Oil prices have fallen and shares are back under pressure after a warning from the boss of Moderna that existing vaccines are likely to be less effective against the omicron variant.
Stéphane Bancel also told the FT it may take months for new vaccines to be developed at sufficient scale. His comments triggered more selling pressure after yesterday's 1% rebound for the FTSE 100 index.
In corporate news, easyJet has provided investors with the latest on booking trends alongside the publication of annual results.
Moderna boss warns existing vaccines may struggle against omicron
FTSE drops 1% on Moderna CEO warning
EasyJet pandemic losses hit £2 billion
TSB to shut 70 branches
14:06 , Simon English
TSB is axing 70 more branches next year including one on Baker Street in Central London the latest bank to say that customers are switching to digital services.
The closures come on top of 164 closures announced in 2020. Around 150 jobs are affected, though TSB said the people would be offered alternative roles.
“Closing branches is an incredibly difficult decision to take, but we have to respond to the changes in the way people bank and provide the right mix of services for all our customers now and into the future.
FTSE pars back losses
13:02 , Oscar Williams-Grut
Losses on the FTSE 100 have eased slightly. The index is now down just 52 points, or 0.7%, to 7057.
Investors still can’t seem to make their mind up about the impact of Omicron. An early morning warning from the boss of Moderna spooked markets but Professor Karl Lauterbach, who is running to be Germany’s next health minister, has since described it as a possible “Christmas gift” due to mild symptoms. Sentiment seems to be caught between those two positions.
Sainsbury’s is bottom of the FTSE 100, down 3.9%.
Facebook ordered to sell Giphy by UK competition watchdog
11:53 , Oscar Williams-Grut
The Competition and Markets Authority (CMA) said its in-depth investigation had concluded that Facebook’s ownership of Giphy had reduced competition in the online advertising market and could reduce competition between social media platforms. Only a sale can address the issues, the CMA said.
Marston’s boss says firms still making Christmas party bookings as pubco reports widened loss
10:45 , Naomi Ackerman
Employers are hanging on to office Christmas party pub bookings despite the new Omicron variant, the new boss of Marston's said today.
Andrew Andrea, the pubco's former finance chief who last month replaced Marston's leader of two decades, Ralph Findlay, told the Standard the group has not seen a surge in cancellations this week - but has noted a trend towards firms booking slimmed-down festive gatherings of 10-to-30 employees, rather than pre-Covid parties of 50 or 60-plus.
He said: "The bookings started late, but they are happening. We are seeing that office parties are being organised, but that employers are being quite responsible... We've been positively surprised, and we're still taking enquiries."
Andrea spoke as Marston's - which has an estate of over 1,500 pubs - delivered results that showed an £100 million underlying pre-tax loss for the Covid-hit year to October 2, widened from a £22 million loss a year earlier.
The company withheld a dividend, and shares were as much as 4.2% lower this morning on the update.
Read the full interview with the new chief executive here
FTSE 100 selling pressure continues
10:39 , Graeme Evans
Stock market fears over the omicron variant have deepened to send London's FTSE 100 index below the 7000 threshold for the first time in nearly two months.
The renewed selling pressure followed a warning from the boss of US vaccine maker Moderna that existing jabs may struggle with the new Covid-19 variant.
Stéphane Bancel told the FT that it could take months for pharmaceutical companies to manufacture enough vaccines at a sufficient scale to make a difference.
Having rallied yesterday in the wake of Friday's 3.6% rout, the FTSE 100 index fell by more than 1.5% to as low as 6989 at one point. The top flight was later 91.51 points lower at 7018.44.
AstraZeneca shares fell 1.5% or 124p to 8243p following Bancel's comments, with investors fearful of the impact on earnings expectations if the company is unable to proceed with plans to begin selling its existing vaccine at more than just cost.
The threat of more Covid-19 restrictions kept up pressure on travel and leisure stocks, leaving InterContinental Hotels 3% or 155p lower at 4445p and Rolls-Royce down 3.5p to 118.96p.
AJ Bell investment director Russ Mould said: “No-one knows how much trouble the new variant is going to cause, and so it seems plausible that we will see heightened volatility on the markets until there is adequate data to better understand the lay of the land.”
