Market report

Moneysupermarket energy hit | JD Sports delays results


5pm: Ukraine fears weigh on markets

The FTSE 100 closed at 7,537.37, down 66.41 points (0.87%) as geo-political tensions cast a cloud over global markets.

Brent oil was quoted at $92.65 a barrel at the equities close, down sharply from $96 at the close Wednesday, on growing hopes that talks on the Iran nuclear deal could soon bear fruit.

Danni Hewson, AJ Bell financial analyst said: “Markets never like uncertainty and that’s evidenced today by the falling oil price which has pulled down both BP and Shell on the FTSE 100, partly because of ongoing US/Iran talks, partly because conflicting reports about a Russian pullback have been keeping investors on their toes and glued to their screens.”

Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown, added: “Reports of firing in a border region and accusations that Moscow is orchestrating a false flag operation, an intent to pin the blame for starting conflict on Ukrainian forces, has ratcheted up tensions and led to more investors seeking less risky positions.”

Russian steelmaker Evraz ended the session as the worst performer, down 7.5%. Briitsh Airways parent International Consolidated Airlines lost 4.1%

Reckitt Benckiser ended the best performer, up 5.9%, after the household goods firm pointed to a margin improvement in the year.

John Menzies surged 24.79% to 582.5p after the aviation services provider’s takeover suitor said it has agreed to buy a 13.2% stake in the company at a significant premium.

3pm: JD Sports delays results

JD Sports is delaying its full-year results to allow auditors more time to assess the impact of being forced to Footasylum.

The Competition and Markets Authority (CMA) expressed concerns over the £90m deal struck in 2019 and in November ordered JD to sell the business.

JD, which owns the Tiso outdoor brand, was fined £5 million on Monday for exchanging commercially sensitive information in a secret meeting recorded in a car park by an unknown third party.

The leisurewear giant said the delay was to “ensure that KPMG have sufficient time to complete its global audit procedures and to allow the group to report on the outcome of the divestment of Footasylum Limited with greater certainty”.

Underlying pre-tax profits, which will exclude the fine, are expected to be at least £900 million.

11am: Menzies suitor swoops on shares

Shares in Edinburgh-based airport logistics business Menzies shot up by 24% today after its Kuwaiti suitor snapped up a 13.2% stake in the company.

Full story here

9.30am: Market dips on Ukraine concern

The FTSE 100 was lower on Thursday as reports of attacks in Ukraine helped inflame tensions which many thought had been doused by talk of Russian withdrawals earlier in the week.

Danni Hewson, financial analyst at AJ Bell, says: “Hopes a deal between the West and Iran could be salvaged put pressure on oil prices and saw index heavyweights BP and Shell fall.

“While Standard Chartered, something of an outlier among the UK banks given its emerging markets focus and a very limited footprint in Britain, got the sector’s reporting season off to a weak start with profit below expectations.”

The FTSE 100 was trading at 7,556.14, down 47.64 (0.63%).

8.15am: Whisky plan

A second new distillery in a week has been announced for an area once known as the capital of the whisky world.

Plans for the Dál Riata Distillery in Campbeltown follow a similar announcement at the weekend from R&B Distillers which wants to build a facility on the Kintye peninsula.

Full details here

7.30am: M&G deal

M&G has acquired investment manager TCF Investment to become a provider of model portfolio services.  The deal has been approved by the FCA.

Full story here


Consumers unable to find cheaper energy deals hit revenue and profits at price comparison site

The company said high wholesale energy prices meant there were no switchable energy tariffs available from October. There was no energy revenue in the quarter.

“Wholesale energy prices remain too high to return attractive switching tariffs to the market, despite the increase in the energy price cap,” said the company.

“We remain confident that the energy switching market will return strongly in the medium term but assume no energy revenue in 2022.  We nonetheless expect 2022 adjusted EBITDA to increase to around 2020 levels.”

Revenue for the year to the end of December fell 8% to £316.7 million while EBITDA was down 7% to £100.5m.

The company proposed a maintained dividend of 11.71p.

Global markets

US retail sales saw their biggest rise in 10 months in January, to a record high, but higher prices could limit the boost to economic growth this quarter.

The report from the Commerce Department on Wednesday showed underlying strength in the economy ahead of anticipated interest rate increases from the Federal Reserve starting in March.

Financial markets are pricing even odds on a 50-basis-point interest rate increase next month. However, the latest meeting of the Federal Reserve’s policy committee suggested there would be four interest rate hikes this year, rather than the six or seven that some were predicting.

The Dow Jones and Nasdaq declined 0.16% and 0.11%, while the S&P 500 index edged up 0.09% and the small-cap Russell 2000 finished up 0.14%.

Data showed Japan ran its biggest trade deficit in a single month in eight years in January, following Europe’s trade gap widening in December as energy prices surge.

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