block-time published-time 8.54am GMT
The FTSE 100 is flirting with is now sporting a triple-digit point loss.
The blue-chip index is down 110 points right now at 5849, a loss of almost 1.9%.
It’s a broad-based selloff, only defied by retailers such as Tesco who posted surprisingly good results this morning.
block-time updated-timeUpdated at 9.11am GMT
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The turbulent market conditions don’t appear to be going anywhere fast, warns analyst Tony Cross of Trustnet.
Yesterday’s modest gains on the FTSE-100 have already been eclipsed as investors become increasingly nervous over the outlook for crude oil.
Wall Street sold off heavily into the close last night and this is very much setting the pace, leaving the vast majority of London’s blue chip equities trading squarely in the red.
block-time published-time 8.37am GMT
Europe’s markets are bathed in electronic red ink this morning, with major indices all losing at least 1%.
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retailers are defying the selloff.
Tesco jumped almost 7% to the top of the FTSE 100 leaderboard after surprising the City with a jump in Christmas sales.
Burberry are close behind, up 3%, after announcing sales growth in
And among smaller companies, JD Sports are up 5.3% after it said profits would beat expectations this year.
Even Home Retail are up, gaining 3.6% despite warning that Argos sales were weak. Traders may be betting there’s more chance that the company will succumb to a new takeover offer from Sainsbury.....
enltrArgos sales threaten Home Retail profits – not a great bid defence? shares up over 6% at one stage https://t.co/4Xt2G7mEK0
— Julia Kollewe
(@JuliaKollewe) January 14, 2016
block-time published-time 8.16am GMT
enltrUK FTSE 100 starts the day below 5900 as the effect of last night's equity reversal in
the United States
impacts....— Shaun Richards
(@notayesmansecon) January 14, 2016
block-time published-time 8.14am GMT
100 falls 1.2% in early trading
And we’re off! European market are falling sharply at the start of trading.
, the FTSE
100 has slid by 73 points, or 1.2%, to 5887, following the losses in
earlier today and on Wall Street last night.
Other European indices are down around 1.3%, hit by worries over the global economy and China’s slowdown.
The FTSE 100 has now lost 5.5% of its value this month - a rough start to the year.
Joe Brent of City firm Liberum explains why:
indices have suffered their worst start since 2008.
There is plenty to worry about globally;
, emerging markets, commodity prices, monetary tightening, negative earnings momentum, high valuations and a tired looking bull market.
block-time published-time 8.04am GMT
No change expected from the Bank of
Over in the City, the Bank of England’s policymakers are gathering to set monetary policy.
But there’s no chance of a rate rise, given the recent market turbulence and weaker economic data that has sent the pound to its lowest level against the US dollar since 2010.
FXTM r esearch analyst Lukman Otunuga says:
Investor sentiment towards the Sterling continues to weaken ahead of the anticipated Bank of
(BoE) rate decision today, in which markets broadly expect rates to be left unchanged at the record 0.5% low.
Since the MPC’s December meeting, the overall outlook for the
economy has dimmed considerably with a downwards revision of Q3 GDP and a decline in industrial productions renewing concerns around the potential slowdown in economic momentum in the
enltrBOE 'change rates' button ready for yet another exciting day. pic.twitter.com/1hveDGCbP9
— Katie Martin
(@katie_martin_fx) January 14, 2016
block-time published-time 7.55am GMT
There’s mixed news from fashion chain Burberry this morning.
On the upside, its sales in mainland
are growing again after a worrying slide last year. That helped send retail revenue up 1% in the last three months on 2015.
On the downside, turnover in
took a hit in the last quarter.
enltrBurberry comparable sales unchanged year-on-year, an improvement from 4% fall in Q2 as
returns to growth— Julia Kollewe
(@JuliaKollewe) January 14, 2016
CEO Chris Bailey says it was tougher than expected, as market upheaval hits demand for expensive coats and handbags.
While Burberry was impacted by the ongoing challenges facing the luxury sector, headwinds in
masked an otherwise stronger performance in many markets.
block-time updated-timeUpdated at 7.56am GMT
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Home Retail has warned that poor sales at its Argos chain would hit group profits.
That’s significant, as the company only recently rebuffed a takeover bid from Sainsbury’s.
My colleague Julia Kollewe has the details:
Argos posted a 2.2% fall in like-for-like sales in the 18 weeks to 2 January, worse than analysts had expected. Walk-in sales slumped 13% in December, with shopping centre and high street stores badly hit, which was only partly offset by 10% growth in digital sales.
