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BUSINESS CLOSE: FTSE Gains Shrink As New Full Lockdown Looms;

by Lavada McCranie (2021-10-26)

Shares soared on the first day of trading of 2021 despite rising Covid cases across the country, with the FTSE 100 up by as much as 3 per cent at one point this morning.

However, the UK blue chip index saw gains shrink rapidly this afternoon as Scotland announced a new lockdown from midnight tonight, with Prime Minister Boris Johnson expected to follow suit when he gives a televised statement this evening at 8pm.

The FTSE 100 still managed to close up 1.7 per cent at 6,571.88, while the domestically-focused FTSE 250 ended the day 0.2 per cent higher at 20,537.89.

It comes as the AstraZeneca/Oxford vaccine started being administered in the UK today.

In company news, US casino giant MGM Resorts has made an approach for Entain - the owner of bookmakers Ladbrokes and Coral - in an attempt to push further into online sports betting. The offer values the business at £8.09billion.

Plumbing parts distributor Ferguson has agreed to sell its UK business to Clayton Dubilier & Rice, a private investment firm, for about £308million

Brian Pinker receives the Oxford University/AstraZeneca Covid-19 vaccine today

Camilla Canocchi Host commentator



The FTSE 100 has closed up 1.7%, or 111.36 points, to 6,571.88

The FTSE 250 has closed up 0.2%, or 49.59 points, to 20,537.89.


Travel and transport stocks hit by looming, stricter lockdown

Airlines, travel companies and transport groups have suffered falls this afternoon because of lockdown fears.

BA owner IAG and easyjet were down between 6 and 7 per cent.

Go-Ahead Group saw shares fall almost 10 per cent, while Firstgroup was down 8 per cent, and National Express down 4 per cent.


Markets rally eases as stricter lockdown looms

UK stock markets have seen gains shrink rapidly this afternoon.

Just before close, the FTSE 100 - which jumped as much as 3% earlier on - is up 1.8% at 6,575.81.

The domestically-focused FTSE 250, which also saw strong gains this morning, is up just 0.2% at 20,530.94.

It follows steep falls in the US, where nerves over the outcome of runoff elections in Georgia this week countered optimism over a vaccine-driven recovery in the global economy.

The S&P 500 is down 1.4%, the Dow is down 1.7%, while the Nasdaq is down 1.3%.

Meanwhile, news that Boris Johnson is set to unveil a brutal new national lockdown tonight has probably weighed on sentiment too.


Markets in brief

With less than an hour to go before close:

The FTSE 100 is up 1.9% at 6,581.

The FTSE 250 is up 0.2% at 20,535.74.


Boris will address the nation at 8pm TONIGHT

Boris Johnson will unveil new measures to tackle the mutant coronavirus in an address to the nation tonight amid calls for a national lockdown.

Announcing the dramatic move, a No10 spokesman said: 'The spread of the new variant of COVID-19 has led to rapidly escalating case numbers across the country.

Boris Johnson says harsher Covid lockdown IS coming

The PM is set to make a televised statement on the 'next steps' in the crisis at 8pm, with Parliament being recalled on Wednesday.


JUST IN: Boris Johnson to address the UK tonight

Prime Minister Boris Johnson will make a televised address tonight outlining the steps to tackle the rise in coronavirus cases, Downing Street has said.

He is expected to announce stricter lockdown measures.


Wall Street opens at record high

The S&P 500 and the Dow have hit a fresh record high in their first trading session of 2021.

The S&P 500 rose 8.5 points, or 0.23%, at the open to 3764.61.

The Dow rose 21.0 points, or 0.07% to to 30627.47.

The Nasdaq rose 70.2 points, or 0.54%, to 12958.522.


Pound falls further against dollar and euro

The pound has lost more ground against the dollar and the euro.

It comes as Scotland announced a new national lockdown from tonight, while stricter measures may be soon introduced in England too.

Sterling is down 1 per cent against the euro and 0.3 per cent against the dollar, with £1 buying €1.10 and $1.362 on currency markets this afternoon.


Scotland to enter new national lockdown from midnight

The SNP leader said the new crackdown will include a legally enforceable stay-at-home rule.

Exercise and essential journeys will be the only reasons why people will be allowed to leave their homes.

