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The London market rallied after two major banks said now was the perfect time to buy British stocks.

The FTSE 100 rebounded 1 per cent, or 74.31 points, to 7371.46 while the FTSE 250 rose 0.9 per cent, or 193.21 points, to 21,645.71 after JP Morgan analysts said London-listed firms looked ‘exceptionally cheap’. 

Meanwhile, Morgan Stanley said there was a ‘compelling case’ for buying stock in FTSE 350 companies, as UK equities were ‘more defensive’ than global peers.

Stocks rally: The FTSE 100 rebounded 1% while the FTSE 250 rose 0.9% after JP Morgan analysts said London-listed firms looked 'exceptionally cheap'

Stocks rally: The FTSE 100 rebounded 1% while the FTSE 250 rose 0.9% after JP Morgan analysts said London-listed firms looked ‘exceptionally cheap’

The assessment from the Wall Street banks was echoed by AJ Bell investment director Russ Mould, who noted that the lack of tech stocks in the FTSE 100 may now be a blessing amid a sell-off.

He said: ‘The FTSE 100 remains an outlier in global markets due to the construction of its index.

‘For years it was criticised for lacking exciting fast-growth tech stocks. That’s now worked to its advantage. Being dominated by the banking, energy and tobacco sectors means the FTSE 100 has been one of the best performing major indices globally this year.’

Stock Watch – Novacyt

Shares in diagnostics firm Novacyt tumbled to their lowest level in nearly two years after predicting a sharp drop in demand for Covid-19 tests.

It expects sales of the tests to fall by 50 per cent this year compared to 2021, although this would be partially offset later in the year by the arrival of new products.

The sales plunge threatens to severely dent Novacyt’s revenues, 86 per cent of which came from Covid-19 products last year. 

The shares slumped 23.1 per cent, or 55.1p, to 183.8p.

 

The gains followed heavy losses on Monday when the FTSE 100 fell 2.6 per cent and the FTSE 250 3.6 per cent. 

On Wall Street the main indices fell deep into the red before staging a huge comeback to close positively. But uncertainty continues to abound amid fears of interest rate rises and the growing tension between Russia and Ukraine.

Banks were among those leading the FTSE 100 higher in yesterday’s session. Standard Chartered jumped 5 per cent, or 24.3p, to 512.2p after analysts at UBS upped their target on the stock to 580p from 530p. 

The investment bank upgraded Natwest to ‘buy’ from ‘neutral’ and hiked its target to 290p from 230p. Natwest climbed 3.4 per cent, or 7.9p, to 273.8p.

Additionally, UBS upped its target for Lloyds to 62p from 60p, sending it up 3.3 per cent, or 1.64p, to 50.91p, and for HSBC to 590p from 500p, helping drive the shares 3.5 per cent, or 17.25p, higher to 509.4p. Barclays also gained 3.3 per cent, or 6.34p, to 196.7p after UBS raised its target to 265p from 250p.

Shell bobbed up 3.7 per cent, or 64.2p, to 1812p following reports it had struck oil off the coast of Namibia. Rival BP was also up 4.3 per cent, or 15.55p, at 379.65p as crude prices inched higher.

Mid-cap investment fund Baillie Gifford US Growth Trust added 3.5 per cent, or 7.5p, to 220.5p as the value of the assets in its portfolio rose 17.2 per cent in the six months to the end of November. 

However, the fund’s shares have lost around 28 per cent of their value this year amid the plunge in US tech stocks.

Asset manager Abrdn bounced 4.5 per cent, or 10.2p, to 239.4p after Credit Suisse rated the stock at ‘outperform’ with a target price of 290p, saying said it had one of the ‘best asset and revenue mixes’ and they were optimistic about its £1.5billion purchase of investment platform Interactive Investor.

Amur Minerals rocketed 68.7 per cent, or 1.43p, to 3.5p, after confirming it was in talks to sell Irosta Trading, which owns a nickel-copper mine in Russia, for up to £100million.

Pipe and drain maker TI Fluid Systems said chairman Manfred Wennemer will retire in May, to be replaced by independent director Tim Cobbold. It predicted a ‘robust’ performance for 2021 despite supply chain disruption and computer chip shortages. The shares fell 0.4 per cent, or 1p, to 240p.

Shares in egg-free cake maker Cake Box jumped 5.5 per cent, or 14p, to 268p after Jaswir Singh, the chief operating officer, bought 20,075 shares for £50,000, after a dip on Monday. 

Meanwhile, pub group Marston’s sales fell 3.9 per cent from pre-pandemic levels in the 16 weeks to January 12 as festive trading was hit by Omicron and Plan B restrictions. The shares were up 1 per cent, or 0.8p, to 78.9p.

Some links in this article may be affiliate links. If you click on them we may earn a small commission. That helps us fund This Is Money, and keep it free to use. We do not write articles to promote products. We do not allow any commercial relationship to affect our editorial independence.

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The FTSE 100 recovered some ground after tumbling yesterday, as escalating tensions over Russia and Ukraine and the prospect of faster US Federal Reserve interest rate hikes spooked investors.

