AG, which in turn owns all of Porsche AG the carmaker.
The family could sell a share in VW to invest in a possibly separate Porsche AG car maker, according to Handelsblatt.
VW as a group is worth about €115bn, while Porsche alone could be worth €80-105bn, according to analysis by Bloomberg Intelligence. That would still leave VW with its eponymous brand, Audi, Bentley, Bugatti, Seat, Skoda and Lamborghini, as well as bike brand Ducati and truck makers Scania and MAN.
The plan would allow the family to maintain control while raising billions of euros to help finance its challenge to Tesla. VW shares rose 8.6pc while the family’s investment company Porsche SE 8.4pc. The deal is at an early stage.
06:08 PM
Wall Street also on the rise with Nasdaq rallying 3pc
Looking over at the other side of the Atlantic, Wall Street’s main indexes were also rallying strongly.
The tech-laden Nasdaq surged 3pc after reviving the interest of investors, while Intel jumped 4.5pc after plans to float its self-driving car unit in a $50bn (£38bn) initial public offering.
The index has climbed nearly 4pc so far this week, more than recovering all its losses suffered last week when the Federal Reserve’s hawkish comments about speedier taper spurred bets about an early interest rate hike next year to curb surging inflation.
“The markets understand that a zero interest rate environment is not going to last forever, that the Fed is going to use a measured approach to raising rates and not just some dramatic balance upwards,” Kim Forrest, chief investment officer at Bokeh Capital Partners in Pittsburgh, told Reuters.
“This is a reflection of what is driving the market. Things that were on sale are being bought, especially those higher multiple stocks.”
05:37 PM
FTSE 100 extends Monday’s gains
The FTSE 100 is continuing its positive streak this week, boosted by mining stocks and encouraging profit outlooks, with global markets taking relief from receding concerns about the Omicron variant of the coronavirus.
The index ended 1.5pc higher at 7,339 with base metal miners leading gains as copper prices were boosted by monetary policy easing in top consumer China.
Plumbing parts distributor Ferguson advanced 5.9pc and was among the top blue-chip gainers after a strong revenue growth forecast.
Rental equipment provider Ashtead Group PLC rose 3.9pc after hiking its dividend and saying it expects full-year results to top previous estimates.
The FTSE 100 has rebounded to levels touched before the detection of the Omicron variant in late November after experts said the new strain might not be as severe as feared.
05:18 PM
Pubs and restaurants ditch plans to hire festive workers
Pubs and restaurants have scrapped plans to hire more staff as the new Covid variant keeps customers at home and causes Christmas parties to be cancelled. My colleague Tim Wallace reports:
The hospitality sector is already feeling the effect of additional Covid restrictions brought in since the discovery of omicron, denting hopes of a more normal festive season of socialising.
Jobs site Adzuna found just over 80,000 vacancies advertised in hospitality and catering roles in the last week. That is down by more than one-quarter on the week, and represents the lowest number of available positions since the start of August when the sector was still trying to get back to normal after “freedom day”.
In late November businesses had been hiring vigorously to bring in staff to deal with the Christmas rush – more than 107,000 jobs were available near the end of the month – but this seems to be evaporating as omicron fears spread, according to Andrew Hunter, the group’s co-founder.
05:00 PM
American Airlines appoints president to chief executive role
Remaining in the team of top management promotions, American Airlines has appointed its president Robert Isom to replace Doug Parker as chief executive officer early next year.
Mr Parker, who has led the airline since 2013, will step down in March but stay on as chairman.
Mr Isom has been the heir apparent since he was appointed president in mid-2016 and his selection signals that a steady hand is intended for the airline’s first leadership transition in eight years.
The pair have worked together for over two decades, joining American after engineering its $11bn merger with US Airways Group.
As chief executive, Mr Isom faces some non-pandemic related challenges such as cutting the airline’s $36.1bn long-term debt as well as contending with pilots and flight attendants over scheduling problems. The group is also facing off with the Justice Department over the carrier’s planned Northeast Alliance with JetBlue Airways Corp.