Nicola Sturgeon announces new coronavirus lockdown for Scotland

Scotland will be plunged back into a national coronavirus lockdown from midnight this evening, Nicola Sturgeon announced this afternoon.

Mail Online


New M&C Saatchi boss takes over

Moray MacLennan was confirmed as chief executive of the advertising agency on January 1, after being announced as the next boss in November last year.

MacLennan, who joined Saatchi & Saatchi as a trainee in 1983, was made chief executive of the business's worldwide unit in 2010.

His appointment comes after a turbulent year for the advertising agency.

Chairman Gareth Davis said Mr MacLennan faces 'a period of dynamic change'.

Last year M&C's shares were suspended from trading for 10 weeks in the fallout from a multimillion-pound accounting scandal first uncovered in 2019.


Charles Tyrwhitt's founder Nick Wheeler: 'Dress-down Friday? Now it's every day'

Wheeler reveals why his firm will not make shirts in China and that, tragically, two of his friends have killed themselves since the Covid-19 lockdowns were imposed.

Read his interview from the weekend below...

Charles Tyrwhitt's founder on why firm will not make shirts in China

Nick Wheeler, an entrepreneur who built his multi-million pound firm dressing City workers, makes a truly breathtaking appeal for life to return to normal.


Hipgnosis snaps up Jimmy Iovine's entire back catalogue

Music rights investment fund Hipgnosis Songs has snapped up the entire back catalogue from renowned producer Jimmy lovine for an undisclosed sum.

The portfolio includes 259 songs, from artists including Patti Smith, Tom Petty, Dire Straits and U2, along with lovine's film production royalties for '8 Mile' and 'Get Rich or Die Tryin'.

This is the latest move for Hipgnosis, co-founded by a former manager of Elton John, and it has already invested almost £1.2billion in procuring over 110 catalogues that count songs from artists such as Fleetwood Mac, Blondie, and the Kaiser Chiefs.

Music fund Hipgnosis snaps up producer Jimmy Iovine's back catalogue

This is the latest move for Hipgnosis, co-founded by a former manager of Elton John, and it has already invested almost £1.2billion in procuring over 110 catalogues.


Ferguson sells UK business Wolseley to US private equity firm

Plumbing and heating giant Ferguson has confirmed has sold off its UK business Wolseley for £308million to US private equity firm Clayton Dubilier & Rice.

It had announced in September 2019 that the demerger of the UK division was in the pipeline, although the plan back then was for a separate stock market listing.

Our story below...

Ferguson sells its UK-based Wosley for £308m to US private equity firm

The FTSE 100 company said shareholders are in line for a special dividend as a result of the sale, which will be completed by the end of January.


Wall Street set to open at record highs

US stock markets are expected to open at new record highs after ending 2020 with strong gains.

The Dow is seen opening up 0.6%.

The S&P 500 is expected to open up 0.55%.

The Nasdaq is seen rising 0.45%.


Bitcoin falls 10%

Bitcoin is falling today, losing ground from a record high of $34,800 touched yesterday.

The world's most famous cryptocurrency fell more than 14 per cent at one point today, wiping out more than half its 20 per cent rally from New Year's Eve.

Bitcoin was last down 10 per cent.

Source: Coindesk


Back to the UK manufacturing PMI hitting a three-year high...

Huw Howells, head of manufacturing and industrials at Lloyds Bank, suggests that the robust figures should be read with a degree of caution, and questions what the real level of output is with the stockpiling effect removed.

He says:

It’s wise to read December’s robust figures with a degree of caution given they may conceal the impact of ongoing uncertainty and border closures later in the month, alongside the vast disparities we saw across the sector in 2020.

Generally speaking, it’s the larger manufacturers that are helping to bolster activity levels, with food producers seeing strong demand in December. We also heard some brought forward orders to mitigate the risks of potential issues at ports this month due to Brexit - which, inadvertently, may have helped some to buffer against the unforeseen freight chaos ensued following the emergence of the new COVID-19 strain.

The ‘stockpiling effect’ raises the question as to what the ‘real’ level of output is across the sector, something which may only be answered in the data released later this quarter. Looking forward, those manufacturers who have acted to ensure their business can be as agile as possible will be the ones in the best position to navigate choppy waters.


