FTSE 100 Live December 21: Omicron market reaction, Build Back Better, Wall Street trading, government borrowing numbers, public sector debt
The FTSE 100 index quickly recovered from Monday’s turmoil as sentiment continues to fluctuate in response to developments in the pandemic.
The rally in Asian and European stocks came when it emerged that UK government borrowing stood at £ 17.4bn, down £ 4.9bn from a year ago, but still the second highest figure for November since the monthly records began in 1993.
Public sector net debt stood at £ 2.3 trillion, representing around 96.1% of GDP and the highest ratio since March 1963, when it was 98.3%.
UK borrows more than expected in November
Government borrowing levels fell in November, but city economists fear they could skyrocket if new Covid restrictions are ordered.
The latest ONS figures show the government borrowed £ 17.4 billion last month. Despite being the second-highest on record for this month, it is down £ 4.9bn from a year ago.
But it was higher than the £ 16 billion predicted by a Reuters poll of economists.
The recent interest rate hike by the Bank of England adds £ 4 billion a year to the cost of servicing this debt.
Richard Carter, head of fixed interest research at Quilter Cheviot, said: “We know there could well be an Omicron shaped black hole in public finances, we just don’t know yet what could. be his size. The Chancellor has so far refused to offer additional financial support to companies, despite advice to avoid social contact as much as possible. This will need to change if new restrictions are introduced, especially if the new restrictions take the form of a firewall lockdown.
JD Sports leads the takeover of the FTSE 100
JD Sports Fashion shares hit a breakneck pace today as investors in a rejuvenated London market applauded the cross-read of Nike’s earnings update on Wall Street.
Blue-chip stock rose 4% in a session as sentiment showed great improvement after Monday’s hammering for global stocks caused by fears of tightening Covid restrictions.
London’s first flight lost 1% of its value yesterday, with Wall Street hit more hit after Democratic Senator Joe Manchin said he couldn’t back the new 1.9 Build Back Better infrastructure bill trillion dollars from President Biden.
Today’s turnaround came as Moderna said a booster of its vaccine appeared to protect against the Omicron variant. There was also some relief that Boris Johnson had moved away from the possibility of restrictions before Christmas to control the spread of the virus.
This gave retail stocks a boost as shares of Primark owner Associated British Foods rose over 2% or 48.5p to 1960.5p and Next rose 142p to 7920p.
The biggest gain came from JD Sports Fashion, which rose 7.8 pence to 207 pence after Nike’s better-than-expected second-quarter update showed the US sportswear giant had fallen from recent supply chain challenges.
Nike shares rose 3% in after-hours trading on Wall Street as it stuck to full-year guidance and said quarterly sales jumped 12% in its largest market from North America. JD Sports started life with a store in Bury in 1981, but now generates around 30% of its sales in the United States.
The FTSE 100 index rose 0.9% or 63.43 points to 7,261.46 as investors felt the opportunity to get some bargains ahead of Christmas after yesterday’s massive sell-offs.
The beneficiaries included the owner of British Airways IAG, up 2% or 2.62p to 133.6p. The homebuilding sector also received huge support, with heavyweights Barratt Developments, Berkeley and Taylor Wimpey all recording gains of over 3%.
A shortened board included veterinary services firm Dechra Pharmaceuticals, which fell from 70p to 5020p on its second day of listing on the FTSE 100.
In a quiet session for updates, Schroders rose 75p to 3450p after confirming a deal to buy a 75% stake in renewable energy fund manager Greencoat Capital for £ 358million.
London’s rally spread to the FTSE 250 index, which cheered more than 1% or 257.01 points to 22,806.89 amid a rally in pandemic-hit stocks including WH Smith and easyJet . The tour operator increased TUI rose 7.1p to 221.3p, despite brokerage Peel Hunt launching a cover with a ‘keep’ recommendation and a price target of 210p.
Music company ATC Group hits the right notes for Aquis debut
Music company ATC Group, which represents stars such as Nick Cave and Smiths guitarist Johnny Marr, hit the right notes on their debut on the Aquis Stock Exchange this morning.
The London-based company, aka All Things Considered Management, trades on the ATC ticker at 153p per share. Its action was up to 155.5p by mid-morning.
