Yahoo Finance FTSE 100 Live: Oil prices rise, Metro Bank soars 20% after fundraising deal
FTSE 100 ends the day little changed overall as markets hold their nerve over Middle East tensions
16:54 , Michael Hunter
London’s main stock market index was unchanged overall on Monday, after steady trade on Wall Street underlined a measured reaction to the sudden spike in geopolitical tensions over the weekend.
The FTSE 100 slipped back by a single point to 7493.73, with travel stocks making some of the biggest falls as oil prices headed back toward $90 a barrel. IAG, the parent of British Airways, was down 10p to 147p. Tui, the tour operator, fell 26p to 410p. EasyJet lost 26p to 423p.
As regular European trading hours ended, Brent crude oil was up over $3 to $87.86.
But the biggest single faller of the session fell after a profit warning. Speciality chemicals maker Croda International tumbled by over 350p to 4444p after it warned of a slowdown in demand and cut earnings annual forecasts by a fifth.
Support for the overall market came from oil firms and defence contractors. The leaderboard was topped by BAE Systems, up 44p to 1025p. BP gained 15p to 520p.
Wall Street starts with modest losses led by travel companies as US stock markets hold their nerve
14:51 , Michael Hunter
The relatively measured reaction on global markets to the shock flare-up of tensions over the weekend in the Middle East reached the start of New York trade.
Wall Street’s S&P 500 opened down by around 17 points to 4,291.88, a drop of 0.4%. With the spike higher in geopolitical tension sending oil prices back toward $90, and sending a frisson of unease through dealing rooms, travel stocks fell furthest.
Cruise line Carnival was the biggest single faller on the broad index, down over 5%. Delta Airlines was down just under 5%. The entire list of the 10 main decliners in initial trade were travel stocks, including Hilton Hotels and Booking
At the other end of the market, oil majors and defence contractors made the biggest gains.
Aerospace stock Northrop Grumman topped the leaderboard, up over 9%. Lockheed Martin was up just shy of 8%. Oil firms Schlumberger rose almost 4% and Halliburton was up 5%.
New York shares set to slip with defence firms and oil majors are called higher
13:23 , Michael Hunter
Flaring tensions in the Middle East after the attacks over the weekend on Israel by Hamas are keeping traders on global markets cautious, amid a largely measured response to a lingering sense of geopolitical crisis.
With attention on European trading floors turning toward the start of the US day, futures trade was pointing to an opening fall of under 30 points for the broad-based S&P 500, taking it to around 4315.00 points. That would amount to a slip of 0.6%.
And gains were expected for major defence contractors and oil companies. Exxon Mobil and Lockheed Martin were both heading toward opening gains, of about 2% and 5% respectively.
Spotify, the online music platform, was on course for a drop of around 2% after a broker downgrade. Tesla lwas heading for a 1% drop after data in China revealed a slowdown in electric car sales there.
New acquisition for estate agent Dexters
11:46 , Simon Hunt
London estate agency chain Dexters has snapped up lettings and property management specialist LiFE Residential in a move that will give it an overseas presence for the first time.
Fast growing Dexters, which has already spent around £75 million on acquisitions, paid an undisclosed sum for LiFE Residential, which has eight offices in London, Birmingham, Singapore and Hong Kong.
It currently manages around 5,000 properties across London and specialises in new build property and providing asset management services for property investors including many overseas buyers.
Natural gas futures jump 14% amid Israel conflict
11:06 , Simon Hunt
UK Natural gas futures have risen as much as 14% today amid concerns over Middle East tensions sparked by a Hamas attack on Israel.
The escalation has also sent oil prices up, by around 3%, sending Brent crude back toward $90 a barrel and putting the prospect of $100 a barrel oil back on the agenda among City experts,
Natural gas rose steadily throughout morning trade, before coming off a peak in the early afternoon.
And while the rise was notable, it nonetheless left prices around the multi-month lows seen since June.
But Oil analysts now worry that the US will impose sanctions on Iran, which will hit oil exports and send the oil price higher. While such sanctions already exist, they have been lightly enforced under the Biden administration.
Tougher action could send Brent crude above $100 a barrel, analysts warn, a blow to both motorists and the wider economy.
Callum Macpherson, head of commodities at Investec, said: “The tragic events in Israel over the weekend have led to comparisons with the Yom Kippur war and the ensuing oil embargo and oil crisis in the 70s, but this is probably a bit of an exaggeration.
“Israel is at war with a militant group now, not a collation of Arab states as it was then. Hamas does have the backing of Iran, of course.”
Retail stocks under pressure, FTSE 250 down 0.5%
10:10 , Graeme Evans
Shares in Next and Primark owner AB Foods wilted in the autumn sun today after a leading City bank placed the pair on “negative catalyst watch”.
The caution of JPMorgan analysts was the last thing the sector needed after weekend weather more suited for selling t-shirts and summer dresses than coats and jumpers.
Next shares slumped 3% or 210p to 7004p, while AB Foods retreated 29.5p to 1955p during a bleak session for stocks across the retail sector.