Other heavyweight stocks under pressure included BP and Royal Dutch Shell, with shares down 2.5% after Brent crude slipped towards $70 a barrel.
Lloyds Banking Group also dipped another 1p to 45.78p as markets increasingly rule out the chances of the Bank of England raising interest rates in December.
Defensive plays including Reckitt Benckiser and Croda International were among a handful of blue-chip stocks in positive territory.
The FTSE 250 index fell 253.72 to 22,502.61, with housebuilder Countryside Properties down 21.8p to 418p in the wake of full-year results.
Shares in publishing group Future up more than 15%
10:13 , Joanna Bourke
Future, the publishing group behind brands such as The Week and Metal Hammer, today upgraded its profits outlook, sending the shares more than 15% higher.
The company, led by Zillah Byng-Thorne, has boosted the business by acquisitions and has seen digital advertising growth and sales improve.
In the year to September 30 revenue jumped 79% to £606.8 million.
Future now expects adjusted profits for the current financial year to come in "materially" above the £244 million the City had been anticipating.”
The shares rose 510p to 3702p.
‘Markets hate uncertainty'
09:56 , Oscar Williams-Grut
The FTSE 100’s sell-off looks to be accelerating. The blue chip index is down 97 points, or 1.4%, at 7012 after two hours of trade.
AJ Bell investment director Russ Mould says of today’s sell-off: “It only took one comment from the boss of drugs firm Moderna to derail markets once again. Stéphane Bancel said he believed existing vaccines would struggle with the Omicron variant, leading to a renewed sell-off in shares and oil prices.
“Markets hate uncertainty, and this is precisely what we have now. No-one knows how much trouble the new variant is going to cause, and so it seems plausible that we will see heightened volatility on the markets until there is adequate data to better understand the lay of the land.
“However, in the bigger scheme of things today’s sell-off could have been a lot worse. European markets were down 1% or less. That’s become a normal day’s movement on many occasions over the past year or so.
“The biggest contributor to the FTSE 100’s 0.8% decline in points terms was pharmaceutical company AstraZeneca, perhaps as investors reacted to the warning from Moderna’s boss that existing vaccines wouldn’t work as well with the new variant. That might lead some investors to think AstraZeneca’s earnings forecasts might need to be downgraded.
“Though it would be far too premature to see that happen immediately given the lack of sufficient data to prove Stéphane Bancel’s theory.”
Greencore returns to pre-Covid to-go sales as departing CEO says sandwich maker will look to invest
09:38 , Naomi Ackerman
Britain's biggest sandwich maker has returned to profit and pre-Covid takeaway trading since lockdowns lifted, boosted by workers heading out to grab a bite to eat close to home.
The listed Greencore supplies supermarkets including M&S, convenience stores on high streets and travel hubs.
Revenues rose almost 5% to £1.32 billion in the year to September 24. The group reported £27.8 million in pre-tax profits, from a £10.8 million loss in the prior year.
CEO Patrick Coveney is set to leave Greencore after 14 years at the helm to head up catering giant SSP. Looking forward, he said: "We've been able to rebuild our balance sheet and get our leverage level back to 2x. It gives us the strength to protect and invest in the business going forward."
Shares fell by 0.5%, or 0.6p, to 122.5p, this morning.
Wise shares leap on higher revenues and growth forecasts
08:56 , Oscar Williams-Grut
Recently floated fintech giant Wise is cutting price for customers as money transfers over its platform accelerate and revenue rises.
Wise said it transferred £34 billion on behalf of customers in the six months to 30 September. That was 44% higher than the same period last year and helped revenue rise 33% to £256 million.
Revenue grew at a slower pace than volumes as Wise cut its prices. The company said it cut the average cost of moving money internationally on its platform fell by 7 basis points in the period. CEO Kristo Kärmann said it was part of the company’s “mission to make moving and managing money across borders faster, easier, cheaper and more transparent for everyone, everywhere.”
Despite lower prices, Wise’s gross profit margin grew from 62% to 68%. CFO Matt Briers said margins were rising due to increased operational efficiencies and negotiating lower bank fees.
“We’re just reducing away this friction between us and our customers,” Briers told the Standard.