04:43 PM
DC Thomson creates new role to boost growth plans
DC Thomson has promoted Rebecca Miskin to the newly created role of chief executive of its media portfolio as the 116-year-old group progresses its growth plans.
She will now oversee the entire media operation, bringing together brands such as Beano Studios, Stylist and Puzzler for the first time, plus communities in energy, local and national news, teaching, crafts, sport and radio.
Ms Miskin joined in summer 2020 as chief strategy and transformation officer and will also keep performing her original duties.
She has a track record of leading digital transformation at major media companies, having previously been digital strategy director at Hearst, general manager at NBC Universal and commercial director at Time Inc.
04:25 PM
Bitcoin claws back losses
Bitcoin is back to dizzy highs of $51,897 after rising as much as 3.6pc.
The cryptocurrency is clawing back the losses suffered at the weekend and some chart watchers suggesting the rally may push it back to around $55,000.
Digital coins dove on Saturday amid a greater risk-off sentiment that also encompassed selloffs in many areas of the US stock market. It happened as spiking inflation is forcing central banks to tighten monetary policy, threatening to reduce the liquidity tailwind that lifted a wide range of assets.
“It’s important to remember that these kinds of pullbacks are part and parcel of a market that is increasingly hungry for excessive risk,” Mati Greenspan, founder and chief executive of Quantum Economics, wrote in a note. “Every once in a while, the riskiest parts of the market, in this case mostly meme coins and metaverse tokens, do need to be washed out.”
04:11 PM
Handing over
That’s all from me, thanks for following! Handing over now to my colleague Giulia Bottaro.
04:06 PM
Ethical investors should embrace weapons makers, says Babcock boss
Ethical investors should put their money in weapons makers because they have a vital role to play in keeping the world safe, the boss of Royal Navy contractor Babcock has argued.
My colleague Howard Mustoe has more:
“If we want to do the good things that everyone wants, you need a stable world,” said David Lockwood. “For a stable world you need strong Western defence. We’re part of that.”
His comments come as fears mount that Vladimir Putin could stage a Russian invasion of Ukraine and that China may try to seize control of Taiwan.
Mr Lockwood insisted no investors have sold out of the FTSE 250 aerospace, defence and security company because of concerns over Babcock’s environmental, social or governance (ESG) track record.
“I see defence as a positive from an ESG point of view,” Mr Lockwood said. “You need to have a strong country in order to implement strong ESG strategies, so I don’t really get this ‘defence isn’t ESG’ thing.”
The chief executive, who joined a year ago, blamed the recent slide in the share price on investor reaction to his plan to revive the troubled company that includes improving profits.
03:55 PM
Neither Fed nor virus will derail stock rally, say UBS and Barclays
Neither more hawkish rhetoric from the Federal Reserve nor the spread of the omicron variant will halt the rally in stocks, according to bullish new notes from UBS and Barclays.
Analysts at Barclays said the global economy had “learned to live better with each wave of Covid, and we expect the pattern to broadly stay consistent with this variant”
They added that while the Fed had “reset expectations” in recent weeks with regard to withdrawing its stimulus, it “is unlikely to over-deliver on the rate hikes already priced in”.
Meanwhile Mark Haefele, chief investment officer at UBS, said: “Our base case is that the market focus will shift back toward the positive outlook for economic growth and earnings.
“Investors should consider whether now is a good opportunity to add some of the winners from global growth that have been most negatively affected in recent days – including the eurozone, Japan, energy, and financials.”
While markets crashed after the emergence of the omicron variant last month, stocks have staged a steady rebound over the last week as initial concerns have begun to subside.
03:25 PM
Janet Yellen: Supply troubles could take years to resolve
US Treasury Secretary Janet Yellen has warned that some supply chain issues could take years to resolve, adding that the US may need more protectionist policies to help protect its economic growth.
Disruptions sparked by the pandemic have led to shortages of many goods – including semiconductors crucial to the electronics and automotive sectors – hampering output and pushing up prices for consumers.