Marks & Spencer, which last month rejoined the FTSE 100 after a strong run for shares, fell back 4.3p to 226.1p and JD Sports Fashion lost 3p to 140p.
The retail quartet were joined on the fallers board by British Airways owner IAG, but the wider blue-chip index rose 15.13 points to 7509.71 amid strength for oil and defence stocks including BP and BAE Systems.
Other fallers included Aviva, which dropped back 3.2p to 405.8p after Friday’s big jump triggered by speculation that it is a takeover target as well as a potential buyer of RSA’s remaining UK consumer business.
UBS analysts today reiterated a price target of 480p for Aviva, adding that its own calculations pointed to a takeover valuation range of between 525p and 680p a share.
In contrast to London’s top flight, the FTSE 250 index fell 0.5% or 91.29 points to 17,641.03. Stocks under pressure included luxury car firm Aston Martin Lagonda, which dropped 4% or 9.2p to 240.4p after JPMorgan cut its price target to 329p.
On AIM, Volex shares fell 4% after the performance-critical power products firm disclosed details of a cyber attack.
The company, which has 27 manufacturing sites in 24 countries, said disruption to production has been minimal and that it continued to trade with customers and suppliers.
Shares in the Basingstoke-based company, whose executive chairman and major shareholder is Nat Rothschild, fell 13p to 297.5p but are still a fifth higher in the year to date.
Elsewhere, the sofa retailer ScS rose 8p to 175p after it delayed tomorrow’s annual results to 25 October but said the figures will be in line with the update given in early August.
AA membership rise helps drive its profits north
10:08 , Michael Hunter
Roadside rescue service The AA reported a rise in its number of members today, helping it drive revenue and profits north.
It now has almost 3.3 million personal members, up 1% in the first half for the year to the end of July. Corporate memberships rose 12% to almost 11 million.
That makes the insurance group, famed for its bright yellow mobile mechanics’ vans, the biggest provider of breakdown cover in the country. Revenue in the period rose 8% to £524 million, with earnings up 2% to £172 million.
The income it received per personal member rose 4% to £194, “substantially offsetting our cost to serve,” it said.
“Continued growth in our membership and customer base along with increasing income paid per personal member has enabled us to deliver growth in both our earnings and operating cashflow,” it added in a statement issued with the results.
Once owned by its members, the AA demutualised in 1999, and was listed on the stock exchange in 2014 before being bought for around £220 million in 2021 by its current private equity owners, a consortium led by Warburg Pincus and Tower Brook Capital.
During its time on the stock exchange the AA struggled with a heavy debt burden, a factor that weighed on its stock. Today, it said it paid back £550 million of debt early.
Next shares sink on JPMorgan earnings warning
09:39 , Bloomberg
Shares in Next fell as much as 3.4%, the most in three months, after JPMorgan placed the UK retailer on negative catalyst watch ahead of its November earnings release.
Unseasonably warm weather has dragged on clothing retailers as they launch autumn/winter product lines, analysts said.
JPMorgan added it was “concerned” that the benefits of pent-up demand in European retail “could start to wane, and that clothing price deflation could also weigh on top-line forecasts into 2024.”
Analysts react as Middle East conflict sparks risk-off sentiment
08:56 , Simon Hunt
Victoria Scholar, Head of Investment, interactive investor, said: “The Middle East conflict is dictating price action on Monday with European bourses opening mostly lower.
“The FTSE 100 is bucking the trend, eking out a modest gain driven by defence giant BAE Systems which has rallied to the top of the index amid expectations of increased defence spending. BP and Shell are also outperforming on the back of rising oil prices and Fresnillo is staging gains as investors flock to safe havens like silver and gold. British Airways’ parent company IAG has plunged over 5% amid a raft of flight cancellations to and from Tel Aviv.
“As the war enters its third day, risk-off sentiment is gripping markets, lifting safe-haven assets like gold, silver, treasuries, the US dollar, and the Japanese yen. Meanwhile investors are selling riskier equities with US futures pointing to a weaker open.”
Metro Bank shares soar 20% after funding deal
08:37 , Simon Hunt
Shares in Metro Bank soared 20% as markets opened this morning after the bank secured fresh financing in an 11th hour deal.
The high street bank worked over the weekend to secure a £325m capital raise, comprising £150m of new equity, alongside £600m of debt refinancing.
Jaime Gilinski Bacal’s Spaldy Investments, Metro Bank's largest shareholder, is contributing £102m, becoming the controlling shareholder of Metro Bank with a c.53% shareholding.
The PRA said of the deal that it “welcomes the steps taken by Metro Bank to strengthen its capital position.”
Oil up 3%; BAE up 3% as Israel conflict sparks fears
08:22 , Simon Hunt
Oil rose as much as 3% this morning on fears of an escalating conflict in Israel after an unexpected attack by Hamas. BAE shares were also up 3%.
