Yahoo Finance FTSE 100 Live: Recession avoided in 2022, Standard Chartered bid latest
The UK looks to have avoided recession in 2022 after estimates today showed GDP unchanged in the final quarter of the year.
The UK economy contracted by 0.3% in the third quarter and had appeared on course for a further decline in the final period of 2022, representing a technical recession.
Monthly estimates published by the Office for National Statistics also showed that GDP fell by 0.5% in December, following unrevised growth of 0.1% in November.
Read more on today’s GDP release
FTSE 100 Live Friday
Recession reprieve after flat Q4
Standard Chartered rumours quashed
Saga in talks to sell underwriting business
FTSE closes at 7882
Friday 10 February 2023 16:35 , Daniel O'Boyle
The FTSE 100 closed at 7882 today, down 0.4% after its record close yesterday.
BP and Shelll were the biggest risers of the day after oil prices jumped on news of reduced Russian production.
The biggest fallers were Ocado, down more than 10%, and Standard Chartered, which dropped more than 5% as First Abu Dhabi Bank quashed acquisition speculation.
US stocks set to open lower, Lyft shares to plummet
Friday 10 February 2023 13:56 , Daniel O'Boyle
US stocks are set to open lower again today, with Lyft the most dramatic faller.
S&P 500 futures are currently down 0.4% at 4064, with Dow Jones Industrial Average futures falling 0.3% since close to 33610.
Lyft was subject to an especially large after-hours sell-off. After disappointing earnings announced at the close of trading yesterday, the rideshare service’s shares are set to plummet by more than 30% to $11.32, wiping out gains made earlier this year.
The S&P’s projected opening mark would be down 100 points from the close of trading on Tuesday.
Ocado biggest faller as FTSE slumps
Friday 10 February 2023 13:19 , Daniel O'Boyle
Ocado shares are down 6.8% so far today as the FTSE’s gains in the last two days were erased this morning.
Shares in the grocery delivery business were down to 669p today, after the UK reported no GDP growth in Q4.
While Ocado is the biggest faller among top companies, it has been a tough day for most major London-listed businesses. The FTSE hit 7855 at noon today, down almost 60 points from yesterday’s close.
Revealed: how many days FTSE 100 firms have staff in the office
Friday 10 February 2023 12:44 , Joanna Hodgson
To get a snapshot of some of the latest working patterns across Britain, the Evening Standard asked every member of the blue-chip FTSE 100 index how many days on average staff work in the office each week, and if that would change or stay the same this year.
We received responses from more than two-fifths (44) of the businesses on the index spanning sectors including retail, real estate, insurance, engineering and more, that collectively have more than 100,000 staff working in offices, mostly in the UK.
The results show that the old Monday- to-Friday office week that was once the default is far from making a comeback.
Oil price lifts BP and Shell, FTSE 100 lower
Friday 10 February 2023 10:17 , Graeme Evans
The impact of Brent crude’s latest price surge today left BP shares 16% higher over the week as the oil sector offsets losses elsewhere in the FTSE 100 index.
The London-based energy giant, whose shares jumped 8% on Tuesday after it declared a bigger-than-expected dividend and share buyback, added another 3% or 16.7p to 562.4p alongside a rise of 34.5p to 2500.5p for rival Shell.
Their gains followed a 2.5% rise in Brent crude futures to $86.57 after Russia announced plans to cut March production by 500,000 barrels a day, or around 5% of output, in response to the West’s price cap on its oil.
Brent crude ended the week about 8% higher, with the spike also fuelled by expectations of stronger demand following last Friday’s bumper US jobs report.
The continued labour market tightness also hobbled US shares as Wall Street traders revised their earlier optimism that the Federal Reserve is near the peak for interest rates.
With the S&P 500 posting back-on-back falls of more than 1% for the first time since December, the FTSE 100 index fell 14.41 points to 7896.74 in a continuation of its retreat from the record high of 7943 seen on Thursday morning.
Stocks under pressure due to the rates outlook included grocery technology stock Ocado, which retreated 26.2p to 689.8p. British Airways owner IAG also gave up some of its recent gains by falling 4.3p to 164p.
Standard Chartered led the blue-chip fallers board after First Abu Dhabi Bank reiterated its line from January that it is not considering a takeover for the Asia-focused lender.
Shares dropped 5% or 35.4p to 732.2p, reversing only half last night’s gain as traders look to the possibility of a bid later in the year.
The FTSE 250 index fell 112.53 points to 20,164.81, despite gains of 2% for North Sea explorer Harbour Energy and Africa-focused Tullow Oil.
Online fast fashion house ASOS, which today appointed industry veteran Sean Glithero as its interim chief financial officer, led the fallers board with a decline of 58p to 847p.
City Comment: Don’t get too mad about bank profits
Friday 10 February 2023 10:06 , Simon English
Is the fact of our banks being hugely profitable an outrage, deserving of government intervention?
Well, we might think that them making money is a lot better for us than them all going bust, as they did in 2008.
Back then, bank CEOs were something approaching cartoon villains. Fred Goodwin at RBS was a bully as well as a reckless banker, once declaimed as the worst in the world.
