The FTSE 100 is up 0.4 per cent in early trading. Among the companies with reports and trading updates today are S4 Capital, Sainsbury’s and John Lewis. Read the Monday 22 January Business Live blog below.
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Market open: FTSE 100 up 0.5%; FTSE 250 adds 0.8%
London-listed stocks are on the rise this mornign after a record-setting rally on Wall Street in the previous session, which helped outweigh concerns about a slowing British economy and sticky inflation.
Wall Street’s benchmark S&P 500 hit an all-time high on Friday, fuelled by optimism around artificial intelligence (AI), driving technology stocks higher across the globe.
Both the UK indexes marked their third consecutive weekly decline on Friday, after a stronger-than-expected inflation reading and slump in December retail sales raised recession concerns.
Compass Group has edged down after the catering firm said it had agreed to buy rival CH&CO for an initial enterprise value of £475million.
Martin Sorrell’s digital advertising group S4 Capital is up 8.3 per cent, after the company issued fourth-quarter trading update that was in-line with the its previous forecast.
Economy expected to grow by 0.9% in 2024 in boost to Rishi Sunak
The economy will pick up this year in a major boost for Rishi Sunak ahead of the general election, a report suggests.
The EY Item Club said it now expects output to rise by 0.9 per cent in 2024, having previously pencilled in growth of 0.7 per cent.
Bullish start to the week led by tech stocks
Richard Hunter, Head of Markets at interactive investor:
‘UK markets also joined the bullish turnaround, albeit at a more measured pace. The FTSE100 was buoyed by a broad mark-up which included a broker upgrade for Segro. In addition, retailers recovered some poise with gains for the likes of Ocado, JD Sports and Kingfisher ahead of a week which will see an update from Primark owner Associated British Foods.
‘A broker downgrade to Sage scuppered what little hopes there may have been for strength in UK tech stocks, such as they are.
‘Banks also saw some support ahead of annual updates towards the end of next month, with recent economic data suggesting that the robust capital reserves which the banks have built should be enough for them to withstand any further bumps in the road.
‘Despite today’s bounce, the FTSE100 is already underperforming on the global stage having dropped 3.1% in the year to date, while the FTSE250 is down by 3.6%.’
Sainsbury’s boss speaks out on epidemic of retail crime
The boss of Sainsbury’s has spoken out for the first time about the epidemic of retail crime sweeping Britain.
Simon Roberts, 51, chief executive of the UK’s second-biggest supermarket chain, has backed The Mail on Sunday’s campaign for the police to get tough with shoplifters.
Around £43bn wiped off value of Europe’s biggest luxury fashion houses this year so far
Around £43billion has been wiped off the value of Europe’s biggest luxury houses this year so far.
The sector is grappling with a slowdown in demand from wealthy US and Chinese shoppers.
Of the five top luxury giants, including LVMH, Hermes, Kering, Moncler and Richemont, only the latter has not lost ground since the end of 2023.
Levels of financial distress soar
The number of British companies in ‘critical financial distress’ skyrocketed in the fourth quarter of 2023, with every sector of the economy affected, as firms struggle under mounting debt costs and lacklustre growth, new figures suggest.
Begbies Traynor’s Red Flag Alert report shows the second consecutive quarter of around 25 per cent growth in the number of firms in critical financial distress to 47,477.
Historically, a significant percentage of the businesses identified by Red Flag Alert as being in critical financial distress will enter insolvency over the course of the next year, the group said.
Julie Palmer, partner at Begbies Traynor, added:
‘After a difficult year for British businesses that was characterised by high interest rates, rampant inflation, weak consumer confidence and rising and unpredictable input costs, we are now seeing this perfect storm impacting every corner of the economy.
‘Now that the era of cheap money is firmly a thing of the past, hundreds of thousands of businesses in the UK, who loaded up on affordable debt during those halcyon days, are now coming to terms with the added burden this will have on their finances.
‘For some, a better-than-expected Christmas may kick these concerns down the road for a little longer, but the rapid growth in the levels of critical financial distress point to an economy that is waking up to the danger of debt ladened businesses in a higher rates environment.’