Britain’s blue-chip index added 0.9 per cent by 12.30pm to 7,360.2 points, after taking a pounding on Monday when it fell 2.6 per cent, as major stock markets around the world also slumped.  

Traders buying back into cheaper shares sent the stock market up today, but investors remain on a knife edge with their concerns exacerbated by major falls seen in leading tech growth shares recently.

The US’s technology heavy Nasdaq index has been on a losing streak since November, while the main American indices, the S&P 500 and Dow Jones IA moved into correction territory yesterday – down 10 per cent on recent peaks.

The FTSE 100, London's leading stock market index, regained some ground today after yesterday's sharp 2.6% fall, which itself followed a week-long losing streak

The FTSE 100, London’s leading stock market index, regained some ground today after yesterday’s sharp 2.6% fall, which itself followed a week-long losing streak

Commodity-linked energy stocks were among the FTSE 100 gainers today, including BP and Shell, as fears of a military conflict, coupled with risks in the Middle East, have raised concerns about oil supply availability and pushed crude futures higher.

Banks, including NatWest, Standard Chartered, Lloyds and Barclays, also climbed, with higher interest rates considered to be beneficial to their profits.  

The domestically-focused FTSE 250 rallied 1.5 per cent to 21,776 points, despite growing concerns for the outlook in Eastern Europe. 

The FTSE 100 remains around 2.8 per cent lower than its closing price last week, as Monday’s sell-off pushed the index to a one-month low.

The City was left reeling by Monday's sell-off, as spooked investors ditched shares

The City was left reeling by Monday’s sell-off, as spooked investors ditched shares

Yesterday’s sell-off wiped £68billion off the value of Britain’s 350 leading listed com-panies, while the Dow Jones Industrial Average shed more than 1,000 points in early trading before recovering in New York.

UK stocks were not alone in feeling the brunt of investor skittishness yesterday, as US markets continued their tough start to the year, Chinese shares fell to a 15-month low and the STOXX Europe 600 fell roughly 3.5 per cent.

Senior investment and markets analyst at Hargreaves Lansdown Susannah Streeter described this morning’s recovery in UK stocks as ‘a calm before another potential storm’, with gains driven by ‘bargain hunters’ targeting Monday’s most-sold names.

She added: ‘Investors are still bracing for a fresh bout of volatility this week, following the rollercoaster ride on Wall Street and fresh falls in Asia.

‘A heightened sense of nervousness remains about just how tough the Federal Reserve will talk and act to try and get increasingly troublesome inflation under control.

‘The deteriorating situation in Ukraine with the stand-off continuing as diplomats moves falter, is adding to heightened tensions on the markets, with fears a conflict could unleash a fresh front of chaos, including making the energy crisis facing Europe even worse.’

Movements in so-called ‘safe haven’ assets today illustrate ongoing investor skittishness.

How Monday's sell-off hit Europe's stock markets and bitcoin

How Monday’s sell-off hit Europe’s stock markets and bitcoin

Government bond yields in the euro area broadly steadied on Tuesday, with German 10-year Bunt yields notably edging back into negative territory after rising to above 0 per cent for the first time since 2019 last week.

Safe-haven currencies have generally rallied this morning, with the US dollar trading close to its two-week peak.

Meanwhile, Gold prices are steady as concerns about a faster pace of policy tightening by the Fed balance out safe-haven demand fuelled by escalating tension over Ukraine.

US Economist at PIMCO Tiffany Wilding said that, amid continued inflationary pressure and low unemployment, the asset manager expects the central bank to use its Wednesday meeting to to ‘reiterate recent guidance’ and hold off on an interest hike until March.

She added: ‘Officials now expect a March lift-off, three to four rate hikes this year and an earlier and faster start to quantitative tightening, which we expect to begin in June or September.

‘We think it’s a close call as to whether they announce the end of asset purchases one month earlier (i.e. mid-February) than widely expected (mid-March).

‘In the press conference, Chair [Jerome] Powell could even provide additional details on how officials prefer to shrink the balance sheet.’

While the FTSE has suffered over the past week, it remains substantially up on a year ago

While the FTSE has suffered over the past week, it remains substantially up on a year ago

However, senior vice president of research at Fisher Investments, Aaron Anderson, suggested that the Fed’s next steps will not necessarily be negative for stock markets.

He explained: ‘The Fed may move early this year to get a hike or two in before midterms, but it is not likely to be too active in the midst of a heated election season.

‘Although many continue to worry that the Fed tapering its quantitative easing (QE) program and hiking interest rates will be market headwinds, data shows tapering and initial rate hikes aren’t inherently negative for stocks.

‘We believe QE is widely misunderstood and hasn’t stimulated the economy or fueled inflation as many believe.

‘In our view, strong fundamentals and the anticipation of rebounding economic activity – not monetary policy – have driven stock markets’ rise since March 2020.’

Some links in this article may be affiliate links. If you click on them we may earn a small commission. That helps us fund This Is Money, and keep it free to use. We do not write articles to promote products. We do not allow any commercial relationship to affect our editorial independence.

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Telecoms giant Vodafone hit its highest level in seven months following reports it was considering mergers in the UK and Italy.