Bob Diamond at Barclays was a hard charging investment deal maker who was all about Wall Street rather than good mortgage deals for ordinary UK folk.
Today’s bunch – let’s start with Charlie Nunn at Lloyds and Alison Rose at NatWest – are much nicer. It is possible to look past their huge pay deals and see humans looking to do the right thing by customers.
Net interest margins – the gap between what the banks charge for loans and pay for savings – are rising and are the most obvious measure of profits. It does look mean that banks don’t immediately pass on higher interest rates to savers.
But the banks are far from entirely funded from the savings they have on account, They borrow from money markets to lend to us, and the margins are tighter than the NIM numbers suggests.
Moreover, knee jerk political reactions, such as when the Bank of England demanded banks cancel investor dividends in 2020, tend to undermine investor confidence. Which in turn increases bank costs.
And banks already do pay a huge amount of tax – there are surcharges and VAT bills that far exceed other sectors. Maybe we don’t need to bash the banks too much.
BP and Shell rise as Russia plans to cut oil production
Friday 10 February 2023 09:56 , Daniel O'Boyle
BP and Shell shares were up today after oil prices surged on the announcement that Russia will reduce its production in March.
Brent crude prices rose by more than $3 a barrel to $86.82 (£71.72) after Deputy Prime Minister Alexander Novak said Russia will cut the amount of oil it produces by about 500,000 barrels a day next month.
Shares in BP are up almost 3% so far today to 561p. Shell shares are up more than 1% to 2,947p.
The two supermajors both reported record profits for 2022, as UK households pay higher energy bills.
Bank profits to hit record £40bn
Friday 10 February 2023 09:39 , Simon English
BRITAIN’S top banks are poised to report record profits of about £40 billion, results that are likely to generate public anger and calls for a windfall tax on the industry.
This week the Commons Treasury select committee gave bank bosses a hostile grilling for putting up mortgage prices due to higher interest rates while failing to pass on the benefit to savers.
Figures compiled for the Evening Standard show those same bosses will, starting with Barclays on Wednesday, reveal profits that beat those made in 2007 before the financial crash that saw the government forced to bail out the banking sector.
AJ Bell estimates that Barclays profits for 2022 will top £7 billion as will those of Lloyds. HSBC will make more than £14 billion, NatWest well above £5 billion and Standard Chartered £4 billion.
Industrial production data unexpectedly rises in December
Friday 10 February 2023 09:12 , Michael Hunter
After the UK economy narrowly avoided entering recession at the end of last year, there are more numbers out that looks less bleak than feared.
Industrial production data for December showed an unexpected rise in output from November, of 0.3%, better than the 0.2% drop forecast. While it fell sharply year-on-year, by 4%, the decline was not as stark as the 5.3% forecast by economists.
Saga shares jump 5% as it mulls a sale of the underwriting arm of its insurance division
Friday 10 February 2023 08:59 , Simon Hunt
Shares in over-50s group Saga have jumped 5% to 180p in early trade this morning after the firm revealed talks to sell the underwriting arm of its insurance division to help pay down its debts.
It said in a trading update last month that there was “some pressure” on its underwriting business, and has since adopted cost cutting measures, including the closure of its large head office building in Folkestone, Kent.
Saga said the discussions were “ongoing” and that there was no certainty any transaction would happen. Any disposal would require approval from regulators and shareholders.
Simon French: Flat GDP figures could make 2023 recession less likely
Friday 10 February 2023 08:45 , Daniel O'Boyle
The UK’s flat Q4 GDP figures might make a recession in the first half of 2023 less likely, according to leading economist Simon French.
As GDP is defined as two successive quarters of negative quarter-on-quarter growth, a flat performance in Q4 means the targets to avoid a recession in the first half of 2023 will be easier to hit, French noted.
However, that might not offer much comfort in terms of living standards, with the UK’s economic output still below pre-pandemic levels.
FTSE 100 falls back, Standard Chartered down 6%
Friday 10 February 2023 08:32 , Graeme Evans
A record-breaking week for London’s FTSE 100 index is ending on a downbeat note after another poor session on Wall Street clouded sentiment.
The blue-chip index reached an all-time high of 7943 on Thursday morning, but it has fallen back since then and today weakened 18.57 points to 7892.58.
Standard Chartered led the fallers board after First Abu Dhabi Bank scotched speculation that it is still working on a bid for the Asia-focused lender. Standard’s shares fell 6% or 44.8p to 722.8p, unwinding a big chunk of the 11% rise seen yesterday.
Other stocks on the fallers board included Abrdn, Barclays and JD Sports Fashion, with declines of around 1.5%.
The FTSE 250 index fell 86.23 points to 20,191.11, led by a drop of 3% or 23p to 605p for Lancashire Holdings after the Bermuda-based insurer posted annual results.
Recession still on horizon despite Q4 reprieve
Friday 10 February 2023 08:22 , Graeme Evans
The UK avoided recession in the fourth quarter but it may only be a temporary reprieve, with ING economists pencilling in a 0.3-0.4% decline in GDP in the current quarter and probably “a very modest hit” in the second quarter too.
