Global markets showed signs of steadying today after Friday's violent reaction to the discovery of the Covid omicron variant.
The FTSE 100 index, which slumped 3.6% before the weekend, rallied as investors “bought on the dip” despite continued uncertainty about the impact of the variant.
Brent crude futures skidded 11% on Friday but are trading 5% higher at $76.30 this morning.
The corporate focus is on BT after reports that India's Reliance is mulling a bid sent its shares 7% higher.
FTSE rebounds from omicron sell-off
Twitter jumps as Jack Dorsey steps down
BT rises on bid speculation
Amigo Loans crashes on last ditch rescue plans
FTSE 100 closes higher as Omicron panic eases
17:05 , Oscar Williams-Grut
The FTSE 100 has closed 66 points higher, or up 0.9%, at 7109.
London’s topflight index was in the green the entire day, boosted by a bounce back from Friday’s Covid omicron panic.
BT topped the index on bid speculation. The Economic Times reported that India’s oil-to-telecoms conglomerate Reliance Industries is weighing up a possible approach.
The newspaper said an offer was among a range of options under consideration, including a plan to fund BT’s fibre roll-out division Openreach. Reliance flat out denied the report but it fuelled pre-existing speculation that BT is in play. There is onging speculation over the intentions of billionaire and Altice founder Patrick Drahi, who took a 12% stake in BT earlier this year.
Shell rose 2.4% and BP rose more than 3% as oil prices rebounded.
That’s all from us on the blog today, join us again tomorrow.
Jack Dorsey confirms exit from Twitter
16:41 , Oscar Williams-Grut
Jack Dorsey has confirmed he is leaving Twitter after 16 years.
Dorsey tweeted his internal message to staff announcing his departure, shortly after CNBC first reported the news. CTO Parag Agrawal replaces Dorsey as CEO from today.
Shares jumped on the initial repot but are now trading down about half a percent in New York.
Victoria Scholar, Head of Investment, interactive investor, said: “Twitter’s stock has been struggling lately, shedding more than 45% since the February high, with shareholders hoping that Agrawal can restore confidence in the tech giant after its latest earnings disappointed with revenue guidance and monetizable daily users falling short of Wall Street’s expectations, sending shares down double digits on the day.”
Santander poaches new boss from Yorkshire Building Society
15:00 , Oscar Williams-Grut
Santander has appointed Mike Regnier to lead the Spanish banking group’s UK business, subject to regulatory approval.
Regnier will join from Yorkshire Building Society, which he has led since 2017. He has more than 25 years’ financial services and retail experience, including at Lloyds Banking Group, Halifax and Asda. He started his career as a management consultant.
Regnier succeeds long-standing UK boss Nathan Bostock who takes on a wider group role, head of investment platforms at Banco Santander.
Twitter jumps on report Jack Dorsey to step down
14:34 , Oscar Williams-Grut
Shares in Twitter have leapt higher after CNBC reported that founder Jack Dorsey is to step down.
The US financial news channel said Dorsey, who also runs payment company Square, was expected to announce he was stepping back from executive duties shortly. Activist investor Elliott Management pushed for this change last year.
Shares in Twitter opened over 10% higher in New York.
Elsewhere, Wall Street has joined the global bounce back from Friday’s omicron sell-off. The S&P 500 has opened 1.1% higher, the Dow is up 0.8% and the Nasdaq is 1.3% higher.
Omicron changes Bank of England calculations
14:15 , Oscar Williams-Grut
The markets have changed their thinking on Bank of England rate hikes after the emergency of the new Omicron strain on Covid-19.
Markets are now pricing in a two in three chance UK base rate will remain on hold in December, according to AJ Bell. 80% expect a February rate rise instead.
Laith Khalaf, head of investment analysis at AJ Bell, says: “The Omicron variant has punctured expectations of a Christmas rate hike, with February now emerging as the frontrunner to stage the much anticipated tightening of UK monetary policy.
“Markets had really got ahead of themselves in so confidently predicting a 2021 rate rise, no doubt egged on by some hawkish rhetoric from the Governor of the Bank of England. But it was always going to be risky for the Bank to raise rates this year, with the heightened chance of a resurgence in the pandemic over the winter months, and employment data beyond the furlough scheme only just becoming available.”