The shares jumped 4.5 per cent, or 5.32p, to 122.86p after it emerged the FTSE 100 firm held talks late last year about buying rival UK mobile network Three from Asian conglomerate CK Hutchison.

If a deal goes through Vodafone will add Three’s 9.3m customers to its existing 20m, making it a huge player in the British telecoms space.

Merger rumours: Vodafone shares jumped 4.5% after it emerged the firm held talks late last year about buying rival UK mobile network Three from Asian conglomerate CK Hutchison

Merger rumours: Vodafone shares jumped 4.5% after it emerged the firm held talks late last year about buying rival UK mobile network Three from Asian conglomerate CK Hutchison

However, such a tie-up would draw scrutiny from regulators. Vodafone also entered separate talks to merge its Italian business with that of French rival Iliad in a deal that could create a £5billion telecoms powerhouse in the country.

The talks were first reported by Bloomberg. The discussions came as Vodafone attempts to fend off speculation that it could become a takeover target.

The City is awash with rumours that a US telecoms firm or private equity shark could be eyeing the group following a £9.1billion (€10.8billion) swoop on peer Telecom Italia by New York-based buyout group KKR late last year.

Stock Watch – Cake Box

Egg-free cake maker Cake Box plunged to a ten-month low after a financial blog alleged errors in its accounts.

A blog post last week highlighted what was claimed to be an ‘erroneous’ entry into the firm’s cash flows as well as historic mistakes in stock control. It also noted apparent issues with bookkeeping.

Cake Box acknowledged there had been ‘transcription errors’ in its results but these had no impact on profits.

The shares slumped 17.9 per cent, or 58p, to 267p.  

Meanwhile, it was less good news for major housebuilders, which came under pressure after a bleak assessment of the cladding crisis from analysts at Jefferies.

The broker said share prices in the sector could see ‘significant volatility in the coming months’ as the Government ramped up pressure on builders to foot a multi-billion pound bill to remove unsafe cladding from their properties.

Jefferies also warned that the cost to some companies ‘may have to increase’ and that Housing Secretary Michael Gove ‘will seek to make life as difficult as he can for all involved’. 

Persimmon slumped 6.2 per cent, or 159p, at 2390p while Berkeley fell 6.4 per cent, or 280p, to 4090p, Barratt dropped 8.9 per cent, or 60p, to 614.4p and Taylor Wimpey lost 6.1 per cent, or 9.6p, to 147.05p.

Their FTSE 250 counterparts were also on the slide, with Bellway sinking 6 per cent, or 180p, to 2803p, Redrow falling 5.5 per cent, or 35p, to 602p, Countryside Properties shedding 5.3 per cent, or 16.6p, to 294.6p, Crest Nicholson dropping 5.6 per cent, or 18.4p, to 311.4p and Vistry tumbling 6.9 per cent, or 74p, to 1005p.

The FTSE 100 dropped 2.6 per cent, or 196.98 points, to 7297.15 while the FTSE 250 tumbled 3.6 per cent, or 810.74 points, to 21452.5.

Markets continued to fret about the rising tensions between Ukraine and Russia, which some analysts fear could cause energy prices to spike further, adding to existing inflation concerns.

The prospect of more interest rate hikes when the Federal Reserve meets on Wednesday also unsettled traders. Meanwhile, the ongoing slump in US tech stocks continued to hit investment firms.

Scottish Mortgage Investment Trust, which holds stakes in Tesla and Nvidia, slumped 8.6 per cent, or 95p, to 1014.5p. Baillie Gifford US Growth Trust sank 7.6 per cent, or 17.5p, to 213p. Allianz Technology Trust fell 7.9 per cent, or 22p, to 255p.

The sell-off also spread to London’s tech firms, with payments group Wise tumbling 7.6 per cent, or 49.8p, to 605.2p while food delivery group Deliveroo dropped 4.6 per cent, or 7.5p, to 155p.

However, the shift away from riskier tech stocks was a boon for shares in more defensive firms as investors looked for safer places to park their cash. 

Tobacco giant BAT rose 1.5 per cent, or 46.5p, to 3184.5 while rival Imperial Brands edged up 0.3 per cent, or 5p, to 1736p.

Consumer goods giant Unilever was among the strongest blue-chip risers, gaining 7.3 per cent, or 268.5p, to 3943.5p amid hopes the arrival of activist investor Nelson Peltz could revive the firm’s fortunes after its failed bid to take over Glaxosmithkline’s (down 2 per cent, or 32.6p, to 1614.6p) consumer health business.

Some links in this article may be affiliate links. If you click on them we may earn a small commission. That helps us fund This Is Money, and keep it free to use. We do not write articles to promote products. We do not allow any commercial relationship to affect our editorial independence.

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SINCE YOU ASK: Here we explain baffling stock market terminology and how you might stand to profit – this week it’s Spacs










What does Spac stand for? 

A Spac is a special purpose acquisition vehicle, an ’empty shell’ company floated on a stock exchange. 

The money raised is used to purchase another firm, usually a private one that is not listed. The idea is to bring that business to the stock market faster and less expensively than by taking the normal route.