Shares rose 69p, or 9.1%, to 825.4p.
Shaftesbury hails ‘turnaround’ as value of estate falls
08:46 , Joanna Bourke
West End landlord Shaftesbury has cheered a “remarkable bounce back” since freedom day, even as the value of its property estate fell.
The firm, known for its buildings in Chinatown and Carnaby Street, saw its property portfolio decline 5.5% on a like for like basis to £3 billion in the 12 months to September 30. That period included lockdowns and times when rent support was given to some tenants.
But chief Brian Bickell pointed to encouraging trends in the second half, particularly from July 19 onwards when social distancing ended in most cases and the legal requirement to wear a face covering was lifted.
He said: “What followed has been a remarkable bounce back in activity, as domestic visitors and workers returned, with footfall and spending in our villages well on the way to returning to, or in some cases already exceeding, their pre-pandemic levels.”
Shares have opened 1.1% lower.
FTSE 100 falls 1%
08:31 , Graeme Evans
The FTSE 100 index is 1% lower after comments from Moderna boss Stéphane Bancel reignited fears about the omicron variant.
His warning that it may take months for new vaccines to be developed at sufficient scale resulted in a resumption of selling trends seen in Friday's stock market rout.
The FTSE 100 fell 78 points to 7032, in line with the performance seen in Europe.
The decline in oil prices meant BP dropped 2.5% or 7.85p to 319.85p while Lloyds Banking Group is 1.1p cheaper at 45.7p as markets increasingly rule out the chances of the Bank of England raising interest rates in December.
The FTSE 250 index fell 0.75%, despite a 15% rise for publisher Future after its full-year results. Low-cost airline easyJet also rallied 3% following its results.
Energy supply disruption boosts Centrica
08:02 , Graeme Evans
Centrica shares have been backed to go sharply higher as the British Gas owner benefits from the collapse of rival energy suppliers.
The FTSE 250 stock is up 31% to 65.28p since mid-September but Investec Securities said today it believes Centrica has the potential to be trading at 105p.
The City firm said: “We are convinced that the supply market disorder will ultimately result in a better landscape for the survivors, but we still have the next six months to get through.”
Annual results are due in February, when Investec expects Centrica to outline its long-term strategy and framework for dividend payments.
Easyjet losses top £2bn in two years
07:47 , Simon English
Easyjet plunged to a £1.13 billion loss as the pandemic took its toll on the low-cost airline, with the latest Covid variant giving further concern to investors and the wider industry.
The company says bookings for the first half of next year are ahead of where they were before Covid emerged. But it admits that “many uncertainties remain” and that it is impossible to say what impact Omicron will have on European travel.
CEO Johan Lundgren said:
"easyJet is moving through the pandemic with renewed strength having transformed the business by optimising our network and flexibility, delivering significant cost savings while also step-changing ancillary revenue.
"In summary, we remain mindful that many uncertainties remain as we navigate the winter, but we see a unique opportunity for easyJet to win customers and take market share from rivals in this period."
FTSE 100 set to fall sharply
07:38 , Graeme Evans
The recovery hopes of European markets have been dealt a blow after a warning from the boss of Moderna that existing vaccines may struggle with the omicron variant.
Stéphane Bancel also told the FT that it would take months for pharmaceutical companies to manufacture enough jabs at a sufficient scale to make a difference.
His tone, which contrasts with suggestions from Pfizer and BioNTech that any new vaccine would be able to modified fairly quickly, caused oil prices to fall back sharply as an increasingly jittery market reacted to the prospect of further Covid-19 restrictions.
Brent crude futures fell by 3% to $71.52 a barrel and CMC Markets is forecasting that the FTSE 100 index will open 90 points lower at 7020.
The latest sell-off comes after a modest recovery yesterday, when the FTSE 100 closed 0.9% or 65.92 points higher at 7109.95 to recoup some of Friday's 3.6% slump.
Wall Street also finished higher, led by a 1.9% jump for the tech-laden Nasdaq after President Biden ruled out the immediate prospect of further lockdowns.
CMC's Michael Hewson said: “This morning’s drop in markets shows that sentiment is set to remain extremely fickle until we get a clearer idea of what comes next when it comes to the new variant.”