A week that started with investors in a spin over the Chinese property market is ending on a flat note, amid uncertainty about whether the debt-laden developer Evergrande has met its latest interest payment.
There was no announcement from the company after yesterday's deadline passed.
Markets took the latest developments in their stride, partly in view of there being a grace period of at least 30 days before any default can be declared.
Elsewhere, cryptocurrencies and stocks with significant exposure to the market are coming under pressure after China’s central bank declared the entire sector “illegal”.
FTSE 100 live Friday
China declares cryptocurrencies ‘illegal’, rocking the market
Evergrande misses debt repayment deadline
Winter fears hit consumer confidence
FTSE 100 loses momentum
Cancer trial boosts AstraZeneca shares
JD Sports falls after Nike warning
Outsourcer Mitie lifts profits hopes
FTSE ends down amid Evergrande fears but still up this week
17:09 , Oscar Williams-Grut
The FTSE 100 has closed down 26 points, or 0.4%, at 7051. The index is up around 159 points from Monday, despite jitters in global markets all week about the financial position of Chinese real estate giant Evergrande.
Here are the main stories in the market this Friday:
• Bitcoin and other cryptocurrencies have dropped sharply after the People’s Bank of China declared all cryptocurrency transactions illegal.
• Evergrande, which has over $300 billion in debts, has missed a repayment deadline, reviving fears that the company could default on debts and set off a domino effect for the Chinese economy. Analysts at Bank of America this afternoon downplayed the problem: “Evergrande is not Lehman Brothers. Chinese credit markets are not like the US. And Chinese policy can turn on a dime.”
• Shares in cinema chain Cineworld have hit a 2-month high on anticipation of strong ticket sales for the new James Bond movie.
• In The Style’s stock has crashed on AIM after a profit warning. The company said supply chain disruption was hitting its business.
• The head of the Confederation of British Industry (CBI) has called on the government to set up an emergency committee to address the constellation of issues facing the economy, including driver shortages, soaring electricity costs, and inflation. It comes as some petrol stations have been forced to shut due to a shortage of fuel tanker drivers.
• Peel Hunt has been valued at £280 million in its AIM flotation. Shares in the stock broker begin trading next week.
• Mexican chain Tortilla has joined the flood of companies coming to market, announcing plans to list on AIM.
That’s all from us this week. Have a great weekend and we’ll see you again on Monday.
Bitcoin recovers slightly
16:00 , Oscar Williams-Grut
Bitcoin has recovered from its lows of the session, rallying after a slump on news that the People’s Bank of China had declared cryptocurrency illegal.
Bitcoin is currently down 3.8% at $42,434. It had been down as much as 5%.
Constantine Tsavliris, a researcher at Crypto Compare, says: “We witnessed a sell-off in May/June and a shift in mining away from China, followed by a swift recovery throughout July/August. We are likely to see a similar short-term sell-off as negative news presses investors to take a conservative approach.
“However, in the longer-term, given the current mining shift away from China and the strong market recovery we have seen in previous months, we expect markets to recover once again.”
Cineworld shares reach two-month high as cinemas begin to see Bond boost
15:31 , Naomi Ackerman
Cineworld has had a turbulent year. But the world‘s second-biggest cinema chain saw its shares reach a two-month high on Friday amid great anticipation and healthy ticket sales for Daniel Craig’s final outing as 007.
UK Cinema Association chief executive, Phil Clapp, has told the Standard that after the last 18 months cinema operators’ anticipation for the latest installment’s long-delayed release - and its revenues - is “higher than ever”.
Cineworld revealed an eye-watering $3 billion 2020 loss in March, and its shares have almost halved in the intervening months.
But on Friday the FTSE 250 firm saw its shares rise as much as 8% in early trading, before settling back nearly 5% up at 71.5p - their highest since early July.
Read the full story here
Hillary Clinton shares tips for being a successful female leader at London Tech Week
15:23 , Naomi Ackerman
Hillary Clinton has urged London‘s aspiring female business and tech leaders to be “determined and resilient” when they get knocked down.
Appearing in person at the capital‘s County Hall on an AccelerateHER panel session at London Tech Week, the former US Secretary of State and presidential candidate said: “You just have to constantly be both determined and resilient, because you will get knocked down - even if it’s done with a smile instead of a sneer.
“And you will have to get back up.”
The former First Lady, who has faced sexism and adversity in her career, spoke about her personal journey and shared advice alongside I. Stephanie Boyce, the first black president of The Law Society, McKinsey’s UK managing partner, Virginia Simmons, and the Microsoft UK CEO, Clare Barclay.
Clinton concluded: “Never give up - if you want something you’ve got to prepare for it, and you often have to prepare more than someone else to be considered - and keep going, no matter what the obstacles or the setbacks.”