Cinch-owner in £323 million swoop for Marshall Motors
14:00 , Oscar Williams-Grut
The owner of WeBuyAnyCar.com and Cinch, advertised by TV’s Rylan Clark-Neal, left, today made a £323 million swoop for dealership Marshall Motors. Digital used-car marketplace Constellation Automotive Group will add 164 franchises covering 27 brands if its move for AIM-listed Marshall Motor Holdings is successful.
The 400p-a-share offer already has the backing of Cambridge-based Marshall Group, which owns 64% of the dealership business alongside its operations in aerospace and defence.
Marshall Motor’s shares jumped 43%, or 118p, to 392p.
The stock had been trading below 150p a year ago, but has soared on the back of a series of profit upgrades triggered by soaring used-car values.
The deal fuelled consolidation hopes across the sector. Shares in Pendragon, Lookers and Vertu Motors all rose by about 4% today.
13:44 , Oscar Williams-Grut
Sub-prime lender Amigo saw its stock crash further today after the company warned investors face being heavily diluted by last ditch rescue plans.
Amigo said it was working on new compensation plans for customers who were missold its guarantor loans. Previous plan were rejected by both the regulator and the High Court on the grounds that payouts were too low.
The new redress scheme will still only offer partial payment but will be more generous. Amigo will ask investors for more cash to fund the new plan and warned that this could lead to “material dilution” for shareholders, leaving them “owning a much smaller proportion of the group if they do not take up their rights.”
Shares in the already embattled lender crashed 3p, or 28%, to 7.6p. The stock was trading as high as 297p in December 2018.
FTSE rebound gathers pace
13:00 , Oscar Williams-Grut
The FTSE 100’s rebound from Friday’s sell-off continues to gather pace.
London’s topflight index is up 90 points to 7134 this lunchtime. The index is being higher by BT on bid speculation. Johnson Matthey isn’t far behind, boosted by reports that India’s Tata is in talks to buy the company’s battery business.
Businesses caught up in Friday’s slump are rebounding too. British Airways owner IAG is up 3.3%. Shell and BP are both up around 3.9%, boosted by rallying oil prices.
Travelodge revenues get lift from UK staycation trend
12:40 , Joanna Bourke
The company, behind 593 hotels, said sales in the three months to September 30 reached £229.5 million, compared to £88.2 million a year earlier when travel restrictions severely hurt the leisure sector. The performance was better than the pre-Covid performance of £208.8 million.
Revenue per room stood at £53.54, an improvement on the two prior years.
Read more HERE.
Reliance denies BT bid report
12:13 , Oscar Williams-Grut
India’s Reliance Industries has denied a report in The Economic Times claiming it was mulling a bid for the business.
Reliance said: “We categorically deny any intent to bid for the UK telecoms group, BT, formerly British Telecom, as reported in the article titled “Reliance Mulling Bid for UK’s Telco BT Group” published in The Economic Times dated November 29, 2021. The article is completely speculative and baseless. We expect greater diligence and verification of facts before publishing such articles.”
Shares in BT are still higher, though not as high as they were earlier in the session. The telecoms company is up 8.9p, or 5.8%, at 162.8p.
Wetherspoons signs 20-year on-tap deal with Budweiser in shift away from Heineken
10:03 , Naomi Ackerman
JD Wetherspoon has signed a new 20-year supply deal with AB InBev's Budweiser, marking the end of a four decade-long arrangement between the pubco and brewing giant Heineken.
The deal will see Budweiser become the Wetherspoons' largest supplier from December 15. Heineken will stop supplying Wetherspoons with draught beers, but is in discussions over supplying bottled beers.
Shares in Wetherspoons rose 2.2%, or 20p, to 911.8p this morning.
Read the full story here
Irn Bru maker A G Barr lifts profits expectations as sales recover faster than expected
09:56 , Naomi Ackerman
Irn Bru maker A.G. Barr today raised profits expectations on the back of stronger-than-expected sales in both hospitality and "on the go" retail as Britons headed out this autumn.