If an acquisition cannot be found within two years, the cash has to be returned to the original shareholders. That can cause a stampede to find something to buy, whether it is suitable or not. It turned into a Wall Street craze. Such was the popularity of Spacs in 2021 that 334 deals were done with a value of $597billion – 10 per cent of mergers and acquisitions worldwide. 

Change of mood: A Spac is a special purpose acquisition vehicle, an 'empty shell' company floated on a stock exchange

Change of mood: A Spac is a special purpose acquisition vehicle, an ’empty shell’ company floated on a stock exchange

Why the excitement?

At the height of the Wall Street Spac feeding frenzy in late 2020 and early 2021, the profits were often handsome. 

The cult of personality played a role. Sir Richard Branson, Jay-Z and Donald Trump are among the figures associated with Spacs. When Trump announced he was launching a media company to merge with a Spac, Digital World Acquisition, its share price soared. This get-together is yet to happen, however. 

What’s the mood now? 

Excitement has abated as a result of disappointing performance. The price of the De-Spac ETF (exchange traded fund) is down around 41 per cent over the past 12 months. There are anxieties over the quality of some of the companies acquired. 

Usha Rodrigues, a professor of corporate finance at Georgia university, likens some of the mergers to hasty Las Vegas weddings.

Who makes money? 

Hedge fund investors, who may borrow to invest in Spacs before they are listed, will make a killing if there is a price ‘pop’ (a sharp rise) at the start of trading. The banks that advise Spacs can also earn lucrative fees at various stages. 

Private investors, by contrast, are only permitted to buy the shares after they start trading – sometimes at an inflated price. 

But many will still be tempted to take the risk if a celebrity is involved, which is ‘never a good idea’, according to the SEC, the US watchdog. 

Are Spacs coming to the UK? 

Amsterdam has become Europe’s Spac capital, with listings including one sponsored by Bernard Arnault, boss of luxury goods giant LVMh. Branson is expected to list another Spac in Amsterdam this year. 

The UK would like to grab a slice of the action to affirm the City’s status as a financial centre. Rishi Sunak is said to be pro-Spac. Some listing rules have been relaxed, such as those on reverse takeovers (where a smaller company snaps up a larger business). To date, London can boast only one Spac, although more could arrive in spring. 

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Major oil stocks sank as rising tensions between Russia and Ukraine threatened international crude supplies.

Brent crude dropped by over 1.1 per cent to just above $88 a barrel as the ongoing build-up of Russian troops on the Ukrainian border drew condemnation from politicians in both the US and Europe. 

There are worries that a Russian invasion of Ukraine will result in sanctions from the US and other countries in retaliation, which could impact supplies of Russian oil and gas to the wider market. 

Concern: Brent crude dropped by over 1.1 per cent to just above $88 a barrel

Concern: Brent crude dropped by over 1.1 per cent to just above $88 a barrel

Such a move would come at a critical time for global oil supplies, which are currently tight as the economy emerges from the pandemic and fuel demand rises while production remains steady. 

It could also imperil projects run by UK oil majors Shell and BP, both of which have operations in Russia. Shell shares dropped 1.7 per cent, or 30.8p, to 1808.4p as crude prices dipped while BP was down 1.8 per cent, or 6.9p, at 382.25p. 

Neil Wilson, chief market analyst at Markets, noted that a full-scale war between Russia and Ukraine would also cause ‘heavy losses’ for global stock markets. 

The oil stock declines helped push the FTSE 100 into negative territory for 2022 so far, ending the week on a sour note. The blue-chip index closed down 1.2 per cent, or 90.88 points, at 7494.13. 

The FTSE 250 was also on the back foot, tumbling almost 2 per cent, or 451.74 points, to 22263.24. 

Markets in Europe and Asia also saw heavy losses yesterday, with Germany’s Dax dropping 1.9 per cent, while Japan’s Nikkei index slumped 0.9 per cent. 

Market sentiment was weighed down by jitters on Wall Street as a sell-off of tech firms continued. It has been especially punishing for Scottish Mortgage Investment Trust, which counts tech giants such as Tesla and Nvidia among its biggest holdings. Shares in the group were down 3.9 per cent, or 44.5p, to 1109.5p. 

It was followed by other US-focused funds, with Baillie Gifford US Growth Trust sliding 6.7 per cent, or 16.5p, to 230.5p while Allianz Technology Trust, which owns a large stake in Google parent Alphabet, tanked 5.5 per cent, or 16p, to 277p. 

Retailers also fell as sales tumbled by almost 4 per cent in December as Plan B restrictions and Omicron infections slammed the brakes on Christmas spending. 

High street giant Next slumped 1 per cent, or 72p, to 7486p while Dunelm dropped 2.9 per cent, or 39p, to 1292p, B&M fell 2 per cent, or 10.8p, to 543p and JD Sports slipped 1 per cent, or 1.95p, to 192.7p. 

The cautious market mood helped push up prices of some ‘defensive’ stocks, ones with slower share price growth but more reliable dividend payments. 

Lucky Strike cigarette maker BAT climbed 0.8 per cent, or 24.5p, to 3138p and rival Imperial Brands rose 0.4 per cent, or 6.5p, to 1731p. 

