FTSE 100 Live: Blue chip index ends the day higher, even as UK Q3 GDP figures disappoint

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  • Joanna Bourke
    British historian
 (ESI)
(ESI)

The UK's economic recovery slowed in the third quarter by more than first thought, figures showed today.

GDP grew by 1.1% compared with the initial 1.3% estimate, having rallied by 5.4% in the April to June quarter due to the easing of Covid-19 restrictions.

Despite the downward revision by the Office for National Statistics, stronger-than-expected data in 2020 means the economy is now closer to pre-pandemic levels.

FTSE 100 Live Wednesday

  • UK GDP figure for Q3 revised down

  • Metro Bank fined £5.4m for reporting failures

  • Novartis buys London biotech for £1.1 billion

FTSE 100 ends the day higher, even as UK Q3 GDP figures disappoint

Wednesday 22 December 2021 17:02 , Joanna Bourke

The FTSE 100 index ended Wednesday up 0.61%, or 44.25 points, to 7341.66.

Firms that saw gains include Taylor Wimpey, up more than 2%.

The housebuilder said the CMA's investigation into the historical sale of leasehold properties with doubling ground rent clauses by the company is closed, following the agreement of voluntary undertakings.

In other news today, figures showed the UK’s economic recovery slowed in the third quarter by more than first thought. Across London’s blue chip index there was a cautious mood earlier, with yesterday's buy-the-dip rally giving way to lacklustre trading.

Michael Hewson, chief market analyst at CMC Markets UK, said: “It’s been a subdued day for European markets, with the FTSE 100 spending most of the day drifting in and around the flat line, as markets absorb fresh news flow around the Omicron strain.”

But the index finished higher.

That is all for today from the Evening Standard’s City desk. Back tomorrow.

LondonMetric Property in £122m acquisition

Wednesday 22 December 2021 13:24 , Joanna Bourke

Warehouses firm LondonMetric Property has bought Savills IM UK Income and Growth Fund in a £122 million deal.

The fund owns a portfolio of 15 assets across 482,000 sq ft, including sites in Croydon, Hounslow and Greenwich.

Tenant demand for storage and distribution space has been high during the pandemic.

Andrew Jones, chief executive of LondonMetric, said: "Following our equity placing last month, we are pleased to have quickly invested a substantial proportion of the proceeds into this high quality portfolio.”

He added: “Reflecting their London & South East weighting, we expect these assets will continue to perform strongly as high occupier demand and diminishing warehouse supply drive rental growth higher."

FTSE 100 index edges up slightly at lunch time

Wednesday 22 December 2021 13:03 , Joanna Bourke

London’s blue chip index was 5.44 points higher at lunch time on Wednesday.

There was a cautious mood earlier, with yesterday's buy-the-dip rally giving way to lacklustre trading today.

Victoria Scholar, head of investment at Interactive Investor, said: “The FTSE 100 opened on a softer note, giving back some of yesterday’s gains amid a mixed picture for broader European indices. This the first calm moment of the week for equity markets after Monday’s wobble and yesterday’s recovery as Christmas draws closer.”

Shortly after 1pm the FTSE 100 index was up 5.44 points to 7302.85.

Headlines from this morning include:

*UK GDP data shows economy was slowing even before Omicron, says ONS

*Metro Bank fined £5.4 million by the Bank of England over accounting errors

*Novartis to buy London biotech Gyroscope Therapeutics for £1.1 billion

*Landsec increases ownership of Bluewater centre in £172m deal, as retail rents stabilise

Maternity wear brand Seraphine names new finance chief

Wednesday 22 December 2021 11:24 , Joanna Bourke

Maternity wear retailer Seraphine Group has appointed Lee Williams as chief financial officer, and he will join the company in the first half of 2022.

Lee joins from French Connection Group, where he is currently finance chief. Prior to working there he was group director of finance at online fashion giant Asos.

Serpahine said that John Bailey has announced he is to step down as finance director to pursue other opportunities. Bailey will remain with the brand “for a sufficient time so as to ensure a smooth transition of the finance function” to Williams.

Retailers in focus as caution returns to FTSE

Wednesday 22 December 2021 10:09 , Graeme Evans

Predicting the retail winners and losers in next month's Christmas trading updates will be harder than ever after last-minute shopping trips were disrupted by Omicron.

