Business leaders meet in Davos, S&P 500 near bear market territory
About 2,500 business leaders, politicians and experts are today gathered in Davos, Switzerland for the start of the World Economic Forum annual meeting.
The event, which is being held in person for the first time since January 2020, takes place against the backdrop of the pandemic, war in Ukraine and economic challenges.
On Friday, Wall Street reflected the uncertain global outlook when the S&P 500 briefly touched bear market territory following a seventh weekly decline in a row.
FTSE 100 Live Monday
Grosvenor confident it can withstand a downturn as it marks a return to profitability
12:12 , Simon Hunt
The boss of property group Grosvenor said the company would withstand a looming economic downturn as the firm marked a return to profitability.
The company, which owns over 300 acres of land in central London, posted pre-tax profits of £438 million, following a loss in 2020 of £323 million.
Mark Preston, Chief Executive of Grosvenor, told the Standard: “The characteristics of property should help us through much of what is to come.”
“We’re in retail locations that are not the average retail locations with high footfall…we expect our vacancy rate to remain lower than average.”
The company announced further diversifying of its investment portfolio with a £80 million investment in food and agtech businesses.
FTSE 100 higher as Kainos surges 19%
10:26 , Graeme Evans
Bear market talk in the Swiss resort of Davos quietened a little today as European traders delivered a positive session in the wake of last week’s Wall Street volatility.
War, pandemic and the recession fears driving markets lower mean this year’s World Economic Forum annual meeting will be very different to the last one in January 2020.
About 2,500 business leaders, politicians and experts are in Switzerland, with the annual gathering one of several significant events taking place this week.
As far as stock market sentiment is concerned, tomorrow’s preliminary data releases from global purchasing managers will be front and centre for investors given the economic growth concerns that have sparked heavy selling.
Central banks will also remain in focus as the latest Federal Reserve minutes will show how close policymakers came to hiking interest rates by 0.75% earlier this month.
Fears of sharper-than-expected hikes in US interest rates have pushed the S&P 500 to the brink of bear market territory after falling for seven consecutive weeks during the benchmark’s worst run since 2001.
In the wake of last week’s poor figures from retailers Target and Walmart, the S&P 500 spent some of Friday’s session over the 20% bear market threshold before staging a late recovery.
Wall Street’s resilient finish meant European markets got off to a stronger start, with a stronger session for the Nikkei in Japan also helping.
The FTSE 100 index improved by a bigger-than-expected 0.7% or 50.59 points to 7440.57, led by rallies for betting companies Entain and Flutter Entertainment.
There were also gains of 2% for commodities-focused BP, Anglo American and Rio Tinto, while Royal Mail improved 2% or 7.7p to 323.1p.
The FTSE 250 jumped 1% or 212.30 points to 20,048.25, with IT services group Kainos up 19% after reporting its 12th year in a row of growth with adjusted profits 3% higher at £58.8 million. Shares have slumped from above 2000p in November but jumped 194p to 1226p after today’s results.
Analysts at Investec Securities have a price target of 1650p, calling Kainos a “stand-out growth name”.
Meanwhile, shares in Amigo Holdings were suspended at 6.29p as court hearings take place this week on the schemes of arrangement that will be key to the future of the guarantor loan provider.
FTSE 100 rallies, Moonpig up 12%
08:52 , Graeme Evans
London shares have started the week in positive fashion as the FTSE 100 index is up by a bigger-than-expected 61.08 points to 7451.06, led by rallies of 3% for betting companies Entain and Flutter Entertainment.
There were also gains of 2% for commodities-focused BP, Anglo American and Rio Tinto, while Royal Mail improved 2% or 7.7p to 323.1p.
In the FTSE 250, IT services group Kainos jumped 12% after reporting its 12th consecutive year of growth with adjusted profits 3% higher at £58.8 million. Shares are down from above 2000p since November but rose 154p to 1186p after today’s results.
Greetings card firm Moonpig was another big riser as it announced plans for the £124 million acquisition of gift experiences business Buyagift, sending shares up 12% or 26p to 261p. The wider FTSE 250 index rose by 1% or 217.03 points to 20,052.98.
Kingfisher reports “good momentum”, unveils £300m buyback
08:14 , Graeme Evans
Shares in B&Q and Screwfix owner Kingfisher are 2% higher on relief that the European retailer has stuck by forecasts for the year despite a drop in first quarter sales.
Kingfisher also announced a further £300 million share buyback programme, which it said reflected strong cash generation and confidence in its outlook.
Like-for-like sales were 5.4% lower against strong comparatives in the three months to April 30, but 16.2% stronger against the equivalent pre-pandemic period.
It reported “good momentum” going into the second quarter after the decline in like-for-like sales narrowed to 2.5% for the two weeks to May 14.
The company, which also trades as Castorama and Brico Dépôt in France, said it continued to manage inflation pressures effectively while it has seen product availability approach pre-pandemic levels.
FTSE 100 set for positive start, US futures higher
07:43 , Graeme Evans
Asia markets got the new week off to a mixed start today as China’s worries over rising Covid case numbers in Beijing were offset by a stronger session for the Nikkei in Japan.
In Europe, sentiment looks to be moderately positive as CMC Markets is calling the FTSE 100 index to open 40 points higher at 7430.
US futures are also pointing to modest gains after Friday’s session saw the S&P 500 register its seventh consecutive week of declines for an 18 month low. The benchmark was in bear market territory on Friday until a rally towards the end of the session.
The tech-focused Nasdaq, meanwhile, is also on its longest losing streak since 2001. Last week’s latest poor performance came as retailers Target and Walmart revealed weaker than expected trading, adding to Wall Street’s growth fears at a time of rising interest rates.
CMC’s senior markets analyst Michael Hewson said: “While the weakness in tech stocks has led to this current weakness there is increasing evidence that a combination of rising inflation, interest rates, and concerns over a weakening US economy could see a recession by year end.
“Consequently, the sell-off that started in tech is now starting to bleed into the wider market.”