Ms Yellen said it may take “a couple of years” to resolve the bottlenecks for many products, adding that the US’s reliance on foreign supply chains had proved to be a vulnerability and more critical goods should be produced domestically.
Speaking at a conference today, she said: “It’s possible that policies that people will describe as protectionist are going to be necessary in order to create the appropriate incentives to produce things at home.”
The Treasury chief also repeated her views that elevated inflation was mainly caused by pandemic-related supply issues, and that it would fade as the virus came under control. She said she saw no evidence of a wage-price spiral that could sustain the pace of price increases for an extended period.
03:10 PM
US should ‘can’ $2 trillion spending bill, says Elon Musk
Elon Musk has provoked a spat with Joe Biden’s administration and green campaigners by saying that taxpayer cash should not be used to support electric cars.
Here’s more from my colleague James Titcomb:
The Tesla chief executive said that billions of dollars of investment in tax credits and charging infrastructure in the White House’s $2 trillion (£1.5 trillion) proposed spending package were unnecessary.
“Do we need support for gas stations? We don’t. Delete it,” Mr Musk told the Wall Street Journal’s CEO Council Summit.
“Honestly, I would just can this whole bill.” He added that governments should “be a referee but not a player on the field” and should “get out of the way and not impede progress”.
Tesla currently enjoys a lead in electric car charging infrastructure through its Supercharger network, which is seen as a key advantage for its cars.
Mr Musk has vowed to loosen restrictions on Tesla chargers so that other cars can use them. The company has also been a major beneficiary of taxpayer subsidies to boost electric car ownership.
However, Mr Musk, the world’s richest man, has been critical of US Democrats’ proposed heavy spending programmes and proposed tax increases on the wealthy to pay for them.
03:03 PM
Tech stocks lead gains as Wall Street jumps at the open
US stocks have jumped at the opening bell, boosted by strong gains for tech companies.
The tech-heavy Nasdaq has surged 2.6pc, while the benchmark S&P 500 is up 1.6pc The Dow Jones has gained 1.3pc.
It comes amid improving sentiment about the omicron Covid variant after as initial findings have suggested it may not be as bad as initially feared.
Tech stocks that bore the brunt of last week’s sell-off are among the biggest gamers, with Tesla up more than 4pc.
02:06 PM
Government set to boost carbon supplies as prices soar
The Government is reportedly poised to release more credits into the carbon market in a bid to keep a lid on soaring prices.
Energy-intensive industries such as steelmaking have been hit by rising power and gas prices in recent months, prompting calls for ministers to step in with support.
The UK market contains a mechanism that allows the Government to intervene if prices exceed a certain level for three month in a row. This mechanism was triggered last week.
Bloomberg reports that while no final decision has been taken, ministers are likely to step in, with a verdict expected as soon as this week.
01:57 PM
FTSE 100 check-up
Time for a quick look at the FTSE 100, which has held its gains amid newfound hope that initial fears about the omicron variant were overblown.
The blue-chip index is up 1.2pc at 7,317 points, with miners leading gains after an easing of monetary policy in China boosted copper prices.
Events group Informa is among the biggest risers, jumping 4.6pc after it announced plans to sell one of its divisions and launch a £1bn share buyback and dividend plan.
Plumbing parts distributor Ferguson has also gained ground, up 4.8pc on the back of strong earnings.
Meanwhile, the mid-cap FTSE 250 is up 1.5pc, led by rebounds for travel and leisure stocks.
12:44 PM
UK cyber firm Mimecast snapped up in £4.4bn private equity deal
British cybersecurity firm Mimecast is being snapped up by Permira Advisers for $5.8bn (£4.4bn), marking the latest acquisition for the buyout group.
Permira has tabled an offer of $80 per share, representing a premium of roughly 16pc to Mimecast’s closing price on Oct 27.
London-headquartered Mimecast, which specialises in cloud-based email management services, has seen its share price rise almost a third over the last year as the shift to home working drove up demand for cyber services.
The deal, which is expected to close in the first half of 2022, also includes a so-called “go shop” period, where the firm and its advisers will look for rival deals.
