Evergrande worries are back on the agenda today after shares in the troubled Chinese property developer were halted.
The group said its shares had been suspended on Monday pending the announcement of a possible “major transaction”.
Local media reported that Hopson Development, whose shares were also suspended, plans to acquire 51pc of Evergrande’s property management arm.
The development put Asian stocks and US futures on the back foot as investors weighed the potential impact of Evergrande’s fate on the wider market.
08:59 AM
Airbus boss sticks to A320 expansion plans
The aviation sector may be struggling with acute shortages of labour and materials, but it doesn’t seem to be have fazed the boss of Airbus.
Guillaume Faury has said he is confident Airbus’ suppliers can overcome the challenges and boost production of the A320 family of aircraft.
In an interview with Bloomberg, Faury reaffirmed the company’s plan to boost A320 output from 40 per month today to 64 a month in 2023, and said Airbus remains interested in potentially reaching 75 per month around mid-decade.
He said it was essential the planemaker’s vast supply chain have those ambitious, longer-term targets in mind as they manage through the current turmoil.
Faury added: “That anticipation is required for the supply chain to do the right things because we’re in an unprecedented situation in terms of tension in the supply chain. And we need to start the ramp-up.”
08:51 AM
Sunak: UK is committed to HS2
Rishi Sunak has insisted that the government is committed to the HS2 rail link amid concerns about the escalating cost of the project.
The chancellor told LBC: “The government is committed to HS2. We are as a government, of course we are.
“Some of these big projects at the time you do them, people will be skeptical, but over time, people will see that improving the connectivity amongst our cities will help us create job opportunities and that’s what it’s about.”
He added that the government was committed to HS2 because “infrastructure can transform people’s prospects”.
08:36 AM
British Airways owner IAG rises on fresh Gatwick plan
It may have been a sluggish start to the week for the FTSE 100, but British Airways owner IAG is among the stocks making gains.
The company is currently up 2.1pc – among the biggest gainers on the blue-chip index this morning.
It follows a report from my colleague Oliver Gill that British Airways is close to backtracking on its decision to scrap short-haul flights from Gatwick airport.
Bosses at trade union Balpa will take a new pay deal to pilots after re-opening talks last week in the hope that they will support sweeping changes at Britain’s second-busiest airport.
08:25 AM
Sterling rises to six-day highs
Sterling is hovering near its highest levels in almost a week this morning against both the dollar and the euro, continuing its recovery from last week.
Rising inflation expectations early last week hit bond yields, pushing the pound to its lowest levels since December 2020.
Sterling has since made a tentative recovery hitting $1.3576 early on Monday, its highest since Sept. 28. That still leaves the currency down 0.8pc on the year against the dollar. Against the euro, sterling was largely unchanged at 85.61p.
08:11 AM
Oil prices hold steady ahead of Opec meeting
Oil prices are holding their lofty highs this morning as all eyes turn to today’s meeting of Opec+ producers.
Crude oil is trading at just below $80 per barrel – its highest level in almost three years. The cartel’s production policy is expected to be the main factor influencing the market in the coming months.
Saudi Arabia has seen its output rise close to pre-pandemic levels and is enjoying its highest petrol revenues since 2018. Its fellow members are also united behind plans to restore their collective production to 400,000 barrels per month.
Amrita Sen of Energy Aspects said Opec+ was likely to stick to its plan at the meeting today. As long as prices are between $70 and $80 per barrel, he said, “the urgency to act beyond the current deal is limited”.
08:02 AM
Flutter appoints new FanDuel chief
Betting giant Flutter has tapped Amy Howe as head of FanDuel as it mulls a potential spin-off of its US business.
Ms Howe joined sportsbook and fantasy sport business FanDuel as president in February before becoming its interim chief executive in July.
Her appointment comes after previous boss Matt King announced his departure plans in May after four years of leadership.