Promotional merchandise maker 4imprint edged up 1.7 per cent, or 45p, to 2675p after upping its profit forecasts. The FTSE 250 firm expects profits for 2021 to be ‘towards the upper end’ of expectations, while revenues for the period are due to rise 41 per cent year-on-year to £580m.

Mid-cap merchant bank Close Brothers flagged an expected 2.9 per cent rise in its loan book to £8.7billion for the six months to the end of January, boosted by new business in its asset and motor finance divisions. Assets under management also grew to £16.6billion from £15.6billion at the end of July last year. Shares sank 6.1 per cent, or 82p, to 1266p. 

Ladbrokes-owner Entain dropped 5.2 per cent, or 89p, to 1635p after receiving a mixed reception from two investment banks. 

Analysts at Morgan Stanley upped their target price on the stock to 2530p from 2430p previously, while Deutsche Bank cut theirs to 2354p from 2400p.

Some links in this article may be affiliate links. If you click on them we may earn a small commission. That helps us fund This Is Money, and keep it free to use. We do not write articles to promote products. We do not allow any commercial relationship to affect our editorial independence.

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Deliveroo saw orders bounce to the top of its forecasts as it received a demand boost from the UK’s Plan B lockdown restrictions.

The food delivery firm’s shares rose 1.4 per cent, or 2.4p, to 172p after it flagged a 42 per cent rise in orders to 80.8m in the fourth quarter of 2021. The value of the transactions also jumped 36 per cent year-on-year to £1.7billion.

For the year as a whole, orders surged 73 per cent to 300.6m, while their value climbed 70 per cent to £6.6billion.

Deliveroo's shares rose 1.4%, or 2.4p, to 172p after it flagged a 42% rise in orders to 80.8m in the fourth quarter of 2021

Deliveroo’s shares rose 1.4%, or 2.4p, to 172p after it flagged a 42% rise in orders to 80.8m in the fourth quarter of 2021

Demand for food delivery boomed during the pandemic as the closure of pubs and restaurants left customers relying on takeaways.

Deliveroo also managed to grow its UK market share in the fourth quarter as it battled against rivals Uber Eats and Just Eat (up 3.4 per cent, or 132.5p, at 4052p).

But the average value of each order fell 5 per cent to £21.40 in the final three months of the year, marking a return to pre-pandemic levels. 

As a result of the order surge, Deliveroo hit the very top of its guidance for 2021, which had predicted an increase in transaction values of between 60 per cent and 70 per cent.

Stock Watch – Emis

Emis, a provider of computer software for hospitals and GP surgeries, climbed as its performance for 2021 came in slightly ahead of expectations.

The group is also supporting the NHS Covid-19 vaccine programme through its Pinnacle software, which helps doctors monitor patient data and referrals.

As a result, the firm’s results are expected to be higher than the £164.8million in revenues and £41.1million profit predicted by analysts. EMIS shares rose 5.23 per cent, or 66p, to 1330p.

The firm also noted growth in its newer on-demand grocery arm, which allows customers to order supermarket items for delivery through its mobile phone app.

Grocery orders made up 8 per cent of the firm’s total transactions in the second half of 2021, up from 6 per cent in the same period a year ago.

Despite the solid numbers, IG Group’s chief market analyst Chris Beauchamp noted that many in the market would worry whether the pace of growth would continue following the end of pandemic restrictions.

He added that the ‘growing squeeze’ on the cost of living in the UK may mean consumers ‘aren’t quite so keen on making too many orders through the app’.

The FTSE 100 inched down 0.06 per cent, or 4.65 points, to 7585.01 while the FTSE 250 went the other way, up 0.3 per cent, or 59.96 points, to 22714.98. Traders in London were unnerved by the steep losses suffered on Wall Street on Wednesday, which saw the Nasdaq index slip into correction territory after slumping 1.15 per cent.

The phase-out of the UK’s Plan B lockdown restrictions helped lift the mid-cap index, which is dominated by domestically-focused British firms.

Companies with heavy exposure to China got a boost after the country’s central bank cut mortgage rates in a bid to shore up its struggling property sector.

The loosening of monetary policy helped shares in miner BHP gain 1.2 per cent, or 29p, to 2502.5p while luxury goods firm Burberry, which relies heavily on Chinese shoppers for revenues, rose 2.4 per cent, or 44p, to 1910.5p.

It also lifted Asia-focused insurer Prudential, which was up 2.6 per cent, or 33.5p, at 1320p. 

Oil stocks weighed on the blue-chip index as crude prices slipped from seven-year highs reached earlier this week. Shell was down 1.7 per cent, or 32.2p, to 1839.2p while BP dropped 1.3 per cent, or 4.95p, to 389.5p.

Telecoms giant BT was also on the slide, dipping 0.2 per cent, or 0.4p to 189.5p after unveiling plans to hike prices by 9.3 per cent from the end of March as inflation pushes up costs. 

On average, it means the firm’s BT, EE and Plusnet customers will see their bills rise by £42 per year or £3.50 per month.

