Stocks start the week on the back foot
Stock markets around the world are painted red this afternoon, with both the FTSE 100 and 250 set to close lower.
The bluechip index is down almost 50 points with less than 10 minutes of the trading day, while the mid-cap index is almost 80 points lower.
Losses are worse on the other side of the Atlantic, with the Nasdaq down 1.8% and the S&P 500 1.2% lower.
Investors have taken flight after Chinese inflation jumped ahead of forecasts and amid stringent Covid-19 lockdowns and unrest in the country. These days, when China’s economy sneezes, the market catches a cold.
That’s all from us on the blog today, join us again tomorrow.
Twitter shares drop after Elon Musk pulls out of board position
Shares in Twitter opened almost 1% lower in the US on the back of news that Tesla boss Elon Musk was no longer going to join its board, and continued to fall in value as the day commenced.
The Dow Jones almost 91 points lower at 34,630.27 and the S&P 500 trading 25 points lower at 4,462.64 at the opening bell on Wall Street on Monday morning.
While the Nasdaq opened 119 points higher, it dropped away in the first few minutes of trading to settle at around 13,505 points as the threat of a more hawkish Federal Reserve continues to drive the market.
BMW teams up with UK-based electric charging point manufacturer
BMW Group has signed a partnership with Pod Point, a UK provider of charging points for electric vehicles.
Under the terms of the contract, which will run for three years, Pod Point will become the preferred supplier for home charging points for BMW and Mini, and will be recommended to customers when they purchase a car.
Since forming in 2009, Pod Point has manufactured and sold more than 137,000 charging points across the UK.
Schroders completes deal to buy stake in renewable energy investor
Schroders has completed its deal to buy a 75% shareholding in renewable infrastructure investment specialist Greencoat Capital as it seeks to build its green energy business amid wider natural resource supply issues.
Greencoat manages £6.8 billion on behalf of its clients, which are mostly in Europe, although the company is expanding into the US.
Peter Harrison, CEO of Schroders Group, said: “As governments around the world look to accelerate towards net zero goals, providing capital for the energy transition will become ever more important.”
He said the company was experiencing high demand from clients for renewable infrastructure investments, particularly those with long-dated, inflation-linked returns.
This had increased thanks to recent heightened geopolitical uncertainty, which has resulted in a shortage of some natural resources.
Greencoat will become part of Schroders Capital, the company’s private markets division.
Amigo Loans rescue moves closer
The FCA said it will not go to court to object to Amigo’s new proposals, “which represents an improvement on last year’s failed proposal and has the support of the Independent Creditors Committee, which was set up to advance the interests of those customers owed redress.”
Under new plans, vulnerable Amigo Loans customers who were mis-sold loans could receive up to 41p in the pound in compensation.
The controversial sub-prime lender had its previous plan to compensate customers, called Schemes of Arrangement, thrown out by the High Court last year after the FCA objected to the amount people would receive. Amigo offered just 10p in the pound.
Today, the company said there had been “a significant improvement in the fairness of the schemes” thanks to an improving financial picture and some cost savings within the business.
Ascential mulls spin-off
Ascential, which advises retailers and technology companies through brands including Flywheel and Perpetua, is currently listed in London, but could demerge its digital operations and list them separately in New York.
Its events operations, which include Money20/20 and RetailWeek-branded conferences, are expected to remain in the UK.
News of the potential split was first reported by Sky News over the weekend and confirmed by the company this morning.
Tortilla wraps up first year as a listed company with record revenues
Burrito-making fast-food chain Tortilla wrapped up its first year as a public company with record results.
Revenues jumped 79% to reach £48 million, while profits reached £1.4 million, led by increased sales of home deliveries. Chair Emma Woods attributed the success of deliveries to “how well the product travels.”
The company plans to roll out 45 new stores over the next 5 years, including new outlets at Gatwick airport and Chessington World of Adventures.
Shares opened 1.5% up in early trading.
China stocks struggle, FTSE 100 lower
Stocks with a China focus were hit today as a larger-than-expected inflation figure added to worries over the country’s zero-tolerance approach to Covid-19.
The selling in London came as the Shanghai Composite and Hong Kong’s Hang Seng index fell by around 3% after Beijing disclosed a three-month high for annual price growth at a time of ongoing pandemic disruption in several major cities.
London-listed Prudential, which is focused on sales in Asia and Africa, fell 2% and miners including Anglo American dropped on fears about weaker economic demand.
Scottish Mortgage Investment Trust, the owner of stakes in tech-focused China stocks including Alibaba and Tencent, was London’s biggest top flight faller at 3% lower.
The wider FTSE 100 index stood 35.68 points lower at 7633.88, despite gains in the banking sector after Lloyds and Barclays both rose 1%. Education publisher Pearson lifted 2% or 11.6p to 773.8p after Goldman Sachs unveiled a target price of 1026p.
The FTSE 250 index fell 47.68 points to 21,126.64, with Aston Martin Lagonda the biggest faller on fears over slower demand from China. Shares reversed 6% or 48.8p to 821p, just ahead of the 12p to 245p decline for Fidelity China Special Situations.
Wood Group jumped 14% as the engineering services business said delayed annual results will be released next week with no change in the carrying value of Aegis Poland, the missile defence contract inherited in its Amec Foster Wheeler takeover.
Shares rallied 21.05p to 175.9p.
On AIM, podcast firm Audioboom fell 6% in a blow for major shareholder Nick Candy, the property tycoon. The drop of 115p to 1935p came despite the platform posting a doubling of first quarter revenues to a record $19.7 million (£15.1 million).
Slow start for London’s IPO market this year
In contrast, there were 12 IPOs on the main market and two on AIM in the same period in 2021, which raised a combined total of £5.6 billion – 14 times higher than this year’s opening quarter.
Scott McCubbin, UK and Ireland IPO leader at EY, said the London market had experienced a difficult start to the year.
China-focused stocks fall, Wood Group surges 11%
China-focused stocks came under pressure today after a bigger than-expected inflation figure added to concerns over the country’s ongoing battle against Covid-19.
Shares in Hong Kong-based Prudential fell 2% and mining stocks including Anglo American also declined amid fears about the economic impact of tighter measures to curb the pandemic, particularly in Shanghai.
Scottish Mortgage Investment Trust, which has stakes in tech-focused China stocks including Alibaba, also fell 2%.
The FTSE 100 index declined 14.75 points to 7654.81, with the resilient performance assisted by gains of more than 1.5% for banking stocks Lloyds, Barclays and NatWest.
The FTSE 250 index improved 17.21 points to 21,191.53, led by Wood Group as it said that delayed annual results will be released next week with no change in the carrying value of its Aegis Poland contract. Shares jumped 11% or 17.65p to 172.5p.