Vladimir Putin’s intervention in the gas market and a short-term deal on the US debt ceiling look to have calmed the nerves of traders after yesterday’s wild session.
The FTSE 100 index rallied 1%, helped by natural gas futures easing to 227p a therm from the 400p seen yesterday when investors were spooked by inflationary fears and the prospect of earlier-than-expected rises in interest rates.
House prices, meanwhile, remain on an upward path after Halifax reported a new record monthly average figure of £267,587as the race for space continues.
FTSE 100 Live Thursday
London reopening boosts Robert Walters and Workspace
12:34 , Oscar Williams-Grut
Robert Walters today upgraded its profit forecasts, while Workspace boasted of an uptick in occupancy at its London sites.
Robert Walters saw a 26% jump in third quarter gross profits to £91.8 million. Business was up across the UK and Europe, with particularly strong demand in Asia. Momentum “accelerated” in London, with lawyers, techies, and commercial finance experts most in demand across the economy.
Shares rose 28p, or 3.8%, to 760p.
Meanwhile, FTSE 250 firm Workspace said occupancy across its 60 London sites was up 2.7% to 85.6% in the second quarter of its financial year.
Shares gained 32p, or 4%, to 830p.
Gas price crisis: ‘This is far from over’
12:15 , Oscar Williams-Grut
UK gas prices spiked to record levels yesterday before dropping around 100p per therm after Russian president Vladimir Putin agreed to pump more supply to Europe. He had at first been reluctant and tied more supply to European approval of the new Nordstream 2 pipeline.
Day-ahead gas futures were down 13p to 218p per therm this morning. The price had climbed as high as 355p per therm on Wednesday.
Experts said upward pressure on prices was likely to continue despite increased supply.
“The winter season is barely a week old and global demand remains strong, supply tight — this is far from over,” said Henry Edwardes-Evans, an energy expert from S&P Global Platts. “Nobody can say where prices will settle — price movements are too volatile and reactive to even relatively modest news flow.”
NatWest faces huge money laundering fine
11:24 , Simon English
NATWEST today pled guilty to three accounts of money laundering and can expect a huge fine from watchdogs keen to clamp down against crime.
The bank, previously Royal Bank of Scotland admitted that it failed to comply with the rules over a four-year period between November 2012 and June 2016.
That’s a blow to Alison Rose, the newish chief executive trying to reinvent the bank that went bust under the leadership of Fred “The Shred” Goodwin and had to be bailed out by the taxpayer.
Risk appetite returns
10:26 , Graeme Evans
The clouds lifted for stock markets today after US politicians heeded warnings of a “catastrophic outcome” should they fail to raise the country’s debt ceiling in time.
The move by Senate leader Mitch McConnell offering a short-term debt limit increase in order to avoid a national default provided some relief for Wall Street, despite the truce doing little more than delay the issue until December.
Treasury secretary Janet Yellen earlier warned their failure to agree an extension would likely trigger a recession, putting added pressure on sentiment at a time of rising global jitters over the inflation and interest rate outlook.
The S&P 500 and Nasdaq closed almost 0.5% higher, encouraging bargain hunters back into the London market after Vladimir Putin’s intervention in the gas market.
The FTSE 100 index rose by more than 1% at one point and later stood 51.94 points higher at 7047.81 following gains of more than 3% for miners including Anglo American.
Tomorrow’s all-important jobs report in the United States means the respite may not last long as a strong figure will be seen as the green light for the Federal Reserve to begin plans to taper economic stimulus.
A particularly weak number has the potential to stoke stagflation fears through the toxic combination of rising prices and low growth.
FTSE 100-listed packaging and paper giant Mondi revealed that its input costs were significantly higher in the September quarter but that it has so far been successful in passing on these energy, resin, transport and chemical overheads.
Shares rose 19p to 1,807p after Mondi allayed fears that demand for its products might be affected. Fellow packaging firm Smurfit Kappa also rose 88p to 3,850p.
The FTSE 250 index improved 95.22 points to 22,481.84, with British Gas owner Centrica among those 2% higher. Rising gas prices appear to have done it no harm with shares now up 18% over the past month as smaller rivals fall by the wayside.