Yesterday Nick Lane, BT’s managing director for consumer customer services, blogged: ‘Price rises are never popular, but are sometimes a necessary part of business, if we’re to keep up with the rising costs we face.’

Customers’ data usage had ‘increased dramatically’ with a 90pc increase on broadband usage since 2018, and a 79 per cent increase on mobile phones since 2019. 

Working from home, online education and streaming has led to more demands on BT’s network, he added.

Some links in this article may be affiliate links. If you click on them we may earn a small commission. That helps us fund This Is Money, and keep it free to use. We do not write articles to promote products. We do not allow any commercial relationship to affect our editorial independence.

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MARKET REPORT: Top marks for Pearson as education publisher’s drive towards digital learning looks set to pay off










Investors cheered as an overhaul by the education publisher Pearson appeared to be bearing fruit.

The FTSE 100 company brought in former Disney honcho Andy Bird in 2020 to spearhead a shake-up that puts digital learning at the heart of the business.

The City has been wary of this strategy so far but shares shot higher after it said sales rose by 8 per cent in 2021 and profits would smash estimates, with a rise of 33 per cent to £385million.

Overhaul: Pearson brought in former Disney honcho Andy Bird in 2020 to spearhead a shake-up that puts digital learning at the heart of the business

Overhaul: Pearson brought in former Disney honcho Andy Bird in 2020 to spearhead a shake-up that puts digital learning at the heart of the business

Pearson struggled when the pandemic struck and most schooling and university studying switched online

This hit its textbook and testing income, though it said its testing services are rebounding. There is also no sign that US university students are not buying textbooks to save money.

Bird’s digital plan includes an online subscription model – it is often likened to Netflix, called Pearson+, for around £11 a month.

Stock Watch – Omega Diagnostics

Omega Diagnostics slid after boss Colin King left.

He had led it since late 2017 and through the Covid crisis, when Omega became a ‘pandemic winner’ – its share price rocketed because of its work in coronavirus testing.

No reason was given for King’s abrupt exit, though it follows speculation Omega may need to raise more money, which it denies. 

Jag Grewal, managing director of the health and nutrition arm, has replaced King. Shares fell 10.4 per cent, or 1.61p, to 13.88p.

This gives users instant access to its textbooks online and gives it direct access to customers. But Bird also said that learning and offering continued education was becoming a critical way for employers to retain staff.

He said employers need to try to set themselves apart from competitors with incentives other than higher pay if they want to hire more people to counter the ‘Great Resignation’. 

Pearson finished 4.4 per cent higher, up 27.6p, to 660p, making it one of the biggest risers on the blue-chip index.

The Footsie as a whole climbed 0.4 per cent, or 26.11 points, to 7589.66, while the FTSE 250 rose 0.01 per cent, or 2.31 points, to 22,655.02.

Elsewhere, the stock market was awash with trading updates ahead of the next annual results season. Mining behemoths Rio Tinto (up 3.9 per cent, or 211p, to 5654p) and Antofagasta, (up 3 per cent, or 43.5p, to 1482.5p) both advanced despite posting disappointing fourth-quarter production reports.

They were boosted by rising metal prices. BHP rose 2.3 per cent, or 58.5p, to 2473.5p after iron ore and nickel production was up – though traders’ attention was likely on Bloomberg reports that BHP might look to buy rival Glencore – up 1.3 per cent, or 5.3p, to 419.1p.

Money transfer group Wise gained 2.6 per cent, or 17.2p, to 689.6p, after the amount of cash sent on its platforms jumped 38 per cent to almost £21billion in the third quarter. 

Revenues surged 34 per cent to £150million on the increase, and the overseas payment group’s annual sales are expected to rise by 30 per cent.

Crest Nicholson climbed 2.4 per cent, or 8p, to 347.6p as it moved back into the black in the last financial year despite raising its provision to tackle historic cladding replacements to £43million. 

The housebuilder said a turnaround plan was complete after a torrid few years, posting profits of £87million, compared to a £13.5million loss the previous year.

But fellow construction group Galliford Try lost ground, falling 1.2 per cent, or 2.1p, to 176.7p, despite saying it was performing well.

Beyond the maze of financial updates, medical devices maker Smith and Nephew rose 1.7 per cent, or 21p, to 1263p after it snapped up knee implant specialist Engage Surgical in a deal worth up to £99million. Engage makes the only cementless knee implants available in the US market.

Smith & Nephew added that the purchase will boost its surgical robots business.

M&C Saatchi backers shrugged off an announcement that finance boss Mickey Kalifa is stepping down for personal reasons.

He will stay on until a replacement is found though his departure comes at a tricky time for the company after it fended off a bid from tech queen Vin Murria and is bracing for a potential higher offer. Shares in the advertising group fell 2 per cent, or 3.5p, to 175.5p.

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Oil majors Shell and BP hit fresh post-pandemic records as crude prices reached their highest levels in just over seven years.

Shell was up 1.5 per cent, or 28.4p, at 1873.8p while BP rose 0.5 per cent, or 2p, to 395.75p – their highest levels since February 2020. 

The gains came as prices of Brent Crude passed $88 a barrel, for the first time since October 2014.