Hundreds of Google employees in the US unionise

Reuters reports:

Over 200 Google employees in the United States have formed a union, the elected union leaders wrote in a New York Times opinion piece on Monday.

'Alphabet Workers Union' aims to ensure that employees work at a fair wage, without fear of abuse, retaliation or discrimination, the union heads wrote.

Google did not immediately respond to Reuters request for comment.


Markets rally continues

The FTSE 100 is up 2.9% to 6,647.

The FTSE 250 is up 1.3% to 20,760.93.

David Madden of CMC Markets UK says:

Commodity stocks are helping the FTSE 100 outperformer versus its continental counterparts. In terms of index points, Rio Tinto, BHP Group, BP, Royal Dutch Shell and Anglo American are some of the contributors to the market’s rally.

The pullback in sterling after its recent rally helped internationally focused stocks like Diageo and Unilever.

Also in the mix is AstraZeneca on the back of the news that the Covid-19 vaccine that it developed with Oxford University is being rolled out from today.

In the past couple of months there has been a lot of positive news with respect to coronavirus drugs and the wider markets are being helped by the Oxford-AstraZeneca story as there is a growing feeling that the pharma sector is in a better position to tackle the health crisis.

Russ Mould, investment director at AJ Bell, adds:

For now investors clearly believe the vaccine will provide the catalyst for a big recovery, perhaps after a tough first quarter, but getting enough of the population inoculated will be a big logistical challenge.

A key determining factor could be whether the existing vaccines prevent transmission of Covid or just infection - this could determine how quickly we return to normality and how patient the market might be.


Easyjet begins suspension of voting rights for UK shareholders

EasyJet has begun suspending the voting rights of some non-EU shareholders to comply with post-Brexit airline ownership rules.

The airline's non-EU shareholders - which now include UK shareholders too - 'shall not be entitled ... to attend or to speak at any general meeting of the Company or any meeting of the holders of any class of shares or to vote at any such meeting'.

It follows similar moves by Ryanair and Wizz Air, which last week said UK investors will see their 'ordinary' shares become 'restricted' as they complied with EU laws.

EU regulations say airlines with European licences must be more than 50 per cent controlled by investors from inside the bloc if they wish to fly freely across the Continent.

EasyJet said it is currently 52.65 per cent owned by non-EU shareholders, meaning it must make changes to meet EU rules following the end of the Brexit transition period on December 31.


Savers withdraw £6.2BILLION from NS&I accounts

Savers took out £6.2billion from NS&I accounts in November, according to Bank of England data released this morning.

The exodus from NS&I comes after it slashed interest rates on some of its most popular products.


Martin Sorrell's S4Capital reveals two more takeovers; shares up 2%

Sir Martin Sorrell's S4Capital has bought two new businesses for an undisclosed sum as the advertising mogul looks to continue growing his new agency.

The deal sees S4Capital buy integrated agencies Decoded and Metric Theory which will be folded into MediaMonks and MightyHive.

It is the seventh acquisition by S4Capital since the March lockdown as the firm looks towards global expansion in the wake of the Brexit trade deal.

Full story below...

Sir Martin Sorrell's S4Capital reveals two more takeovers

The deal sees S4Capital buy integrated agencies Decoded and Metric Theory for an undisclosed sum. The firms will be folded into MediaMonks and MightyHive.


Banks shares in the red

The UK banking sector is under pressure this morning as the City is still awaiting a Brexit deal.

As it stands, Brexit means many financial services companies in the UK can no longer easily sell their services and products to customers in the EU.

NatWest is the top faller, with shares down 3.4 per cent, followed by Lloyds, which is down 2.5 per cent and Barclays, down 1 per cent.

Metro Bank is also in the red, falling 4 per cent.


Tui shares jump almost 10%

Shares in holiday group Tui have risen almost 10 per cent this morning after its chief executive said he expects 'a largely normal summer' this year.

Tui shares in London are up 9.6 per cent at 502.08p.


UK mortgage approvals hit 13-year high

UK lenders approved more than 100,000 new mortgages in November, the most since the start of the financial crisis in August 2007.

Bank of England data released today shows that lenders approved 104,969 mortgages in November, up from 98,338 in October.

