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Shares have tumbled and oil prices are sharply lower following the detection of a new and more transmissible variant of Covid.
FTSE pares back Nu variant fears on rates hope
13:04 , Simon Freeman
The FTSE 100 has recovered some ground from the opening 3.5% panic wipeout but is still down a clunking 190 points from the morning’s panic sell-off.
The blue-chip index was at 7114 as traders paused for lunch, erasing November’s steady progress to reach a seven-week low.
The UK focused FTSE 250 remains slumped around 500 points down at 22776.
Thanksgiving Day in the US means Wall Street will only open for a half day, from 930am to 1pm (2.30pm to 6pm GMT)
BA owner IAG remains the biggest casualty, trading down 14% at 132.62p as hopes of a return to long-haul travel fade into the horizon.
Rolls-Royce, whose revenues depend on engine flying time, pared back its initial slump to level off around 10% off at 122.94p.
The partial recovery comes as savvier traders predict the return to uncertainty provoked by the detection of the hyper-mutated South Africa variant (now being called Nu) makes a rise in interest rates next month less likely.
Bets on a December hike are being unwound with expectations that interest will now be held until at least February.
Researchers are still trying to determine whether the newly discovered variant is more dangerous or contagious than its predecessors.
In the meantime, it’s a matter of “shoot first” and think about it later.
Retailers John Lewis and Currys report latest Black Friday data
15:40 , Joanna Bourke
The discount shopping bonanza that is Black Friday is underway, and some firms have shared some latest statistics.
Here are a few examples:
-Just before 2pm electricals retailer Currys said it had seen more than 56 online purchases per minute since the launch of its Black Friday deals yesterday morning.
-John Lewis & Partners said from 9am to 10am this morning, 17191 units were purchased, approximately 286 per minute through John Lewis.com. It added that trade was also beginning to build in physical shops.
-Barclaycard Payments, which processes nearly £1 in every £3 spent in the UK, has so far today (as at 1pm) seen a 23.3% increase in the volume of payments compared to the same period on Black Friday last year, and a 4.2% rise from the equivalent time in 2019.
City Comment: Keep lying to us
14:11 , Simon English
Ordinarily, the risk management department of a bank is not where you go looking for excitement.
For the dudes doing time inside (they are all dudes, don’t write in) a shift in capital adequacy ratios of any more than 0.5 percent is high voltage action.
They would have a party. If they thought anyone would come.
Just lately, the RMD’s are where it’s at, City wise.
How many government Covid loans have gone wrong? How many of the other loans made in the same period went right?
Moreover, since the loans are government backed anyway, and since politicians don’t like tricky economic news around Christmas, will there be any force put on the lenders to pretend that bad loans are good?
If you ask a bank about this scenario, it will scoff at the very idea of strict risk compliance laws being politically comprised in this way.
They ask: Have you met the guys in risk management?
Two glasses in the tone might change. Not to, “we are screwed” but more to “We don’t know how bad it is and think no-one else does either”.
As the year end approaches, banks are under some pressure from analysts and investors to tell the truth about these Covid loans, about what is really going on beneath the bonnet of the UK economy.
Lie to us.
Pretend and extend is a widely discredited economic strategy that I happen to like.
We can’t just keep imagining that everything is ok, say the folk who are against kicking cans down roads.
A Christmas wish to banks: keep lying to us I say, keep kicking, keep dissembling. If money were real, we’d be in trouble. If we keep acting like it is not, we might just get through…
Novacyt shines on test green light
13:41 , Simon Freeman
Novacyt offered a rare glimmer of sunshine for investors today with shares up by almost a third after UK health regulators gave its Covid-19 test the green light.
The diagnostics company will now apply to resume commercial sale of Genesig, which it expects to mitigate a previously forecast £3 million hit to revenues.
The real-time PCR test was among of the first brought to market but has become snared in an ongoing legal dispute over cancellation of a £150 million Government contract.
It is now among 60 products listed on the UK Health Security Agency's list of Coronavirus Test Device Approvals (CDTA).
Shares in the company, based in Camberley, Surrey, were up 93p, or 28%, to 425p against a 1.4% plunge across the rest of the AIM index.
CEO David Allmond said: “With the resumption of the sale of this product in the UK, we look forward to ensuring customers have access to this market-leading test during the winter season.”
Lidl names new CEO to lead the grocer’s GB business
13:41 , Joanna Bourke
Lidl GB has promoted Ryan McDonnell to be its next chief executive, with Christian Härtnagel leaving the role to lead the discounter’s Germany division.
The GB arm of the grocer, which this week revealed its target for 1100 stores by the end of 2025, said McDonnell will start in his new role on February 1.
Read more HERE.
