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Frasers scraps guidance; Shell stake sale, writedown

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4.30pm: Stocks fall on border worries

Covid worries and the cross-Channel crisis saw the FTSE 100 close 112 .86 points (1.7%) lower at 6,416.3. The FTSE 250 tumbled 424 points, 2%, to 19,692.

CMC Markets UK analyst David Madden said: “It is bad enough that large portions of Britain will have to deal with harsher restrictions because of the fear surrounding the fast spreading strain of the coronavirus, but now many countries are distancing themselves from the UK. The isolation treatment the UK is receiving has rocked market confidence all over Europe.”

Travel stocks were among the hardest hit. British Airways owner IAG was the biggest faller, down 12.45p (7.96%) at 143.9 while EasyJet fell 7.2% to 757.2p.

In the US, the Dow fell 114 points, 0.4%, the Nasdaq Composite tumbled 110 points, 0.9%, and the S&P 500 lost 1%.

11am: Retail sales flatten

Retail sales volumes recovered after two months of sharp declines to stand broadly flat for the year to December, with retailers viewing sales as good for the time of year to the greatest extent since March 2019. Orders placed also broadly stabilised after 13 consecutive months of decline.

The CBI’s latest monthly Distributive Trades Survey – which aggregated the views of 143 businesses, including 81 retailers – also found that internet sales grew at an above average pace for the third consecutive month.

9.30am: Baxters US deal

Baxters Food Group has acquired a US-based contract manufacturer of processed foods.

Full story here

8.15am: EICC conference deals

The Edinburgh International Conference Centre (EICC) has secured three major conferences for 2021 in the hope that the vaccine will soon allow mass gatherings to take place. 

Full story here

8am: London opens lower

As forecast, the FTSE 100 fell this morning following the closure of borders because of the latest Covid alarm. The index was 78.3 points (1.2%) lower at 6,450.91.

House of Fraser (LDC)

7am: Frasers scraps guidance

Mike Ashley’s Frasers Group, which includes Sports Direct and Jenners, said the closure of non-essential shops “with no notice” has forced it to scrap its guidance of 20% to 30% improvement in underlying EBITDA next year.

Analysts are pondering the impact of the latest measures on Mr Ashley’s planned bid for Arcadia or Debenhams.

Frasers is among a number of potential bidders, including Next and Boohoo, for Sir Philip Green’s collapsed Arcadia group. First round bids are due in today.

shell

Shell update

The oil giant said it will write down $3.5 to $4.5 billion in the value of oil and gas assets in 2021, the latest in a string of impairments this year as it adjusts to a weaker outlook.

It has agreed to sell a 26.25% stake in its Queensland Curtis LNG facilities to Global Infrastructure Partners Australia for $2.5 billion, helping the oil major meet its annual target for divestments.

Adjusted upstream earnings are expected to show a loss in the current price environment.

Production is expected to be between 2,275 and 2,350 thousand barrels of oil equivalent per day, reflecting hurricane impacts in the US Gulf of Mexico (between 60 and 70 thousand barrels of oil equivalent per day) and the effect of mild weather in Northern Europe in the first half of the fourth quarter.

Countrywide / Sigma

Countryside Properties has further expanded its strategic relationship with Sigma Capital, a specialist Private Rental Sector provider.

The new agreement will deliver up to 5,000 PRS homes across England over the next three years.

Markets

London is set to open lower as a new Covid-19 variant led to further restrictions in the UK and travel bans from Europe.

IG says futures indicate the FTSE 100 index of large-caps to open between 55 and 63 points lower after closing down 21.88 points, or 0.3%, at 6,529.18 on Friday after the latest restrictions were announced.

The lower open in London comes as things have gone from “bad to worse” in terms of virus restrictions in the UK, said CMC Markets’s David Madden.

lorries queuing

Eurotunnel, Port of Dover and Eurostar all shut the UK-France crossing yesterday.

Shares in easyJet, British Airways owner IAG and Ryanair were all expected to fall sharply, along with hoteliers such as InterContinental and Premier Inn owner Whitbread.

Sterling dropped 1.2% to $1.336 on Monday morning as the situation appeared to be deteriorating. A Cabinet meeting is expected to be called in Downing Street on Monday morning.

Oil prices dropped about 3% ($1.54) to $50.72 a barrel by 0510 on Monday as the new coronavirus strain that has shut down much of the United Kingdom fuelled worries over a slower recovery in fuel demand amid the border closures in Europe. The slide in oil followed seven weeks of gains as investors were encouraged by the rollout of Covid-19 vaccines.



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