The company has raised £ 4.15million from the list, which implies a market cap of £ 14.7million. The cash will be used to invest in growth.
Its lockdown launch, the live concert production arm Driift, was the cause of the 2021 Glastonbury streaming event foiled by a computer glitch.
Driift raised money to support the musicians, selling more than 500,000 tickets to virtual concerts with stars such as Kylie Minogue and Niall Horan.
River & Mercantile Extends Submission Deadline
The battle for the takeover of asset manager River & Mercantile has been extended into the new year.
River & Mercantile, which is sued by AssetCo and Premier Miton, today extended until January 18 the deadline for a binding offer. Talks with the two suitors “remain in progress”.
AssetCo, the vehicle presidents of Martin Gilbert, said he “continues to believe” that a merger would be “very complementary” and “create significant value”.
CEO Campbell Fleming said, “River and Mercantile has great potential as an active manager of equity and infrastructure investments with people, clients and a product offering that would complement our existing business. “
River & Mercantile said there was no certainty of an offer from AssetCo or Premier Miton.
GSK Obtains US Approval For Apretude
GlaxoSmithKline’s joint venture for HIV drugs and research was strengthened today by the US regulatory approval of Apretude, a long-acting injectable option for HIV prevention.
Support from the United States Food and Drug Administration is a milestone for ViiV Healthcare, which is majority owned by GSK and backed by Pfizer and Shionogi.
GSK said the two-month dosage of Apretude has shown greater effectiveness than the current daily oral option in reducing the risk of acquiring HIV.
The US market is worth around £ 1.5bn, but Glaxo recently said it is expected to more than double over the next decade to reach £ 4-5bn.
Shares of GSK, which is in the process of separating from its consumer health division, rose 7.6p to 1,599.4p.
Square Mile office development approvals jump
The amount of City office space in new developments that got the green light during this year has increased, according to new data.
The City of London Corporation said in 2021 that its Planning and Transportation Committee decided to approve a total of 4.4 million square feet of new office space. This compares to 2.6 million square feet in the previous 12 months.
The figures, which show some developer confidence in post-pandemic offices, look at gross floor space and do not take into account the existing floor space of offices in developments or the floor space that will be used for d ‘other uses.
JD Sports Fashion leads the takeover of the FTSE 100
The FTSE 100 index rebounded 0.9% to 7,264, with Rio Tinto and Anglo American leading the rally after their shares improved by more than 2%.
JD Sports Fashion was up 4% and the owner of Primark Associated British Foods was up 3% in a better session for the retail industry. Rolls-Royce recovered 2.7p to 113.22p and British Airways owner IAG added 2.1p to 133.1p.
The FTSE 250 index was up 0.85% to 22,740.6, driven by gains of up to 3% for reopening stocks including WH Smith, Cineworld and low-cost airline easyJet.
BHP unification plan gains regulatory support
Double-listed mining giant BHP has taken a further step towards unifying its corporate structure under its existing Australian parent company.
BHP’s primary listing will be on the Australian Securities Exchange, with the London listing being downgraded to a standard listing. Based on the current rules, a unified BHP would not be eligible for inclusion in the FTSE 100 Index.
BHP said today that all regulatory and competition approvals have now been received ahead of shareholder meetings scheduled for January 20. If approved, the unification is expected to end on January 31.
Sentiment recovers after Monday’s fall
Global stocks rallied after falling sharply on Monday amid fears over the need for tighter restrictions to deal with the Omiron variant.
Improving risk sentiment helped Tokyo’s Nikkei 225 jump 2%, while CMC Markets forecasts an 82 point gain for the FTSE 100 index to 7280.
The first London theft lost 1% of its value yesterday, as Wall Street markets fell to a similar level after Democratic Senator Joe Manchin said he could not support the new Bill d President Biden’s $ 1.9 Trillion Build Back Better infrastructure.
Stocks including Tesla and Rivian Automotive fell sharply, but futures trading in the United States indicates a rally later in the day.
Michael Hewson of CMC said, “In a sign of sentimental volatility, we expect to see a positive opening as the ebb and flow continue.
“While concerns about Omicron remain very real, the prospect of further restrictions being implemented this side of Christmas has receded somewhat.”
Oil prices also reflect improving sentiment as Brent crude futures hovered just above $ 72 a barrel, up 1% today.