But analysts at Peel Hunt have done their best after identifying Hotel Chocolat, JD Sports Fashion, Dunelm and Next as stocks where trading should have filtered through to the bottom line.

While not Christmas focused, DFS and Halfords both look placed to outperform and the broker said there should be progress — although not upgrades — from Superdry and ASOS.

It added: “We think that peak trading will be broadly ‘fine’ for most, although the challenge of supply chain and inflationary pressures is likely to mean that upgrades are few and far between.”

This view echoed the cautious mood of the London market today, with yesterday's buy-the-dip rally giving way to lacklustre trading.

The FTSE 100 index fell 11.26 points to 7286.15 and the FTSE 250 index improved 0.4% or 86.39 points to 22,906.69.

AJ Bell's investment director Russ Mould said: “Investors are preparing to go into hibernation for Christmas and will hope by this time next week we’ll know a lot more about the trajectory of Omicron and the likelihood of further restrictions to contain it, and just how long those curbs will be in place.

“For now the markets, bar the odd day, have just about managed to hold on to the idea that, to employ central bankers’ favourite word of 2021, Omicron’s impact will be transitory.

“If that changes, we could see a more pronounced sell-off in global stocks as growth expectations for 2022 are rapidly reset.”

One of the biggest moves of the session came from FTSE 250-listed life sciences investor Syncona in the wake of today's sale of gene therapies business Gyroscope Therapeutics to Swiss drugs giant Novartis for £1.1 billion.

Syncona co-founded Gyroscope in 2016 and will generate initial proceeds of £334 million from the sale, representing a £180 million uplift to its current holding value.

Shares jumped 8.5% or 17p to 217p as Syncona also said it retained exposure to Gyroscope's development based on the achievement of certain milestones, with the potential to generate a further £255 million of proceeds.

Chief investment officer Chris Hollowood said: “We look forward to seeing Gyroscope fulfil its potential during the next phase of its growth with Novartis.”

Darker outlook for UK economy

Wednesday 22 December 2021 09:20 , Graeme Evans

Today’s figures showing that the UK economy had less momentum than first thought predate the recent surge in Covid-19 infections currently weakening activity.

As Capital Economics points out, the prospect of tighter restrictions in January is further darkening the outlook.

Its UK economist Bethany Beckett expects GDP growth to fall by 0.1% month-on-month in December and said that risks to already subdued forecasts for the start of next year lie to the downside.

Property giant Landsec buys additional stake in Bluewater centre

Wednesday 22 December 2021 09:10 , Joanna Bourke

Property giant Land Securities has purchased an additional 25% share in the Bluewater shopping centre for £172 million, demonstrating a vote of confidence in the retail real estate sector.

The FTSE 100 firm pointed to retail rents and values starting to “stabilise” as the purchase from Lendlease Retail Partnership was announced.

Landsec already owned 30% of the Kent site, where there is a cinema and brands such as Apple, Primark and Zara have stores.

Read more HERE.

Metro Bank fined for pre-2019 failings

Wednesday 22 December 2021 09:05 , Graeme Evans

Metro Bank is to pay a £5.4 million fine after the Bank of England took enforcement action over the challenger bank's failure to act with “due skill, care and diligence” in the reporting of its capital position.

The penalty from the Bank's Prudential Regulation Authority (PRA) relates to failings identified between 2016 and 2019.

In January 2019, Metro's shares plunged after it revealed a £900 million adjustment to its assessment of risk-weighted assets because it had applied the wrong weighting to certain commercial loans.

Whilst Metro Bank remained in compliance with its minimum capital requirement, the error resulted in an inaccurate picture being presented to the PRA.

In its findings, the regulator said the bank pursued a rapid growth and expansion plan without ensuring governance arrangements, systems and controls kept pace.

Sam Woods, the Bank's deputy governor for prudential regulation, said: “We expect firms to invest appropriate and adequate resources to ensure that they submit accurate regulatory returns.

“In this case, Metro Bank failed to meet the standards of governance and controls expected of it, resulting in today’s enforcement action.”

In response, Metro said it has since made significant improvements to its regulatory reporting processes and controls as well as strengthened its broader risk management and governance.