Price boost: Shell was up 1.5 per cent, or 28.4p, at 1873.8p while BP rose 0.5 per cent, or 2p, to 395.75p – their highest levels since February 2020.

Price boost: Shell was up 1.5 per cent, or 28.4p, at 1873.8p while BP rose 0.5 per cent, or 2p, to 395.75p – their highest levels since February 2020.

Another oil benchmark, West Texas Intermediate, was also trading at around a seven-year high close to $86 a barrel.

The latest surge followed an attack by rebels in Yemen against the United Arab Emirates, which raised fears of supply disruption.

Tensions were increased further when neighbouring Saudi Arabia launched air raids in Yemen in retaliation.

Stock Watch – Sanderson Design

Interior design group Sanderson surged to a three-month high as demand for its UK-made fabrics and wallpaper rose following Brexit and disruption to supply chains.

It expects profits for the year to the end of January to be at least £12m, ‘significantly ahead’ of expectations and up from £7.1m last year.

The group also highlighted foreign success, with sales in North America up 40pc year-on-year, where it is enjoying ‘very strong’ orders. Shares rose 21.9pc, or 33.5p, to 187p.

 

Brent’s rally means it has risen around 60 per cent in the last 12 months and over 350 per cent since April 2020, when its value plunged to just under $20 a barrel.

Some analysts, including Goldman Sachs, have predicted that the prices of oil could climb back to $100 a barrel this year as the perceived threat of Omicron diminishes, allowing the global economy to reopen and kick-start demand for fuel.

The world’s oil market is also facing a supply squeeze unless the OPEC+ group of oil-producing countries, such as Russia and Saudi Arabia, decide to open the taps to meet demand at the risk of prices falling back again.

Political instability is adding upward pressure to oil prices, with the Yemen conflict and rising tensions between Russia and Ukraine worrying energy markets.

The FTSE 100 dropped 0.6 per cent, or 47.68 points, to 7563.55 while the FTSE 250 fell 1 per cent, or 218.93 points, to 22,652.71. 

Markets in London were under pressure after rising to a two-year high on Monday, with some traders looking to take profits following the rally.

Miners also weighed on the index amid weaker commodity prices, with Russian group Evraz, which is part-owned by Chelsea owner Roman Abramovich, dropping 2.8 per cent, or 15.8p, to 557.2p while precious metals group Polymetal fell 1.9 per cent, or 21.5p, to 1132.5p.

GlaxoSmithKline shares fell 0.4 per cent, or 6.6p, to 1701.2p, as it emerged that it is in talks with the sovereign wealth funds of Qatar and Singapore to fend off Unilever’s takeover efforts.

Cybersecurity group Darktrace inked a multi-million dollar deal to provide its artificial intelligence technology to one of the world’s largest airlines.

The airline, which operates around a thousand flights each day to over 100 destinations, will use Darktrace tech to protect the business from ‘sophisticated’ threats. Darktrace rose 5 per cent, or 20.6p, to 433.8p.

Mid-cap oil and gas firm Energean jumped by 3.7 per cent, or 33.5p, to 949.5p after a record performance in 2021

The firm noted that record gas prices in Italy, one of its key markets, and better than expected production helped lift its revenues to £364million, up from £247million in 2020.

Telecoms giant BT was up 3.1 per cent, or 5.55p, to 186.6p after analysts at Goldman Sachs added it to their ‘conviction buy’ list and raised their target price on the stock to 270p from 180p.

Stock trading platform Plus 500 bounced up 2.3 per cent, or 32.5p, to 1470p after it was granted a tax cut by the Israeli government.

Its status as a ‘preferred technological enterprise’ has been extended and as a result, its annual corporation tax rate will be lowered to 12 per cent from 23 per cent.

Retirement income and pension specialist Just Group surged 8.2 per cent, or 7.1p, to 93.3p after its sales jumped 25 per cent to £2.7billion during 2021.

Some links in this article may be affiliate links. If you click on them we may earn a small commission. That helps us fund This Is Money, and keep it free to use. We do not write articles to promote products. We do not allow any commercial relationship to affect our editorial independence.

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The FTSE 100 climbed to a two-year high and a fresh post-pandemic record as takeover talk gripped the City.

The blue-chip index rose 0.9 per cent, or 68.28 points, to 7611.23, the first time it has topped 7600 since January 2020, a month before the onset of Covid-19 sent global stock markets into meltdown.

GlaxoSmithKline helped lead the FTSE 100’s ascent, gaining 4.1 per cent, or 66.8p, to 1707.8p, following news of Unilever’s attempted swoop on the pharma giant’s consumer healthcare business.

New high: The blue-chip index rose 0.9%, to 7611.23, the first time it has topped 7600 since January 2020, a month before Covid sent markets into meltdown

New high: The blue-chip index rose 0.9%, to 7611.23, the first time it has topped 7600 since January 2020, a month before Covid sent markets into meltdown

Unilever shares, however, were down 7 per cent, or 274.5p, at 3662p as traders surmised that such a takeover could be a step too far for the consumer goods group.