In its eighth year, London Tech Week is an annual event of celebration and networking for the capital’s tech scene. Speakers and attendees include founders of some of the UK’s biggest technology companies, ministers and investors.
Shell seeing ‘increased demand’ at the pumps
14:59 , Oscar Williams-Grut
Reports of supply chain problems in the petrol sector have prompted some people to start panic buying fuel across the UK, despite calls not to from both the industry and government.
Shell has said this afternoon it is seeing “increased demand” at some of its sites leading to “larger queues”.
A spokesperson said: “We are seeing an increased demand today for fuel at some of our stations, which may in some instances result in larger queues. We are adapting our delivery schedules to ensure sufficient supplies for our customers.”
Shares are up 0.4% in London, helped higher by rallying oil prices rather than the goings on at the forecourts.
Cryptocurrencies rocked as China declares market ‘illegal’
12:35 , Oscar Williams-Grut
Cryptocurrencies sunk today after the People’s Bank of China declared the market illegal.
China’s central bank said all forms of cryptocurrency transactions were illegal and should be banned in a Q&A posted on its website, Bloomberg reported. Offshore providers of crypto services to Chinese citizens are also in violation of the law, PBoC said.
The language signalled a stepping up of China’s crackdown on cryptocurrencies and sent prices sinking across the market. Bitcoin, the world’s biggest crypto token, fell as much as 5%.
Ethereum, the second biggest token, dropped 6.3% to $2,888. Cardano was 2.4% lower at $2.15, Solana sunk 6.9% to $134, and Litecoin lost 5.9% to $149. The broad market was down around 4%, according to data from CoinMarketCap.com.
Stocks with significant exposure to cryptocurrency suffered. Coinbase, the US cryptocurrency exchange, sunk 3.6% in the pre-market in New York and crypto miner Argo Blockchain sunk 10% in London.
James Butterfill, investment strategist at Coinshares, said the price moves were relatively modest compared to similar instances in the past.
“The market is getting more and more used to this rhetoric from China,” he told the Standard.
Tortilla chain cooks up float plan
11:37 , Joanna Bourke
Casual dining chain Tortilla, which has 62 sites worldwide, plans to float on London’s junior market next month.
The company, which has 26 of its branches in the capital, is expected to be valued in the region of £70 million.
Emma Woods, the former boss of Wagamama has been appointed non-executive chair, and Hollywood Bowl’s finance chief Laurence Keen will be non-executive director.
Read the full story HERE.
Oil stocks unmoved by petrol station issues
11:06 , Oscar Williams-Grut
Shares in BP and Shell rose today, despite a shortage of lorry drivers forcing some petrol stations to close.
BP rose 0.1% in London and Shell was 0.3% higher. Both were boosted by oil prices near 3-year highs.
BP has been forced to close a small number of petrol stations after a shortage of lorry drivers left sites low on fuel. The shortages have prompted crisis meetings in government and public calls for Brits not to panic buy.
The petrol station industry has downplayed the issues.
“By and large most other companies seem to be operating and open for business fine,” Gordon Balmer, executive director of the Petrol Retailers Association, told the Standard.
In The Style out of fashion in the City as it cautions on profits
10:24 , Joanna Bourke
Online womenswear retailer In The Style, know for its collections with celebrities such as Stacey Solomon, today cautioned on profits amid supply chain disruption.
Shares in the AIM-listed firm plunged more than 14%, or 28.26p to 167.74p despite it cheering a 45% sales leap in April to August from a year earlier.
It has benefited from higher demand for occasionwear as people returned to social events.
But In The Style is grappling with headaches. Read the full story HERE.
City broker Peel Hunt to float in £280m deal
10:13 , Oscar Williams-Grut
CITY broker Peel Hunt today cashed in on the pandemic boom in trading and dealmaking in a float that values the business at £280 million.
The small and mid-cap broker raised £112 million in a listing that will turn many of its 250 staff into paper millionaires.
Chief executive Steven Fine had a 7% stake prior to the sale that would now be valued at nearly £20 million.
The staff and directors owned towards 70% of the business, but advisers insist most of them are hanging on to their equity.
FTSE 100 set for positive week
10:05 , Graeme Evans
A week featuring a China debt crisis and big developments on monetary policy is ending with the FTSE 100 still higher than where it started, despite some weakness today.
Monday's market sell-off due to contagion fears triggered by a potential debt default at property giant Evergrande lasted only a day before a rebound that has largely withstood the latest announcements from the US Federal Reserve and Bank of England.
Rising inflationary pressures mean earlier-than-expected moves on tightening monetary policy are now on the cards, sending bond yields higher and lifting sterling off a one month low.
The impact on dollar earning stocks has put some pressure on the FTSE 100 towards the end of the week, but the top flight is still more than 1% above Monday's opening mark after today's dip of 20.19 points to 7,058.