Anthony Codling of property platform Twindig reckons mortgage approvals will continue to rise until the end of the stamp duty holiday at the end of March.

He adds:

As we start 2021, we also believe that many home sellers will also be seeking to sell ahead of the budget scheduled for the 3 March 2021 in case the Chancellor seeks to raise the rates of Capital Gains Tax on properties.

If an increase in capital gains tax coincides with the end of the stamp duty holiday, we could see a significant fall in housing market activity and the chancellor may not see the anticipated increase in tax receipts.


FTSE rises further - index is up 2.8% at 6,642

Hinesh Patel, portfolio manager at Quilter Investors, warns over reading too much into today's rise:

UK markets certainly seem to be welcoming in 2021 with a bang, with the blue-chip FTSE 100 up around 3% this morning. With Brexit risk appearing as if it is off the table and the start of the Oxford University/AstraZeneca vaccine roll out, many investors are taking the opportunity to catch up on some of the potential opportunities they may have missed prior to Christmas.

It is important to remember though that UK markets did also perform poorly in the last two days of 2020, so we shouldn’t read too much into this move today. Instead we need to look over the long-term and how 2021 is likely to play out.

There are numerous reports that more stringent measures will be introduced to help stem the rise in Covid cases, and this is certainly weighing on domestic stocks. Investors will be desperately hoping that this latest vaccine can be rolled out in rapid time otherwise they may find themselves prematurely embracing the reopening of the economy.


Pound falls against the euro

The pound is losing ground against the euro today, falling 0.6 per cent to €1.1119, as the euro is gaining strength on the back of upbeat manufacturing data.

Against the dollar, the pound is flat at around $1.367, having risen above $1.37 overnight thanks to a weaker dollar - the first time since May 2018.


Eurozone manufacturing ends 2020 on strong note

The eurozone also had its latest manufacturing PMI survey out today - and it also shows production rising at one of the fastest rates in over three years.

It rose to 55.2 in December from 53.8 in November. That was mostly down to demand for German goods.

Chris Williamson, chief business economist at IHS Markit, explains:

Eurozone manufacturing ended 2020 on an encouragingly strong note, with production growth accelerating to one of the fastest seen over the past three years. The solid performance of manufacturing amid the tightening of COVID-19 restrictions in the closing months of 2020 represents a major contrast to the lockdowns earlier in the year, with factories acting as a crucial support to the economy as the service sector is hit by tough social distancing measures.

The strong manufacturing growth is thanks to a large extent on booming demand for German goods, which drove most of the increase in eurozone production during December, in turn buoyed by rising exports. While robust expansions were also seen in the Netherlands and Ireland, these in part reflected a temporary spike in UK demand prior to the end of the Brexit transition period.


'Brexit-buying' boosts UK factories

UK factories saw activity hit a three-year high in December as the latest manufacturing PMI rose to 57.5 in December.

However, most of the expansion was down to clients bringing forward orders to guard against potential disruption caused by the end of the Brexit transition period - including delays at ports.

IHS Markit, which compiles the survey, said:

The UK manufacturing sector had a mixed end to 2020. Clients bringing forward orders to beat the end of the Brexit transition period and the ongoing bounce from the re-opening of the global economy boosted inflows of new orders and pushed output higher.

However, port delays and other logistical disruptions meant that supply-chain delays lengthened to one of the greatest extents in the survey's history.


Bitcoin soars above $30,000

Bitcoin has continued its meteoric rise, soaring above $30,000 yesterday for the first time less than three weeks after smashing through the $20,000 mark.

Bitcoin's value shot up by 305 per cent last year, and in the first three days of 2021 it has jumped another 17 per cent. Yesterday it was trading at $33,930.

Today, it is a bit lower at around $31,200.

So is it a new safe haven or heading for another crash?

Read Toby Walne's story from the weekend to find out...

Is Bitcoin the new safe haven or heading for another crash?

While some investment experts have embraced Bitcoin within their investment portfolios, others fear it could be heading for a sharp fall - as happened in early 2018.


Today's top risers...

Entain is topping the FTSE 100 risers board with shares rising 25 per cent.

Other risers among the biggest 350 listed companies are miners like Fresnillo, Polymetal, Rio Tinto and Anglo American as well as commodities giant Glencore.