The listed company, which also owns juice brand Rubicon and pre-made drinks and mixer offering Funkin Cocktails, said it now anticipates full-year revenues of £264 million and pre-tax profits of £41 million for the year to January 22 2022 - exceeding current market expectations of around £255 million and £38 million respectively.
The firm said its supply chain and production have remained "resilient" in the face of well-documented disruption and price hikes, and bosses expect the sales momentum to continue into next year.
A.G. Barr had seen pre-tax profits dip by 12% to £32.8 million last year as the pandemic hit trade. Around 10-14% of its pre-Covid sales came from hospitality.
Shares surged as much as 4.7%, or 22p, to 490p, on the update.
AJ Bell rises on new app plans
09:19 , Oscar Williams-Grut
Shares in City stockbroker AJ Bell have risen after the company announced plans to launch a new app pitched at first-time investors.
AJ Bell is launching a new commission-free investment app called Dodl. The app, set to launch in the first half of 2022, will let investors buy a range of stocks and funds through their phones, as well as packages of “themed investments” covering areas such as healthcare, robotics, and ethical investing.
The look of the app — and the fact it is commission-free — suggests it will compete with the likes of Freetrade, a start-up UK investment app popular with millennials. Freetrade, founded in 2016, recently reached £1 billion in assets under management. It has benefitted from a boom in amateur investment during lockdowns.
London market recovers, IAG 1% higher
08:27 , Graeme Evans
The FTSE 100 index has recouped some of Friday's hefty losses, with the top flight trading 75.79 points or 1% higher at 7119.82.
Investors “buying on the dip” helped caterer Compass and exhibitions firm Informa to rebound 3%, while there was also an improvement of 2% for BP as oil prices firmed.
Hedge fund boss Bill Ackman said on Twitter earlier: “While it is too early to have definitive data, early reported data suggest that the omicron virus causes ‘mild to moderate’ symptoms (less severity) and is more transmissible.
“If this turns out to be true, this is bullish for the equity market and bearish for the bond market.”
Rolls-Royce and British Airways owner IAG improved by just 1%, reflecting the weekend roll-out of tougher travel restrictions in response to the new variant. Their shares skidded by double digit percentages on Friday.
BT shares jumped 7% following speculation that it is in the takeover sights of India's Reliance.
BT bid talk continues
08:01 , Graeme Evans
BT continues to attract takeover speculation after the Economic Times reported that India's oil-to-telecoms conglomerate Reliance Industries is weighing up a possible approach.
The newspaper said an offer was among a range of options under consideration, including a plan to fund BT's fibre roll-out division Openreach.
The potential interest comes amid onging speculation over the intentions of billionaire and Altice founder Patrick Drahi, who took a 12% stake in BT earlier this year.
BT has declined to comment on the latest report.
FTSE 100 rallies after Friday slump
07:39 , Graeme Evans
Friday's 3.6% slump for the FTSE 100 index is expected to be followed by a steadier session today as traders digest weekend developments concerning the omicron variant.
CMC Markets is expecting another bumpy ride this week, but for now is forecasting that London's top flight will open 64 points higher at 7108.
Chief markets analyst Michael Hewson said: “Initial reports out of South Africa would appear to suggest that despite the number of mutations currently identified, there have been no reports of hospitalisations or deaths as a result of anyone being diagnosed with this variant, which throws into sharp focus why last week’s market reaction was so violent.
“It is of course still very early days, amidst the uncertainty around treatment and vaccine efficacy of this new strain, and while it may well be more transmissible, that doesn’t necessarily mean it is more deadly, with initial reports suggesting symptoms are “unusual but mild” in nature.
“This could help explain why markets in Europe look set for a rebound this morning.”
Brent crude futures rallied 4% to $75.75 a barrel, having slumped by 11% on Friday amid fears that more Covid restrictions will undo the recovery of air travel and the wider global economy.
The developments will complicate life for Opec ministers, who are due to consider this week whether to stick by their plans to increase monthly production by 400,000 barrels a day.
President Biden and other world leaders have called on the Opec alliance to step up output in order to curb recent inflationary pressures.