But arch rival Reckitt Benckiser – which makes Dettol and Air Wick – gained 3.3 per cent, or 202p, to 6397p. Reckitt also appointed a City heavyweight to its board.

Alan Stewart, the former chief financial officer of Tesco (up 1.6 per cent, or 4.45p, to 289.45p), Marks & Spencer (up 0.1 per cent, or 0.2p, to 223.5p) and ex-finance director at WH Smith (up 1.2 per cent, or 18p, at 1582.5p), will join the firm as a non-executive director at the start of next month.

Stock Watch – Access Intelligence

Access Intelligence, a public relations and communication software group, plunged to a ten-month low after warning of the ‘severe’ impact of Covid-19 on its South-East Asian markets.

The hit in the region lasted longer than expected, particularly in its key markets of Singapore, Malaysia and Indonesia, with the situation exacerbated by the emergence of Omicron.

Its performance will be hit in both 2022 and 2023. Shares fell 23.6 per cent, or 36p, to 116.5p.  

The buzz around takeovers looks set to continue across 2022, with analysts at Peel Hunt predicting merger and acquisition activity among UK companies was ‘likely to increase’ as factors such as uncertainty, shareholder activism and inflation created buying opportunities. Positive broker assessments were also helping push the FTSE 100 higher.

Insurer Admiral Group added 4.2 per cent, or 130p, to 3241p after it received an upgrade to ‘hold’ from ‘reduce by analysts at HSBC, who also raised their target price on the stock to 3150p from 3050p. 

Chilean copper miner Antofagasta was also on the up, climbing 4.2 per cent, or 57.5p, to 1436.5p as UBS upgraded the stock to ‘neutral’ from ‘sell’ and hiked their target to 1400p from 1300p. 

Housebuilder Taylor Wimpey also jumped 4.2 per cent, or 6.45p, to 160.4p following a positive trading update.

Shell and BP bobbed higher after they were selected to build new windfarms off the coast of Scotland. 

Shell shares were up 1.3 per cent, or 22.8p, at 1845.4p while BP rose 1.3 per cent, or 5.05p, to 393.75p. Another winner, energy firm SSE, added 0.4 per cent, or 6.5p, to 1583p.

Oil firms got a lift after analysts at SEB Research predicted crude prices could hit $100 a barrel as demand recovered from the emergence of the Omicron variant and supply remained tight. Crude stands at around $86. 

An unexpected cut to interest rates by the Chinese central bank also helped to boost the market’s mood.

Elsewhere, cybersecurity group and stock market darling Darktrace tumbled 7.1 per cent, or 31.4p, to 413.2pp following a broadside from short-seller Shadowfall.

The fund, nicknamed the ‘dark destroyer’ in the City, criticised the FTSE 250 firm’s business as being ‘watery thin’ having revealed a bet against the company back in October.

Investment manager Ashmore dropped 1.1 per cent, or 3.2p, to 286.2p after it flagged ‘challenging market conditions’ as inflation, Covid-19 variants and weaker growth in China weighed on its portfolio.

The value of its assets under management stood at £64billion at the end of December, down from £67billion at the end of September.

Blue-chip pharma firm Hikma climbed 0.6 per cent, or 13p, to 2069p after it snapped up the Canadian business of bankrupt US firm Teligent for £33.5million.

The purchase, which is expected to complete in the first quarter of 2022, marks an expansion of Hikma’s business into Canada and includes a portfolio of 25 injectable medicines.

The FTSE 250, meanwhile, rose 0.6 per cent, or 128.29 points, to 22,871.64.

Some links in this article may be affiliate links. If you click on them we may earn a small commission. That helps us fund This Is Money, and keep it free to use. We do not write articles to promote products. We do not allow any commercial relationship to affect our editorial independence.

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Property market gets off to record start for 2022 as estate agents report potential sellers are asking for 44% more valuations than last year

  • Valuation requests up 44 per cent in January compared to same time last year
  • The number of buyers inquiring about properties was also up 15 per cent
  • Prices soared through pandemic and shortage of homes is pushing prices higher
  • Estate agents on average have only 12 homes to sell, according to Rightmove










The housing market recorded its busiest-ever first week of the year while average asking prices underwent their fastest growth since May 2016, figures show.

Data from property website Rightmove showed January kicked off with a 44 per cent jump in valuation requests from the same time last year.

It also showed a 15 per cent increase from last year in the number of buyers inquiring about homes.

Prices have soared throughout the pandemic and the continuing shortage of available properties has pushed prices even higher. 

Estate agents on average have only 12 homes to sell, a record low, according to Rightmove.

Meanwhile, cheap mortgages and savings built up in lockdown have added to demand.

Estate agents currently have only 12 homes to sell on average, according to data from property website RightMove

Estate agents currently have only 12 homes to sell on average, according to data from property website RightMove

According to last year’s Budget forecasts, the house price rally will last five more years, with average prices rising 13 per cent by 2026.

Prices for homes in the ‘first-time-buyer’ bracket hit a record level with an average of £214,176 needed to get on the property ladder.

Rightmove property data director Tim Bannister said: ‘All of the signs suggest that prices are likely to continue to rise until more choice is available.’

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