Market report

Sainsbury’s heads market rebound | private equity deals rise


5pm: Equities close higher

Sainsbury's Local

Traders shrugged off worries over the pandemic and the Fed’s position on stimulus tapering to push leading equities higher. The FTSE 100 closed 21.12 points higher at 7,109.02, thought the FTSE 250 edged 10.4 points lower, despite hitting an all-time high in intraday trade.

Sainsbury’s led the charge among the blue chips, up 15.37% (45.3p) to 339.5p on the back of weekend speculation that it has attracted private equity interest. Tesco shares closed up 2.4% and online grocer Ocado 1.7%.

Brent crude was trading at $68.44 a barrel, rallying from $66.02 late Friday.

Shares in BP closed up 2.5% and Royal Dutch Shell‘s ‘A’ and ‘B’ stock rose 2.1% and 1.9% respectively..

1pm: Holiday lets booming

Holiday let owners in Scotland are in the midst of one of the busiest summers on record – with the likelihood that next year will also be a bumper season. 

New research reveals that 31% of Brits, and 76% of Scots, will enjoy a staycation in Scotland this year.

With foreign travel restrictions still in place, Sykes’ Staycation Index highlights a 22% uplift in Scotland holiday let bookings for this summer compared to 2019, and a 46% increase for autumn and winter – a silver lining for holiday let owners after a difficult year.

11am: Green jobs created

Scottish Power is creating 152 “green” jobs, of which 135 will be based in Scotland.

These new roles will be in engineering, construction, sustainability, analysis, safety and environmental planning and will be listed on a new Green Jobs Workforce Academy website launched today by the First Minister Nicola Sturgeon.

9.30am: Private equity deals rise

The volume of private equity deals across Scotland in the first half of the year rose 54.5% against H1 2020 levels, according to new research from KPMG.

The value of deals completed also rose 17.5% compared to levels seen in the same period in 2020.

James Kergon, Scotland senior partner, said: “Many predicted 2021 as the year for greater stability and increased market confidence, and the burst of transaction activity we’ve seen in H1 is a strong indicator that the bounce-back is well underway.”

9am: Markets rebound

London Stock Exchange

Markets rebounded after last week’s rout as they look ahead to the Jackson Hole meeting and any signals on US tapering of stimulus measures.

The FTSE 100 was trading 46.39 points higher at 7,134.19 just after the open, falling to 7,107.13, up 19.23 (0.27%) after the first hour.

Oil prices were also higher. See Global Markets below.

Sainsbury’s shares surged 8% to 318.75p following a report that US private equity firm Apollo is considering a bid for the UK supermarket chain.

Airline easyJet flew 1.63% higher at 812p after appointing former RBS and RSA CEO Stephen Hester as chairman.

WPP gained after saying it had bought Satalia, a technology company offering artificial intelligence solutions for clients, for an undisclosed sum.

Mitie was also trading up after agreeing to sell its document management business to Swiss Post Solutions for £40m.

Shaftesbury nudged higher as the West End property owner reported a recovery in rent collection and said footfall was also showing signs of improvement as shoppers returned after the easing of Covid restrictions.

7am: Hester takes easyJet chair

Former Royal Bank of Scotland chief executive Stephen Hester is to become chairman of airline easyJet.

Mr Hester will join the board as a non-executive director on 1 September and will succeed John Barton as chairman on 1 December.

Full story here

6am: Fair pay report

Research from the Institute for Public Policy and Research (IPPR) Scotland found many jobs are not providing workers with “enough to make a decent life for themselves and their families”.

It said women and minorities are particularly badly served by the labour market. The group is calling on the Scottish Government to implement wide reforms to ensure everyone has a “living income” – enough money to lead a good life.

Recovery from the coronavirus pandemic should be linked to these efforts, according to the researchers.

Global markets – oil and equities recover

Oil prices rebounded after suffering their biggest week of losses in more than nine months as investors anticipated weakened fuel demand worldwide due to a surge in COVID-19 cases.

Brent, the global benchmark, surged 1.79% to $66.35 per barrel (bbl), while West Texas Intermediate (WTI) added 1.75% to $63.23.

The FTSE 100 looked set to open in positive territory, building on Friday’s modest gain after shares in China also rebounded after last week’s sharp drop.

Authorities in China reported no new local COVID-19 cases for the first time since July, while technology and healthcare stocks helped Hong Kong’s Hang Seng rise 1.8% after a two-day fall. The Shanghai Composite was 1% higher.

More than $560 billion was wiped from Hong Kong and mainland China exchanges last week amid concern over which sectors China’s regulators might target next.

The Nikkei 225 in Tokyo shed 3.4% last week to its lowest since January. Bargain hunting helped the index bounce 1.2% morning.

US Federal Reserve chairman Jerome Powell will deliver his keynote speech at Jackson Hole this week, which has been moved online because of pandemic restrictions.

Analysts will be looking for clues to the timing of tapering of stimulus measures with expectations that it will he announced in September if the August non‑farm payrolls figure is strong.

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