It comes after an investor group led by buyout firms Advent International and Permira last month agreed to take cybersecurity software maker McAfee private in a $14bn deal.
Mimecast’s shares, which are listed on the Nasdaq, jumped 6pc in pre-market trading.
12:33 PM
Informa surges on sale plan and £1bn payout
Informa has jumped to the top of the FTSE 100 as the company’s fresh growth strategy went down well with investors.
In an update to coincide with its capital markets day, the events group said it will sell its data and research unit Informa Intelligence to fund growth in the rest of its business.
Subject to this sale, Informa will also return £1bn to shareholders through a share buyback programme and special dividend.
Shares jumped as much as 6.9pc following the update.
12:23 PM
City watchdog plots tighter rules after mini-bond scandal
The City watchdog is planning to tighten rules on finance firms as it looks to improve consumer protection standards after the mini-bond scandal.
The Financial Conduct Authority (FCA) is proposing a new “consumer duty”, designed to push firms to compete in the interests of retail customers.
Firms will be expected to consider the likely outcomes their customers will receive over the full lifecycle of their product offerings – a goal the FCA said it will back up with “assertive supervision”.
It marks the latest efforts by the regulator to overhaul its operations after the collapse of London Capital & Finance exposed customers to losses on £230m of investments.
12:07 PM
US futures rise as tech stocks bounce back
Wall Street is set to opened high this afternoon, boosted by a strong rebound in tech stocks as concerns about the omicron variant ease.
Futures tracking the tech-heavy Nasdaq have jumped 1.7pc. The S&P 500 is up 1.3pc, while the Dow Jones has gained just shy of 1pc.
Some major tech stocks have taken a beating in recent days as investors brace for a tightening of monetary policy despite concerns about the omicron strain.
Tesla, which dropped into bear market territory on Monday, gained 3.7pc in pre-market trading. Intel surged more than 9pc after announcing plans to take its self-driving car unit Mobileye public.
11:56 AM
Abandoning new oil and gas risks social unrest, warns Aramco chief
Global leaders risk unleashing social unrest unless they keep investing in fossil fuels, the boss of Saudi Arabia’s state-owned oil company has warned, .
My colleague Matt Oliver has more:
Amin Nasser said attempting to switch to renewable energy “virtually overnight” would lead to soaring prices and erode public support for the changes.
“I understand that publicly admitting that oil and gas will play an essential and significant role during the transition and beyond will be hard for some,” he told an industry conference in Texas.
“But admitting this reality will be far easier than dealing with energy insecurity, rampant inflation and social unrest as the prices become intolerably high, and seeing net-zero commitments by countries start to unravel. The world is facing an ever more chaotic energy transition centred on highly unrealistic scenarios and assumptions about the future of energy.”
Saudi Arabia relies heavily on hydrocarbon exports and has pledged to become carbon neutral by 2060. However, it cannot do so without continuing to pump out millions of barrels of oil for decades to come.
11:37 AM
Pret sales slip below pre-Covid levels as omicron hits lattes
Time for an update from everyone’s favourite economic recovery gauge – the Pret Index.
Just two weeks after Pret A Manger’s weekly sales returned to pre-pandemic levels, the emergence of the omicron variant and the return of face mask rules have put trading firmly on the back foot once again.
The latest figures from Bloomberg’s Pret Index show workers and shoppers heading into the city centre are showing more caution as the new strain continues to spread.
Transactions at branches of the ubiquitous coffee shop chain in the City and Canary Wharf have fallen to their lowest level since October. Overall, sales are back below pre-pandemic levels.
Pret chief executive Pano Christou told Bloomberg: “There’s no doubt that there’s a worry there in how this will percolate. I think whereas we would see a continued ramp-up to the middle of December, we’ll slowly see a tailing off from last week.”
11:10 AM
GSK says antibody drug works on omicron variant
GlaxoSmithKline has said its antibody-based Covid drug works on all mutations of the omicron variant, in a further sign the new strain could be easier to handle than previously thought.