Kurt Geiger new accounts show how pandemic hurt sales
11:43 , Joanna Bourke
Kurt Geiger is stepping up its presence on UK high streets, despite the shoe firm suffering a more than £150 million sales hit from lockdowns.
The chain, owned by private equity firm Cinven, has this year committed to opening eight new stores, in locations including Stratford and Brixton.
New accounts filed showed the move to invest came even after the pandemic severely hurt trade in the year to January 2021.
Kurt Geiger, which has more than 70 stores and 530 concessions worldwide, recorded a pre-tax loss of £19.4 million, compared with a £40 million profit in the prior year. Turnover plunged to £192.3 million from £347 million.
Gamesys takes over former Arcadia office space in London
11:36 , Joanna Bourke
An online gaming operator has agreed to take a large new UK head office at the West End building that was home to Sir Philip Green’s Arcadia before its collapse.
In the latest encouraging sign for the London letting market, after a tough year where working from home became common, Gamesys has completed a deal for around 100,000 square feet.
Around 1000 staff will be based out of the office and Gamesys is looking to hire more workers in the capital.
Read more HERE.
Broker shares rise on hope of second retail investor boom
11:34 , Simon English
IT was a grim day on the markets, but traders looking for bargains found themselves eyeing up the shares of the firms they work for.
Last year’s lockdown saw a surge in new punters buying stocks. Account opening rocketed at Hargreaves Lansdown, IG and CMC Markets as a new breed of investor decided to try their luck on the stock market.
That retail investor boom was supposed to be over, as the nation headed back to offices and resumed spending spare cash in Pret a Manger.
Fears that Brits could again be shut at home due to Covid variants and Tube strikes saw shares in the brokers rally.
Shares in CMC Markets, led by Lord Peter Cruddas, crashed in September after a profit warning confirmed the end of the Covid investor frenzy.
Today they jumped 4p to 240p. Rival spread betting house IG Group, where the chief executive is June Felix, rose 6p to 769p.
Markets crash on ‘Red Friday’
11:10 , Simon Freeman
A fresh wave of pandemic panic sent global financial markets into a tailspin today as fears over a “horrific” new Covid-19 variant sparked a mass sell-off.
The FTSE 100 was down by more than 3.5%, or 250 points in early trading — its worst day this year and one of the sharpest drops since the 8.6% crash of March 2019.
“If you are never in the office, you won’t make it around here"
11:08 , Simon English
The old BT would have mumbled about costs, shareholder value and privately complained that it was being set up to fail. It was a defensive business with a decent number of things about which to be defensive.
Jansen wants to change all that and in some ways already has.
The new HQ just open, One Braham in Aldgate, have a very different feel to the old one, in St Paul’s.
IAG down 20%, BP shares off 9%
08:24 , Graeme Evans
Europe's main stock markets have tumbled more than 3%, with the FTSE 100 index down 240 points at 7071.
Airline and leisure stocks are at the forefront of the sell-off as investors dump risker assets following the detection of a new and possibly vaccine-resistant variant of Covid-19.
British Airways owner IAG lost a fifth of its value and shares in Whitbread and InterContinental Hotels are down more than 6%, while Asia-focused luxury goods brand Burberry slid more than 5%.
The shadow over global recovery hopes sent Brent crude futures down by more than 4% to $78, causing BP shares to fall 9%.
The Nikkei 225 in Tokyo earlier closed 2.5% lower.
FTSE 100 set to fall 120 points
07:36 , Graeme Evans
Oil prices and stocks in Asia have fallen sharply amid concerns over the discovery of a new and more transmissible variant of Covid-19.
The Nikkei fell 2.5% in Tokyo and the Hang Seng in Hong Kong slumped to its lowest level in almost two months. Fears over the potential impact on economic demand meant Brent crude futures fell 2.5% to around the $80 a barrel mark.
Markets in Europe are expected to see a sharp decline, particularly after a week of speculation about additioanal restrictions to deal with existing strains of the virus.
CMC Markets expects the FTSE 100 index to open 120 points lower at 7190. Its chief markets analyst Michael Hewson said thin liquidity levels as a result of the US thanksgiving holiday may have influenced the scale of the reaction in Asia.
However, Oanda's Jeffrey Halley added: “With the Delta wave in mind from earlier this year, investors are likely to shoot first and ask questions later until more is known about it.
“Viruses do not mutate to become less effective, so assuming the worst is probably the safe option for now. The return of US markets this afternoon, mostly for a half-day session, is unlikely to change that narrative ahead of the weekend.”
Leisure-focused stocks will bear the brunt of today's sell-off, having recovered ground in the previous session after gains of almost 3% for hotel chains Whitbread and IHG.