DB Live: Ireland cuts VAT; EE 5G boost; China grows; jobs data
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4.30pm: London lower
Sentiment remained negative among traders throughout the session with the FTSE 100 closing at 5,969.71, down 31.67 (0.53%).
SSE added 1.66% after agreeing to sell its 50% share in its Multifuel energy-from-waste ventures to Australian fund manager First Sentier Investors for £995m in cash as part of its £2bn disposal programme.
Stocks with exposure to the pandemic and related restrictions were sold. Aero engine maker Rolls-Royce was 6.03% lower and British Airways and Iberia parent IAG also lost ground, closing down 4.06%.
Pub chain Mitchells & Butlers was down 2.7%, cruise operator Carnival slid 6.04%, and travel company TUI fell 2.67%.
1.50pm: Irish VAT cut
Ireland’s Finance Minister has cut the VAT rate for the hospitality and tourism sector from 13.5% to 9% with effect from 1 November.
Paschal Donohoe said it was in recognition of the “unprecedented challenges” facing particular sectors of the economy.
The standard rate of VAT was cut from 23% to 21% from September until the end of next February.
12.30pm: Airport slump
Edinburgh Airport saw passenger numbers collapse during the summer amid more talks aimed at introducing testing for coronavirus.
11.45am: China’s economy grows
China’s economy strengthened in September, according to the latest government data, as Covid-19 restrictions around the world eased and both domestic and global demand picked up.
Exports rose by 9.9% year-on-year, largely in line with forecasts for growth of around 10%. Imports grew at their fastest pace this year, jumping 13.2% compared to August’s 2.1% decline. Most analysts had expected a far smaller rise of around 0.4%
A circular from TD Securities says: “”The data adds yet more evidence that China’s economy is on track for a robust recovery and, along with other data, will likely result in upgrades to growth forecast and reduced impetus for policy stimulus.”
10.30am: EE expands 5G
EE has expanded 5G coverage to more locations in the UK.
The BT-owned mobile operator said 10 places across Scotland are now connected to its high speed network.
The latest locations are Aberdeen, Barrhead, Stirling, Clydebank, Bellshill, Cumbernauld, Paisley and Motherwell.
Other additions in the UK include Aldershot, Blackpool, Castleford, Crawley, Mirfield, Oxford, Porthcawl, Shipley, Stafford and Warwick.
8.45am: London opens cautiously
The FTSE 100 was trading at 5,983.10, down 18.28 (0.30%) on concerns about the economic impact of new coronavirus-led business restrictions, with investors also booking profits on recent rises.
The UK’s unemployment rate rose by more than expected to 4.5% in the three months to August, ahead of the changes in furlough support.
Supermarket data from Kantar showed Morrisons market share up 10.1% in the 12 weeks to October from 9.9% a year ago, with sales up 12%. Sainsbury’s share fell to 14.9% from 15.3%, and sales rose 6.8%. Tesco’s market share was flat at 26.9% with sales growth of 9.2%.
The figures saw shares in Wm Morrison rise 1.1%, J Sainsbury was up 0.9%, and Tesco added 0.6%.
Pub chain Mitchells & Butlers was 3.3% lower on concerns over jobs.
7.30am: UK unemployment rises
The UK unemployment rate for the three months to August rose to 4.5% – its highest level in more than three years.
An estimated 1.5 million people were unemployed in the period, 209,000 more than a year earlier, the Office for National Statistics (ONS) said.
The rate is now equal to Scotland’s rate which remained unchanged over the period.
Christmas comes early
Shoppers appear to be starting their Christmas shopping early, with retail sales higher this September than last – and 40% of transactions taking place online.
Latest figures from the British Retail Consortium-KPMG monitor show retail sales grew by 5.6% in total in September compared to the same time last year, with 40.1% of sales taking place online, up from 30.8% a year earlier.
7am: French Connection ‘well positioned’ despite losses
Fashion chain French Connection reported an underlying loss of £(12.2)m compared to £(3.6)m in 2019, driven by the significant decline in sales and resulting additional one-off stock provisions, offset by cost savings across all areas. Revenue slumped by 53% to £23.9m.
Stephen Marks, chairman and chief executive said: “This has undoubtedly been the most difficult trading period that the Group has ever faced.
“Despite the unprecedented difficulties we continue to face alongside the rest of the High Street, having been able to secure the necessary financing we feel that we are well positioned to navigate an extended period of uncertain consumer demand but also ready to capitalise on any opportunities that may arise especially given the good performance of wholesale, while maintaining a very tight control of costs.”
SSE offloads assets
Perth-based energy firm SSE has agreed the sale of its 50% share in Ferrybridge and Skelton Grange multi-fuel assets in a £995 million cash deal.
In Asia overnight, Japan’s Nikkei 225 index closed up 0.2% on Tuesday. In China, the Shanghai Composite ended flat, while the stock market in Hong Kong was closed because of a typhoon.
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