The British pharmaceutical giant said early stage trials of its sotrovimab treatment, which it produces with US partner Vir Biotechnology, showed it was effective against all 37 identified mutations to date in the spike protein.
The many mutations of the omicron variant have fuelled fears it could evade existing vaccines and treatments and spooked markets.
While Moderna’s boss warned vaccines could be less effective against the strain, both Pfizer and AstraZeneca were more optimistic about the prospects.
GSK’s chief scientific officer Hal Barron said: “These pre-clinical data demonstrate the potential for our monoclonal antibody to be effective against the latest variant, Omicron, plus all other variants of concern defined to date by the WHO.”
11:00 AM
Shaftesbury signs 60 new brands to West End sites
Shaftesbury has struck an upbeat tone over the recovery of the high street, saying it’s signed over 60 new brands to its West End estate.
The FTSE 250 property group said the new leases had been secured across its villages in Carnaby, Seven Dials, Chinatown, Soho and Fitzrovia since 1 October.
They include 33 new retailers, of which six are making their UK debuts. American Eagle and Gilly Hicks are among the new entrants from the US.
Shaftesbury said weekend footfall is currently at or above 2019 levels, while weekday customer numbers are at roughly 80pc.
Samantha Bain-Mollison, retail director at Shaftesbury, said: “The level and quality of demand for space from such great brands and concepts reflects the strength of our portfolio and speed of its recovery following the lifting of pandemic restrictions.”
10:40 AM
German investor confidence slumps on fresh virus wave
It’s not all rosy in the eurozone, however, with a fresh survey from Germany showing current sentiment is rather less positive.
Investor confidence in Europe’s largest economy dropped in December as a fresh wave of Covid-19 infections threatened to derail the recovery.
The ZEW institute’s gauge of expectations fell to 29.9 in December from 31.7 the previous month. An index of current conditions dropped to a six-month low of -7.4.
Germany has already been battling surging inflation that has hampered its manufacturing-heavy economy. But a recent rise in cases and tighter restrictions have compounded these troubles, paving the way for a difficult start for incoming Chancellor Olaf Scholz.
ZEW president Achim Wambach said: “Persisting supply bottlenecks are weighing on production and retail trade. The decline in economic expectations shows that hopes for much stronger growth in the next six months are fading.”
10:27 AM
Eurozone economy grows as households splash out
The eurozone economy grew 2.2pc in the third quarter, driven largely by a rise in household expenditure as lockdown measures eased.
Household spending contributed 2.1pc to the GDP growth, while government outlays lifted it by 0.1 percentage points, according to the latest figures from Eurostat.
Employment also increased by 0.9pc in the three months to the end of September, showing a positive rebound across the continent.
However, output remained 0.3pc below its pre-Covid levels at the end of 2019, while a fresh wave of infections and new lockdowns in Austria and Slovakia – alongside surging inflation – threatens to derail the recovery.
10:19 AM
SSE hits back at Elliott over break-up calls
SSE has hit back at Elliott after the activist investor ramped up the pressure on the energy giant to break up its business.
In response to a letter published by Elliott this morning, chief executive Alistair Phillips-Davies said separating SSE’s renewables business did not support growth and would harm its ability to fund the shift to net zero.
He said:
Separation risks valuable growth options across the clean energy value chain, would jeopardise our ability to finance and deliver the major infrastructure the UK needs to create jobs and achieve net zero, and would lose shared skills that benefit the group.
Separation does not support the financing of our core growth businesses and would rule out adjacent growth options, as well as reducing the resilience of the business model – it is not the right outcome to maximise value for shareholders or our other stakeholders.
10:06 AM
Gas prices jump as US weighs mulls more Russia sanctions
Gas prices are on the rise again as traders weighed the risk of fresh sanctions against Russia if it invades Ukraine.
US President Joe Biden is due to hold talks with Russian President Vladimir Putin later today to warn Moscow of severe economic penalties if it moves troops over the border into its neighbour.