Shares in holiday giant Tui are also in demand - up 8 per cent.


Entain tops FTSE 100 risers after takeover offer - our story...

Ladbrokes and Coral owner Entain has revealed it has received and rejected a £8.09billion takeover proposal from U.S. casino giant MGM Resorts.

The British sports betting and gambling company said that it 'believes that the proposal significantly undervalues the company and its prospects'.

On news of the announcement, Entain's shares surged 26.2 per cent to be the top gainer on the FTSE 100 Monday morning.

Sadie Whitelocks has the story...

MGM Resorts targets £8.09bn takeover of Ladbrokes owner Entain

The British sports betting and gambling company Entain said that it 'believes that the proposal significantly undervalues the company and its prospects'.

This is Money


The FTSE 100 is now up 2.5% to 6,622

While the FTSE 250 is up 1.4% to 20,773.89.


What's moving markets today?

Marc Ostwald, chief economist & global strategist at ADM Investor Services International Limited, says investors are in a risk mood, but markets are likely to experience more volatility:

The rapid rise in or persistently high level of infection rates continues to push further back on timelines for a vaccine assisted recovery (with distribution and actual vaccination rates in the spotlight), leaving an array of questions about the voracious overall level of risk appetite across asset classes, above all given the skews in positioning and risk/reward, which at the very least are likely to be a source of more elevated levels of volatility.

But it is worries about democratic institutional processes in the U.S.A. which are in focus via way of the run-off Senate elections in Georgia, and the inaugural session of the new Congress on Wednesday which will be the focal point for the middle of the week.

In the U.K. it will probably be a number of weeks before it becomes clear how much Brexit related disruption there will be to the economy, but the immediate crisis of confidence in the UK's political leadership due to its management of the pandemic fall-out is the initial concern.

Neil Wilson at says vaccine news and a last-minute Brexit trade deal are helping markets higher:

The FTSE 100 had ended 2020 on a bit of a sour note, but is much firmer this morning with the index +2% and well bid above the 6,500 mark and bulls eyeing the recent highs close to 6,700.

There is a general risk-on mood and vaccine positivity could be a factor - the UK approved the use of the Oxford University/Astra Zeneca vaccine, with half a million doses ready today. It will allow a faster easing of restrictions, but the country looks likely to endure tougher restrictions in the meantime.

We could also say that the lack of chaos/Armageddon/doomsday from Brexit is also a factor.


Astrazeneca shares rise 1.8% as vaccine rollout begins in the UK

Shares in FTSE 100 drugs giant Astrazeneca have risen 1.8 per cent to £74.52 this morning after the vaccine it developed with the University of Oxford has began to be rolled out today after receiving emergency approval from the UK regulatory body.


Shares in Ladbrokes owner Entain jump 25% on takeover offer

Ladbrokes owner Entain, formerly known as GVC Holdings, received a $11billion (£8.09billion) offer from US casino operator MGM Resorts.

The news sent shares in the group rising as much as 25 per cent to £14.24.

The offer of £13.83 per Entain share represents a premium of 22 per cent based on the closing price on 31 December.

However, the Entain board said the proposal 'significantly undervalues the Company and its prospects' and has request 'additional information in respect of the strategic rationale for a combination of the two companies'.

It said it received multiple proposals from MGM, with the most recent one being MGM's offer of 0.6 of its shares for each Entain share.


Oil prices jump

Oil prices rose today on expectations that OPEC and allied producers may cap production at current levels in February amid worries of continued weaker demand as a result of the pandemic.

Brent crude hit $53.17 a barrel, the highest since March 2020.

US crude touched $49.71 a barrel, the highest since February 2020.


UK stock markets jump despite rising Covid cases

London shares have jumped in the first trading session of the new year.

The FTSE 100 is up 1.9% at 6,582 as optimism around vaccine rollouts and a jump in oil prices helped boost the export-heavy index.

The domestically focused FTSE 250 is up by a smaller 0.9% at 20,675 as Boris Johnson said yesterday that tougher lockdown restrictions may be introduced in the coming weeks.

It comes as Covid cases continue to rise across the country.

Between December 25 and January 2, the total number of inpatients suffering with coronavirus in England jumped from 17,701 to 23,557 - up 33 per cent.

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