The weak ending reflects continued uncertainty over the plight of Evergrande as a deadline for its latest interest payment passed with no announcement from the company. There's now a grace period of at least 30 days before any default can be declared.
London's fallers board was led by JD Sports Fashion after Nike's Wall Street shares fell 4% following a warning on the revenues impact of supply chain issues in Vietnam.
JD's shares were 23p cheaper at 1,106p in a session when Rentokil Initial and Rightmove shares also fell 2% in the top flight.
AstraZeneca led the risers board after reporting positive results in its late-stage trial for blockbuster drug Lynparza in the treatment of advanced prostate cancer. Shares rallied 3%, while there was a further gain for a resurgent Rolls-Royce, up 2.7p to 129.64p.
The FTSE 250 index fell 120.03 points to 23,710.15, despite a surge of 3% for outsourcer Mitie after upping its profit guidance to around £150 million on the back of a string of Covid-linked contracts and uptick in cleaning work from the return to office.
JD Sports out of step
09:30 , Graeme Evans
JD Sports Fashion shares posted the biggest fall in the FTSE 100 index as investors reacted to last night's revenues warning from sportswear giant Nike.
The US company said it had been impacted by Covid-related factory closures in Vietnam, meaning that full-year revenues growth will be in the mid-single-digits rather than a low double-digit percentage previously forecast.
Nike shares were down almost 4% in after-hours trading in Wall Street, despite reporting a year-on-year rise in revenues of 16% for the quarter to the end of August.
The read-across sent JD shares down 27.5p to 1,101.5p, although they are still almost 10% higher over the past month. The company, which started life with one store in Bury in 1981, now has a considerable US presence as part of a global estate of over 2,600 stores generating annual sales of more than £6 billion.
FTSE 100 lags despite Astra surge
08:40 , Graeme Evans
The robust recovery of the FTSE 100 since Monday's sell-off is showing more signs of running out of steam after the top flight fell 17.65 points to 7,060.70.
Transatlantic retailer JD Sports Fashion led the fallers board with a 3% decline, while Asia-focused stocks were back under pressure as Prudential and Standard Chartered dipped more than 1%.
AstraZeneca propped up the top flight after reporting positive results in its late-stage trial for blockbuster drug Lynparza in the treatment of advanced prostate cancer. Shares rallied 3%, while there was a further gain for a resurgent Rolls-Royce, up 1.8p to 128.7p.
The FTSE 250 index fell 89.61 points to 23,740.57, despite a surge of 3% for outsourcer Mitie after it upped its profit guidance to around £150 million on the back of a string of Covid-linked contracts and an uptick in cleaning work from the return to office.
Property giant Landsec announces two retail park sales
08:37 , Joanna Bourke
Property developer and landlord Land Securities has agreed to sell two retail parks, in a move that will help contribute funds to its focus on London projects.
The company said the disposals of sites in Cumbria and Blackpool total £54.3 million, marking a 15% premium to their March book value.
Landsec chief executive Mark Allan last October said the company, which has a £10.8 billion property portfolio, would look to exit retail parks, leisure and hotels and focus on central London, including offices.
Read the full story HERE.
Consumer confidence in decline
08:16 , Graeme Evans
Households are increasingly anxious about a winter cost of living crisis after the latest Gfk consumer confidence index showed a sharp fall in September.
The barometer decreased five points to -13 in September, although that's still better than the -25 seen for the same month last year.
The survey included a big deterioration in the view of the general economic situation over the next 12 months, as well as in the prospects for people’s own personal financial situation.
The survey comes against a backdrop of rising prices for fuel and food, empty shelves due to supply chain disruption and the end of the furlough scheme.
Joe Staton, client strategy director at GfK, said: “All measures have declined this month and consumers are clearly worrying about their personal financial situation and the wider economic prospects for the year ahead.”
The index also records a fall in the major purchase index, which is bad news for hard-pressed retailers looking to build sales as they go into the key holiday period.
Staton added: “When consumer confidence drops, shoppers tend to spend less, and this dampens the overall economic prospects for the UK. This really is an unwelcome picture going into 2022 and beyond.”
Bond yields rise
07:57 , Graeme Evans
Yesterday's session saw a sharp rise in bond yields after policymakers at the Bank of England and US Federal Reserve this week signalled earlier-than-expected moves towards the tightening of monetary policy.
Yields on 10-year US treasuries hit a three-month high at 1.430% and the UK 10-year gilt rose to the highest level since the pandemic began after the Bank of England said inflation was likely to peak well above 4% by the year end, and that a “modest tightening of monetary policy” might be required in the not-too-distant future.
The global yield rise was also driven by Norway yesterday becoming the highest profile developed country to raise interest rates in this cycle.
The developments helped boost the value of bank shares, with Lloyds Banking Group among those higher yesterday on expectations for a margins boost from rising interest rates.