Here’s a look at your key markets data this morning:
Nat Rothchild’s Volex sinks 5% after cyberattack
08:09 , Simon Hunt
Shares in Nat Rothchild’s Volex fell as much as 5.5% this morning after the electricals manufacturer disclosed details of a cyber attack.
Volex said the cyber incident had resulted in unauthorised access to certain IT systems and data, at some of the firm’s international sites.
Volex said it took immediate steps to stop the unauthorised access to its systems and data, adding that disruption to production was minimal.
Nat, who is part of the Rothschild family dynasty, contols around a quarter of the share capital of the business, with the stake valued at around £140 million.
Chemicals firm Croda warns on profits
07:54 , Michael Hunter
Speciality chemicals firm Croda International issued a profit warning today, in part due to a summer slowdown in sales at its Beauty Care business.
The ingredients maker –which supplies a range of industries from cosmetics to crop protection – warned shareholders it now expected annual profits to be in a range between £300 million and £320 million, down from £370 million and £400 million.
The Yorkshire-based company said its Industrial Specialities business was not expected to be profitable in the second half of the year, although its Beauty Care sales improved in September.
It said it was “seeking efficiency savings from simplifying business processes and ways of working,” adding:
“Customers have continued to reduce their ingredient inventories in consumer care, crop and industrial end markets, due to a combination of destocking and a weaker demand environment. This has continued to depress sales volumes and our overall performance [from 1 July to 30 September] was therefore weaker than originally anticipated.”
Shares fell 400p to 4395p in opening trade.
Metro Bank unveils £925m fundraising move
07:53 , Graeme Evans
Metro Bank last night unveiled a deal to shore up its finances, including a £325 million capital raise and £600 million in debt refinancing.
The equity raise is being led by Spaldy Investments, which is contributing £102 million in a move that gives it a 53% shareholding once the restructuring is complete.
Spaldy’s founder is Colombian billionaire Jaime Gilinski Bacal, who has been an active investor in Metro in 2019.
The fundraising is priced at 30p a share, which compares with the 45p seen on Friday and the near to 60p seen at the start of last week.
Metro Bank chief executive Daniel Frumkin said the fundraising marked a new chapter for the bank, adding that the Metro made a profit in the third quarter of the year.
Oil prices higher, FTSE 100 seen flat
07:28 , Graeme Evans
Oil prices have risen sharply in response to the violence in the MIddle East, with the safe haven asset of gold also 1% higher in trading this morning.
Brent Crude futures are up by more than 3% at $87.39 to reflect heightened geopolitical risk, putting back some of the benchmark’s recent heavy losses caused by a weaker demand outlook.
Futures trading points to a broadly flat start for the FTSE 100 index, having closed 0.6% higher on Friday. US markets finished last week strongly, even though a robust jobs report boosted the chances of a further interest rate rise by the Federal Reserve.
The US economy added 336,000 jobs in September, double the number expected while August was revised up to 227,000. This pushed long-term yields sharply higher, with the US-10 year and 30-year yield hitting fresh 16-year highs.
In Asia, Hong Kong’s Hang Seng has resumed trading in positive territory after being closed this morning due to a typhoon. Tokyo’s Nikkei 225 was closed for a public holiday.
GSK strikes £2.5 billion deal with Chinese vaccine company
07:23 , Simon Hunt
Pharma giant GSK has struck a £2.5 billion deal with the largest Chinese vaccines company, Zhifei, in a bid to accelerate sales of its Shingrix vaccine in China.
Starting on 1 January 2024, Zhifei will have exclusive rights to import and distribute Shingrix in China - focusing on promoting the vaccine through its extensive service network, which covers more than 30,000 vaccination points across the country.
Zhifei will purchase agreed volumes of Shingrix with a value to GSK of £2.5 billion in total over the initial three-year period. These volumes are expected to be phased over this time as demand is expected to accelerate steadily through the period.
Shingrix is GSK’s patented shingles vaccine.
Recap: Friday’s top stories
Sunday 8 October 2023 22:43 , Simon Hunt
Good morning. Here’s a summar of our top headlines from Friday:
Big City funds are eating up 20% of the returns earned by small investors and face extinction unless they reform, analysis for the Evening Standard suggests. Dubbed “investment dinosaurs” some of the oldest and grandest names in the City risk losing customers to cheaper funds which track the stock market or to the new breed of retail investor confident to pick their own shares.
London house prices fall 4.8% year-on-year, UK prices down 4.7%, as “higher-for-longer” interest rate fears hit the property market, UK’s top mortgage lender Halifax says
Troubled banknote maker De La Rue expects profits to be “marginally ahead” of expectations as it begins to recover from recent struggles - shares had already doubled in value since June but still down 95% from peak
JD Wetherspoon tops pre-pandemic sales for the first time as it swings back to profit
Sam Bankman-Fried’s college roommate and ex-colleague, Gary Wang, testified on Thursday at the FTX cryptocurrency exchange founder’s fraud trial that Bankman-Fried told him to give a hedge fund they co-owned special trading privileges on FTX
And...why the UK is set for biggest tax rise in at least 50 years with a £40bn raid.