The rising tensions add to existing worries over Russian gas supplies to the continent, which has already lagged in recent months, pushing prices ever higher.
Benchmark Dutch prices rose as much as 7.6pc this morning, while the UK equivalent gained up to 7.1pc.
While prices have eased back from record highs in reached in October, analysts and traders expect futures to remain high through the winter as the continent’s gas inventories are at their lowest in more than a decade.
09:55 AM
Instagram tells users to ‘take a break’ from scrolling
Instagram is launching a new feature that encourages users to take a break from scrolling as the social media giant battles criticism that its app harms children’s wellbeing.
The company will let users opt to see pop-up messages when they’ve spent a lot of time looking at a particular topic, prompting them to explore other subjects.
Users can also be nudged to take a break after they’ve spent 10, 20 or 30 consecutive minutes on the app.
It comes amid growing scrutiny on Facebook-owned Instagram after documents released by whistleblower Frances Haugen showed the company knew how much harm it was having on younger users.
Instagram boss Adam Mosseri is due to appear in front of US politicians on Wednesday at a hearing into children’s safety on social media.
09:46 AM
Pound stumbles ahead of Bank of England meeting
Sterling is faltering this morning as traders weigh up the chances of an interest rates rise at the Bank of England’s key meeting next week.
The pound pushed up as much as 0.1pc against the dollar earlier in the day, but is now flat at around $1.3256. Against the euro, it ticked up 0.1pc to 85.21p.
Attention is turning to next week’s MPC meeting, with some betting the central bank will leave rates unchanged again, waiting until February for the first move.
In a note published on Monday, JP Morgan said it reckoned the BoE would buy more time as “the emergence of the omicron variant has introduced new uncertainty about the timing of the first tightening”.
09:29 AM
Ashtead cashes in on reopening boom
Another big winner this morning is Ashtead, the FTSE 100 firm specialising in industrial equipment rentals.
Ashtead posted first-half revenue of $3.9bn (£2.9bn) – up 18pc on last year. Growth came largely in the second quarter, as demand bounced back strongly from its pandemic slump.
The company hailed a record performance and pointed to strong momentum as the trend for renting equipment continues to gather pace. It announced an interim dividend of 12.5p – up by almost a third.
Shares rose as much as 4pc following the update, before paring gains to rise 2.7pc.
09:22 AM
Liontrust snaps up Majedie in £120m asset manager merger
Liontrust has agreed to buy boutique fund manager Majedie for up to £120m in the latest example of consolidation in the sector.
FTSE 250-listed Liontrust said the deal, which consists of £97m in shares and the remainder in cash, will boost its assets under management and administration to £42.3bn.
It’s Liontrust’s third takeover in just over three years, following its 2019 takeover of Neptune Investment Management and a deal for Architas last year.
As part of the deal, Majedie’s investment team will join Liontrust and become its global fundamental team, led by co-founder James de Uphaugh.
Shares in Liontrust gained 1.8pc following the announcement.
09:15 AM
Oil prices rise as omicron fears fade
As stocks push higher this morning, oil prices have also gained ground amid hopes the omicron variant may not be as bad as initially feared.
West Texas Intermediate is up 2.4pc to more than $71 a barrel after closing 5pc higher on Monday, while benchmark Brent crude has gained 2pc.
The emergence of the omicron strain sparked fears of dented demand over the winter, but the initial data suggests the rise in cases hasn’t overwhelmed hospitals so far. Still, fresh travel restrictions will put some pressure on jet fuel demand.
09:04 AM
Ferguson jumps as sales top estimates
Let’s take a closer look at Ferguson, which is leading the FTSE 100 risers this morning.
The company, which distributes plumbing and heating products, topped expectations with revenue of $6.8bn (£5.1bn) in the first quarter – up 27pc year on year.
Ferguson said price inflation had risen to the low teens over the period, but said it had mitigated this impact to deliver strong profit growth.
Chief executive Kevin Murphy said: “Given the strong momentum in the business and the agility of our business model, our full-year expectations have increased.”
Shares rose 4.7pc following the update.