ING economist James Smith said a recession remains his base case but that it looks set to be very mild by historical standards, helped by the collapse in wholesale gas prices.
Smith added that December’s 0.5% contraction in monthly GDP was worse than expected, reflecting the impact of strikes and a lack of Premier League football games in December.
ASOS appoints interim chief financial officer as fast fashion company’s turnaround plan goes on
Friday 10 February 2023 07:48 , Michael Hunter
Online fast fashion house ASOS has appointed industry veteran Sean Glithero as its interim chief financial officer as its turnaround plan gathers pace.
He will replace the outgoing CFO, Katy Mecklenburgh, when she leave the group in May and has already joined the company for a “thorough handover”.
Glithero has spent a decade as a CFO, most recently at MatchesFashion. He has also worked at Auto Trader and Funding Circle.
Asos has been hit by a drop in UK sales and has launched a £300 million cost-cutting package, including a reduction in office and warehouse space. It also plans to cut the number of brands listed on its website. It also cut jobs to reduce staffing costs by 10%.
US markets struggle but Tesla recovery continues
Friday 10 February 2023 07:47 , Graeme Evans
Expectations that US interest rates will stay high for longer weakened Wall Street markets last night, with the S&P 500 posting its first back-to-back decline of more than 1% for the first time since December.
Technology stocks particularly felt the pressure from higher bond yields, led by Google owner Alphabet as it closed 4% lower to add to the 8% decline seen on Wednesday.
One growth stock bucking the trend has been electric car maker Tesla, which added another 3% to leave its shares 75% higher over the past month. However, they are still well below their level seen in November.
The weakness on Wall Street means that European markets are expected to open lower this morning, with the FTSE 100 index on course to reverse some of the 0.3% rise seen yesterday.
FTSE expected to open lower after GDP announcement
Friday 10 February 2023 07:33 , Daniel O'Boyle
The FTSE 100 is expected to dip by about 23 points from its record close when markets open today, after this morning’s GDP figures.
IG Index projects an opening of around 7888, after the index of blue-chip companies closed at 7911 yesterday.
This morning, the ONS revealed that GDP was down 0.5 per cent in December. This meant that there was no growth in the economy in Q4, but that the UK avoided a recession by the narrowest of margins.
Saga confirms its in talks to sell its underwriting business
Friday 10 February 2023 07:26 , Michael Hunter
Saga, the specialist travel, insurance and media business for the over 50s, has confirmed that it is in talks to sell its underwriting business, Acromas, to Open Insurance Technologies, an Australian firm.
It said in a trading update last month that there was “some pressure” on its underwriting business, and has since adopted cost cutting measures, including the closure of its large head office building in Folkestone, Kent.
Safe said the discussions were “ongoing” and that there was no certainty any transaction would happen. Any disposal would require approval from regulators and shareholders.
No offer for Standard Chartered
Friday 10 February 2023 07:25 , Graeme Evans
Standard Chartered shares are likely to fall back today after First Abu Dhabi Bank said it was not considering an offer for the Asia-focused bank.
Shares in the FTSE 100-listed lender jumped 11% yesterday on speculation that First Abu Dhabi Bank had revived its interest in a bid potentially worth $35 billion.
A statement to the London stock market said today: “First Abu Dhabi Bank notes the recent press speculation in relation to Standard Chartered and re-iterates that it is not evaluating a possible offer for Standard Chartered.”
It follows a similar statement on 5 January, when the bank confirmed it had previously been at the very early stages of considering a possible offer for Standard Chartered but that it was no longer doing so.
Friday 10 February 2023 07:09 , Jonathan Prynn
Britain’s flatlining economy narrowly avoided sliding into recession by the smallest of margins at the end of last year, official figures reveal today.
The Office for National Statistics (ONS) said output in December fell 0.5 per cent.
That means that the economy was flat over the fourth quarter of the year and therefore did not quite meet the technical definition of a recession - two consecutive quarters of negative growth. The economy shrank 0.3 per in the third quarter from July to September.
Annual GDP is estimated to have grown by 4.1% in 2022, following growth of 7.4% in 2021
Recap: Yesterday’s top stories
Friday 10 February 2023 06:46 , Simon Hunt
Good morning. Here’s a summary of our top stories from yesterday:
The biggest riser in the FTSE 100 was Standard Chartered after Bloomberg said that First Abu Dhabi Bank is still interested in buying the Asia-focused lender, reviving speculation that had appeared to fade last month.
The cost of basic foodstuffs and other kitchen staples will keep rising for at least another six months, consumer goods giant Unilever warned.
British American Tobacco expects its vaping division to be profitable earlier than previously anticipated, but its share price was down as diluted earnings per share declined.
The boost to Astrazeneca’s growth fuelled by its coronavirus vaccine is coming to an end as the firm looks to new medicines for future streams of income. The Cambridge-based business said it would see double-digit growth excluding Covid-19 medicines in 2023, but more modest single-digit growth when they are factored in.
Coming up today, we have the UK Q4 GDP figures, which could offer an insight into whether the UK economy will be tipped into recession, and if so, how deep it will be.