On AIM, Victorian Plumbing fell further from June’s debut price of 262p after the bathroom products firm said revenues growth moderated over the summer. Shares fell 19p to 221p, even though full-year earnings are ahead of market expectations.
Cheers: Revolution Bars reports strong trading performance
10:40 , Joanna Bourke
People heading out to enjoy cocktails post-lockdown has helped Revolution Bars to enjoy trading well ahead of expectations.
The bar chain said between July 19 and October 2 it recorded comparable sales that were 17% above the same period two years ago, before the Covid-19 crisis.
The hospitality sector was able to reopen in July.
Read the full story HERE.
Workspace sees SMEs flock back to London offices
09:07 , Joanna Bourke
SMEs are leading the way back to the office, the boss of landlord Workspace said as he reported a pick-up in lettings and building use.
Graham Clemett said “there are positive signs of momentum”, with over 1000 enquiries, 633 viewings and 175 lettings agreed at his sites last month. He added that was better than what was seen pre-pandemic.
The company, which has offices across 60 locations in London, offers flexible leases, typically two years with options to exit after six months, and scope to take on extra space when needed. It is popular with start-ups and SMEs.
Read the full story HERE.
Debt deal lifts FTSE 100
08:19 , Graeme Evans
The FTSE 100 index has opened more than 1% higher at about 7070.
Richard Hunter, head of markets at Interactive Investor, said: “Risk appetite has briefly returned for investors, although sentiment remains delicately poised.”
The mood has been helped by progress on debt ceiling talks in the US after Senate leader Mitch McConnell offered a short-term debt limit increase to avoid a national default.
London-listed mining stocks benefited from the improved sentiment, with Anglo American shares 3% higher and Glencore up 2%.
08:03 , Graeme Evans
Gas prices came off their record high yesterday after Russia announced it was ready to increases supplies to help Europe avoid an energy crisis.
But with gas futures still remaining at elevated levels, there’s every chance households will see a sharp spike in their living costs this winter as companies pass on much higher overheads.
Bank of America’s UK economist Robert Wood now expects the CPI measure of inflation to peak in April at 5.1% alongside a figure of 5.8% for the RPI benchmark, which is still used to set train fares and student loan rates.
His note published yesterday forecasts a 45% hike in Ofgem’s price cap in April, rather than previous expectations for a 25% rise.
UK house prices climb, as ‘race for space’ continues
07:54 , Joanna Bourke
Halifax said that average prices in September hit a record £267,587, which was up 1.7% month on month, and 7.4% higher than the same time last year.
Russell Galley, the mortgage lender’s managing director, said: “This rate of monthly growth was the strongest since February 2007.”
Read the full story HERE.
07:48 , Graeme Evans
Even Bitcoin was put in the shade by the spectacular gas price volatility yesterday, with the cryptocurrency up a comparatively modest 7% to above $55,000 yesterday.
It continues to trade at close to that level this morning, having yesterday received more institutional endorsement when billionaire George Soros’s investment firm said it owned some coins.
Bitcoin is now at a five-month high after rallying by as much as 27% during this month.
Gas prices steady
07:30 , Graeme Evans
The London market is set for a calmer session after yesterday’s intervention of Russian president Vladimir Putin helped to peg back soaring natural gas prices.
Gas futures for November delivery soared above 400p a therm at one point yesterday, fuelling inflation fears and sending the FTSE 100 index down 1%. The gas figure is now back at 266p, while Brent crude has eased slightly to just above $80 dollars a barrel.
Hopes of a US debt ceiling compromise are also helping sentiment after Wall Street reverse losses to finish in positive territory, with the S&P 500 and Nasdaq both close to 0.5% higher.
The prospect of tomorrow’s jobs report in the United States means the uncertainty hasn’t gone away, however, as a strong figure will be seen as the green light for the Federal Reserve to begin plans to taper economic stimulus.
A particularly weak number has the potential to stoke stagflation fears, which is the toxic combination of rising prices and low growth.
After yesterday’s wild session, the FTSE 100 index is expected to open about 60 points higher at 7055.