08:56 AM
Veolia and Suez given five days to avoid competition probe
French waste management firm Veolia and Suez have been given five days to address the competition watchdog’s concerns about their planned merger or face an in-depth investigation.
The Competition and Markets Authority (CMA) said the tie-up, worth almost €13bn (£11.1bn), could lead to higher prices for councils and taxpayers in the key waste and recycling markets.
The CMA said it had received complaints from customers and other firms in the market during its initial investigation and that it had found a number of competition concerns which could see prices increase for councils and a reduced quality of services.
The watchdog said it will refer the deal for an in-depth investigation if the companies did not put forward suitable proposals to address the concerns within five working days.
Andrea Coscelli, chief executive of the CMA, said:
Councils spend hundreds of millions of pounds on waste management services.
Any loss of competition in this market could lead to higher prices for local authorities, leaving taxpayers to foot the bill, and reduced innovation to achieve net-zero targets.
Everyone in the UK uses waste and recycling services in some way; it is therefore vital that this deal is subject to more detailed scrutiny if our concerns aren’t addressed.
08:49 AM
FTSE risers and fallers
The FTSE 100 is now up more than 1pc, building on strong gains to kick off the week as jitters over the omicron strain recede.
Miners are among the biggest gainers on the blue-chip index, buoyed by rising copper prices after China loosened monetary policy to help shore up its struggling property sector.
A string of upbeat corporate results also boosted the index.
Plumbing parts group Ferguson is up 4.7pc, rising to the top of the FTSE 100 after forecasting strong revenue growth.
Equipment rental firm Ashtead has also risen 2.3pc after raising full-year forecasts and hiking its dividend.
The domestically-focused FTSE 250 is up just shy of 1pc, supported by recovery in travel and leisure stocks.
08:27 AM
Britons to fork out for Christmas dinner as inflation surges
Inflation has driven up the average price of a Christmas dinner, but Britons show no signs of tightening the purse strings just yet.
A festive meal for four now costs £27.48 on average, up 3.4pc on last year. It comes amid wider grocery inflation of 3.2pc – its highest level since June 2020.
However, this hasn’t had a major impact on shopper behaviour yet, with consumers still splashing out on premium own-label ranges, according to new figures from Kantar.
Overall, grocery sales fell by 3.8pc over the 12 weeks to 28 November 2021 compared to last year, though they remained above pre-pandemic levels.
Tesco won 0.7 percentage points of market share this period, the retailer’s biggest jump since 2007.
08:12 AM
Activist Elliott pushes for break-up of SSE
Activist investor Elliott has dialled up the pressure on SSE, pushing for a break-up of the company and bemoaning its failure to address concerns about corporate governance.
In a letter to chairman John Manzoni, Elliott said the energy giant had failed to provide a convincing reason for why it wasn’t pursuing a listing of its renewables business – a move the activist said would create £5bn of value.
The activist, which is a top five investor in SSE, urged the firm to provide a “detailed and credible plan” to address investor concerns.
It comes after SSE last month said it wouldn’t be breaking itself up, saying this would lead to £95m a year of lost value. It also announced a dividend cut to 2024 to fund a £12.5bn increase in spending on net zero infrastructure over the next five years.
08:01 AM
FTSE 100 jumps at the open
The FTSE 100 has gained ground at the open, building on strong gains to kick off the week.
The blue-chip index is up 0.7pc at 7,285 points after rising 1.5pc on Monday.
07:55 AM
British American Tobacco hails vaping boost
British American Tobacco said it’s gained around 3.6m users of its vaping, heated tobacco and oral products since the start of the year as it continues to shift its business away from cigarettes.
The rise in vapers – which is bigger than in all of 2020 – takes the total number of customers for BAT’s non-combustible products to 17.1m at the end of September.
The tobacco giant, which owns brands including Pall Mall and Camel, still makes a loss on these products, but it reported a narrowing of these losses for the first time. The company is targeting profitability by 2025.
Revenue grew 5pc over the period, in part thanks to the rise in vaping, but also due to traditional cigarette sales.