Flutter, which owns Paddy Power, has been eyeing plans to float FanDuel, though it previously warned that Mr King’s departure could delay the process.
FanDuel, which Flutter acquired in 2018, has been growing rapidly as US states ease their betting regulations.
07:57 AM
Sunak: It’s my job to tell Boris Johnson not to overspend
More from Rishi Sunak now, who’s doing the media rounds ahead of his speech at the Conservative Party conference this morning.
The chancellor has said that part of his job is telling Boris Johnson not to overspend. It follows reports that Sunak told the Prime Minister he’d cut up his credit card.
He told the BBC: “I think that was an old thing, but I think that’s something that all chancellors say, that it’s part of our job,
“I’d like to think that we have been responsible with the public finances and that’s something that I take very seriously.”
07:52 AM
Magazine publisher Future slides despite upbeat trading
Publisher Future has fallen sharply this morning despite saying it expected full-year trading to be at the top end of previous forecasts.
The magazine group, which owns titles including FourFourTwo and GoCompare, said it was on track for another year of strong growth thanks to momentum in digital advertising.
It also said Rachel Addison will stand down from her position as chief financial officer at the end of the month. She will be replaced by Penny Ladkin-Brand, currently the company’s chief operating officer.
Shares in Future were down as much as 4.3pc to their lowest level in seven weeks.
07:45 AM
BT slumps to six month-low
A bit more detail now on BT, which has slumped as much as 7.6pc to a six-month low.
It comes after my colleague Ben Woods reported that Sky is closing in on a broadband investment deal with Virgin Media O2.
The deal has raised concerns over competition in the broadband sector, with BT’s Openreach under threat. Jefferies analyst Jerry Dellis says the report gives “fresh impetus” to an existing BT overhang.
07:34 AM
FTSE risers and fallers
BT is the biggest drag on the FTSE 100 this morning, sliding 6.2pc in its largest drop in more than nine weeks.
There was also a significant fall for Morrisons, which was snapped up over the weekend by US private equity firm Clayton, Dubilier and Rice (CD&R), who sealed the deal at auction with a £7bn bid.
The supermarket chain was down 3.7pc to 285p – below CD&R’s successful 287p bid.
Providing some upward momentum was rival Sainsbury’s, which rose 1.9pc as the Morrisons deal sparked speculation of further deals in the grocery sector. JD Sports also gained 1.8pc.
On the FTSE 250, Plus500 was up 3.6pc after beating forecasts in its latest results. AO World also gained 3.3pc, clawing back some losses from last week after analysts at Jefferies branded its trading update “disappointing”.
It was less positive for Frasers Group, however, which plunged 9.5pc in its biggest fall for two months. Mike Ashley’s company has been under scrutiny for plans to hand its incoming boss a £100m bonus.
07:24 AM
French Connection accepts £29m takeover offer
French Connection is backing a £29m takeover approach made by a group of bidders including the company’s second largest shareholder.
The fashion chain unanimously recommended the 30p-per-share offer from a consortium that includes which includes Apinder Singh Ghura, Amarjit Singh Grewal and KJR Brothers.
The struggling retailer kicked off a formal sales process in March and had announced the bid on Sept 23.
Singh Ghura, who has worked in the clothing industry for many years but also has investments in property and care homes, already owns just over 25pc of the company.
Chief executive Stephen Marks remains the chain’s largest shareholder and has given irrevocable approval for the takeover.
It comes after a challenging time for French Connection, which was founded in 1972. It’s been closing stores and in April said that revenue had slumped 40pc in the year to the end of January.
07:13 AM
German automotive confidence falls further
Confidence among German car makers is continuing to fall, with the latest figures showing that supply chain issues had made sentiment “much worse” in September.
A gauge produced by Ifo showed sentiment among German automotive manufacturers and their suppliers plummeted from 32.0 points to 13.2 points last month. In July, the figure had stood at 52.9 points.