Read more here

Novartis buys London biotech for £1.1 billion

Wednesday 22 December 2021 08:54 , Oscar Williams-Grut

Swiss drugs giant Novartis has agreed a deal to buy a London gene therapy startup for $1.5 billion (£1.1 billion).

Novartis will pay $800 million (£604 million) for Gyroscope Therapeutics now and has the potential to make additional milestone payments of up to $700 million (£528 million).

Gyroscope, founded in 2016, develops gene therapies to treat eye issues. The company has developed the world’s first treatment for geographic atrophy (GA), an advanced form of dry age-related macular degeneration that leads to blindness.

Gyroscope was cofounded by Syncona Investment Management, a London-listed company that specialises in developing life sciences businesses. Syncona said the sale to Novartis delivered a 55% return on its investment in the project. The sale should bring in £334 million of cash when the deal closes.

Shares in Syncona rose 17p, or 8.5%, to 217p. Novartis was 0.3p, or 0.1%, lower at 79.08p in Zurich.

Read the full story.

Wednesday 22 December 2021 08:51 , Oscar Williams-Grut

Metro Bank today became the latest lender to be punished by watchdogs in a busy period for bank malfeasance.

The challenger bank, which aimed to shake-up customer service on the high street, revealed an accounting error in 2019.

It had mis-reported the value of its commercial loan portfolio, an error that once identified saw the shares crash and led to the later departure of CEO Craig Donaldson after ten years in charge.

Today, the Bank of England slapped Metro with a £5.38 million fine.

Read more.

Wizz Air expands at Gatwick

Wednesday 22 December 2021 08:36 , Graeme Evans

Wizz Air has boosted its presence at Gatwick with plans for another four Airbus A321s at the airport from the spring.

The expansion comes after it acquired 15 daily slot pairs from Norwegian Air Shuttle.

Central and eastern Europe-focused Wizz currently has one aircraft at Gatwick, having opened a base in October 2020 as part of 18 added across its network since the start of the pandemic. Its new Gatwick routes are still to be announced.

Chief executive József Váradi said: “The 2022 season has the potential to be a tremendous opportunity for UK aviation to get back on its feet."

VW loses bid to have Dieselgate lawsuit dismissed

Wednesday 22 December 2021 08:22 , Oscar Williams-Grut

Lawyers were celebrating today after the High Court refused an attempt by Volkswagen to have a class action suit dismissed.

The car giant has been plagued by the “dieselgate” emissions scandal since 2015 when it emerged it had installed devices to rig its pollution emissions data.

Read more here

FTSE 100 winners and losers in 2021

Wednesday 22 December 2021 08:16 , Graeme Evans

The hottest stock in the FTSE 100 index during 2021? Look no further than the unglamorous world of plant and equipment hire.

Investors who backed Sunbelt owner Ashtead have seen an impressive rise of 72% after the company benefited from infrastructure spending and the rebuilding of the US economy.

Other big risers in a list produced today by Hargreaves Lansdown include miner Glencore and Royal Mail after gains of more than 55%.

Many of last year's pandemic winners suffered a hangover this year, with betting firm Flutter Entertaintment the biggest faller overall at 27%. Ocado dropped 26% and London Stock Exchange was off 25% in the wake of its Refinitiv takeover.

Hopes of a travel rebound also evaporated, resulting in another dismal showing for British Airways owner IAG.

“Optimism popped”, GDP growth slows says ONS

Wednesday 22 December 2021 07:38 , Simon English

The UK economy was slowing down well before Omicron emerged, figures out today show, putting the recovery in clear jeopardy.

Figures from the Office for National Statistics (ONS) put GDP growth at 1.1% for the quarter to September, lower than a previous 1.3% estimate.

Read more here

Steady start for FTSE 100

Wednesday 22 December 2021 07:31 , Graeme Evans

European markets are set to consolidate gains after Monday's dip presented a buying opportunity in yesterday's session.

Investors put Covid fears to one side to leave the FTSE 100 index almost 1.4% higher, wiith British Airways owner IAG surging 7% at the top of the risers board.

Wall Street also finished sharply higher on Tuesday after the tech-focused Nasdaq rebounded 2.4% and the S&P 500 saw an improvement of 1.8%.

Buying activity is set to slow today, with a more subdued session for Asian markets pointing to a steady but unspectacular start to trading in London. CMC Markets is predicting that the FTSE 100 index will open seven points higher at 7304.

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