07:43 AM
More expert reaction: Supply shortage is ‘biggest issue’
Anna Clare Harper, chief executive of property consultancy SPI Capital, agrees that house price growth will slow, but says low interest rates will support prices in the short term.
Going forward, it is likely that the pace of growth will slow, in particular through the colder winter months which make it harder for many potential buyers logistically, with fewer daylight hours for viewings.
However, growth is likely to continue while interest rates remain low, since the cost of holding on to a property is cheap, and competition amongst lenders means low cost, fixed rate mortgages are widely available.
The biggest problem the housing market faces is the shortage of available stock, which means that prices are likely to remain strong. This issue is unlikely to change anytime soon due to higher costs of materials and labour, a backlog of planning applications and a growing burden of rules and regulations for property developers to contend with.
07:38 AM
Expert reaction: Uncertainty weighs on house market
Russell Galley, managing director at Halifax, warns current house price levels are unlikely to last long.
The performance of the market continues to be underpinned by a shortage of available properties, a strong labour market and keen competition amongst mortgage providers keeping rates close to historic lows. Those taking their first step onto the property ladder are also playing an important role in driving activity, with annual house price inflation for first-time buyers at 9.1pc compared to 8.8pc for homemovers […]
Looking ahead, there is now greater uncertainty than has been the case for quite some time, with interest rates expected to rise to guard against further increases in inflation. Economic confidence may be also be dented by the emergence of the new omicron virus variant, though it remains far too early to speculate on any long-term impact, given insufficient data at this stage, not to mention the resilience the housing market has already shown in challenging circumstances.
Leaving aside the direct impact of a possible resurgence in the pandemic for now, we would not expect the current level of house price growth to be sustained next year given that house price to income ratios are already historically high, and household budgets are only likely to come under greater pressure in the coming months.
07:28 AM
House prices surge again
Good morning.
The UK house market is breaking records once again, with prices growing for the fifth consecutive month to another new high.
Average house prices added another 1pc in November to hit £272,992. Quarterly house price growth is now at its strongest level in 15 years.
The numbers show continued resilience in the market even after the end of the stamp duty holiday, which helped spur on activity during the pandemic.
This points to other underlying factors supporting prices, including a supply shortage and cheap borrowing rates.
5 things to start your day
1) Block Chinese takeover of lithium miner, ministers told Opponents fear allowing Bacanora Lithium to be bought risk giving Communist China even greater production control
2) Donald Trump’s new social media venture hits obstacle Two regulators request records from Digital World regarding trading procedures and investor identities
3) Guardian under pressure to stop spilling red ink News publisher’s trust announces governance shake-up
4) Brussels attack on gig economy sends shares in Deliveroo and Just Eat tumbling Takeaway firms hit as EU prepares to hand employment rights to millions
5) Cyber attack forces Spar stores to close Card payment and IT systems at the convenience store chain affected by the online incident
What happened overnight
Asian stocks edged higher on Tuesday on receding worries about the impact of the omicron variant while Chinese markets gained after the central bank there eased monetary policy.
MSCI’s broadest index of Asia-Pacific shares outside Japan advanced 0.6pc after declining on Monday to the lowest level in one year.
The benchmark has lost 6pc so far this year, with Hong Kong markets figuring among the big losers, while Indian and Taiwanese stocks outperformed.
On Tuesday, Australia’s S&P/ASX200 rose 0.5pc, while Japan’s Nikkei advanced 1.1pc as risk-on sentiment pushed US stocks higher.
China’s CSI300 index gained 0.7pc and Hong Kong’s Hang Seng Index advanced 1.3pc as the central bank freed up $188 billion in liquidity through a policy easing.
Coming up today
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Corporate: Paragon Banking Group, Renew Holdings, CareTech (Full-year results); Babcock, Supreme, Mercia Asset Mgmt (Interim results); Ashtead Group, British American Tobacco, Ferguson (Trading update)
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Economics: Kantar supermarket sales (UK), ONS mergers and acquisitions (UK), Consumer credit (US)