Ifo’s Oliver Falck said: “The latest figures show that the automotive industry is the industry most seriously affected by supply bottlenecks for intermediate products.”
07:05 AM
FTSE 100 opens lower
The FTSE 100 has opened lower this morning, extending losses from the end of last week.
The blue-chip index was down 0.2pc at the opening bell at 7,013 points.
07:02 AM
Sunak: UK fuel supply issues are ‘getting better’
Rishi Sunak has said the UK’s fuel supply troubles are “getting better”, as he looked to calm concerns about panic buying.
The chancellor said there was enough petrol at refineries and terminals, adding that fuel deliveries had exceeded purchases since Tuesday.
But he warned it was hard to put a precise date on when the situation will return to normal.
It comes as the army is deployed today to help deliver fuel to filling stations up and down the country.
Almost 200 armed forces personnel, half of whom are drivers, will begin providing temporary assistance. Soldiers in fatigues have been seen arriving at a BP refinery this morning.
06:52 AM
Rishi Sunak to unveil £500m job support scheme
Rishi Sunak is poised to announce even more job support today in a speech at the Conservative Party conference.
The chancellor will pledge £500m to help get people back into work or retrain amid an ongoing labour shortage.
Much of the support package will be aged at people between 50 and 64 who are now out of work, softening the landing for millions of Britons after the furlough scheme came to an end last week.
Asked this morning about recent tax hikes to help fund health and social care, Sunak said he and Boris Johnson did not want further tax increases.
But he said he couldn’t guarantee that council tax won’t rise following comments by the Local Government Association that 9pc increases were possible.
06:34 AM
Evergrande shares halted
Good morning.
Shares in Evergrande have been suspended this morning as rumours swirl about a major rescue deal for the beleaguered property giant.
Trading was suspending pending the announcement of a “major transaction”, Evergrande said in a stock market filing. The company’s property management arm said it was halted before a possible offer for shares.
Local media reported that Hopson Development, whose shares were also suspended, plans to acquire 51pc of Evergrande Property Services.
Uncertainty over Evergrande’s debt load of more than $300bn has roiled global markets, stoking fears of a collapse that could spread throughout the wider economy.
5 things to start your day
1) Supermarket shortages are a good thing, says Tory MP – Row ignited with business at Tory conference as MP claims breakdown of supply chains is in the long-term interest of economy
2) Morrisons bidding war to spark flurry of City dealmaking – Sainsbury’s and M&S also in firing line as cheap pound encourages overseas investors to seek opportunities in UK
3) British Airways set to back-pedal on scrapping Gatwick flights – The airline is set to reverse a decision over short-haul flights from the London airport, the Telegraph can reveal
4) Britain’s inflation surge threatens to eclipse eurozone’s – Prices could spiral for longer than predicted, warns ex-IMF chief economist, amid squeeze on disposable incomes
5) Ovo circles rival Bulb amid energy price squeeze on suppliers – Firm seeks more deals amid energy crisis after buying SSE’s retail unit to become UK’s third largest household energy firm
What happened overnight
Asian markets were mixed on Monday, with Shanghai closed for the National Day holiday.
Hong Kong’s benchmark shed more than 2pc after troubled property developer China Evergrande’s shares were suspended from trading.
The company did not say why, but a Chinese financial news service, Cailian, said another major developer was planning to buy Evergrande’s property management unit.
Evergrande is struggling to make payments on tens of billions of dollars worth of debt as it endures a cash crunch brought on by a tightening of Chinese government restrictions on debt-leveraged financing.
The Hang Seng sank 2.3pc to 24,011.72 while Tokyo’s Nikkei 225 dropped 1.1pc to 28,457.15. Shares also fell in Taiwan. Australia’s S&P/ASX 200 climbed 0.8pc to 7,246.10.
Markets were closed for holidays in Shanghai and South Korea.
Coming up today
Corporate: Nothing major on agenda
Economics: Opec meeting, factory orders (US)