Home Retail’s other chain Homebase enjoyed 5% growth, boosted by kitchen and bathroom products. The company confirmed that is in advanced discussions to sell the DIY chain to Australia’s Wesfarmers for £340m.
block-time published-time 7.40am GMT
Tesco: What the analysts say
City analysts are impressed with Tesco’s Christmas performance:
like-for-like sales up 1.3% in six weeks ending January 9. Group like-for-likes up 2.1%.Beats consensus from City analysts.— Luke Tugby
(@LukeTugby) January 14, 2016
enltrImpressive that Tesco even managed positive like for like growth over Xmas in Extra stores.
— Rob Gregory
(@RobGregOnRetail) January 14, 2016
enltrComing off coupons impacted the quarter -1.5%. But Christmas was positive. Well deserved tesco. They had a wonderfully cohesive store plan.
— Steve Dresser
(@dresserman) January 14, 2016
LFL Xmas +1.3% much much better than expected. Together with SBRY & Morrison's suggests Britins spent more at Xmas— Louise Cooper
(@Louiseaileen70) January 14, 2016
block-time updated-timeUpdated at 7.42am GMT
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Tesco cheers City with sales boost
On a busy morning for retail news, Tesco is grabbing the headlines.
Britain’s largest supermarket has defied its critics by reporting a 1.3% rise in sales over the Christmas period. It suggests CEO Dave Lewis is making good progress in his labours to turn the company around.
My colleague Fiona Walsh explains:
Tesco cheered the City with news of a much stronger than expected performance over Christmas, pushing sales in its core
supermarkets business up by 1.3%. Most analysts had been expecting sales to fall.
Chief executive Dave Lewis said the group, Britain’s biggest retailer, had benefitted from lower prices on what he called “an outstanding range of products.”
Related: Tesco beats forecasts with Christmas sales rise
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Brent crude is bobbing around $30.50/barrel this morning, after hitting $29.73 last night.
That means motorists should be able to look forward to cheaper fuel costs, given that crude has lost a third of its value since December.
Industry body RAC insists that fuel prices should follow suit. Spokesman Simon Williams said:
“With no apparent end in sight to the free-falling price of oil, motorists can expect some really low fuel prices in 2016.
“Breaking through the pound a litre price point for both petrol and diesel was clearly a welcome landmark, but it looks as though there is more to come.
In fact we may get to a bizarre time when a litre of fuel is cheaper than a litre of some bottled waters.”
block-time updated-timeUpdated at 7.44am GMT
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Analysts: Self-perpetuating fear is gripping the market
Angus Nicholson of IG has warned that “a negative feedback loop of self-perpetuating fear seems to have gripped global markets”, as shares dive across
Today’s selloff is also being driven by renewed fears over the situation in
, and the possibility that
will devalue the yuan sharply.
China’s poor communication of FX (foreign exchange) policy and concomitant selloff in its equities appear to have lit a fire of negativity beneath global market sentiment. The threat of a dramatic devaluation by the Chinese government to ease its deflationary and debt-related pressures hangs heavy on markets like a Sword of Damocles.
Despite China’s successful efforts this week to regain control over the offshore renminbi, the possibility of a major one-off devaluation in the currency is probably far higher than a black swan tail risk event. The fact that it is reportedly even being discussed by People’s Bank of China (PBoC) advisors likely assigns it a probability as high as 20%.
block-time published-time 7.22am GMT
Pessimism has swept through
today, sending markets down to a three-year low.
The sight of Brent crude oil below $30/barrel prompted big losses across the major indices.
Japan’s Nikkei tumbled by 4% at one state, and finished the day down 474 points (down 2.7%) at 17,240. The Australian market shed 1.5%.
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Introduction: Market gloom and a flurry of retail results Traders on the floor of the New York Stock Exchange
last night. Photograph: Spencer Platt
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
Tin hats on, chaps. It could be a rough day’s trading in the stock markets, after the latest slide in the oil price hits confidence.
Last night, Brent crude oil fell through $30 per barrel for the first time since 2004, after new inventory figures showed that US gasoline stockpiles had hit a record high.
That sent Wall Street traders into a selling frenzy last night, as my colleague Rupert Neate explains:
US stocks fell heavily on Wednesday, with the Standard & Poor’s 500 falling 2.5% to take the index below 1,900 points for the first time since September, due to growing concerns about the falling oil price, which dipped below $30 a barrel for the first time in nearly 12 years.
The S&P 500, which closed at 1,890 points, suffered its worst day since September and has fallen by 10% since its November peak taking it into “correction” territory, something that has not happened since August 2014.
Related: Oil and US share prices tumble over fears for global economy
Asian markets have already taken a bath, and
is expected to follow suit. Spread-betters are calling the FTSE
100 down over 1%:
enltrOur European opening calls: $FTSE 5887 down 74 $DAX 9845 down 116 $CAC 4333 down 59 $IBEX 8805 down 130 $MIB 19899 down 241
— IGSquawk (@IGSquawk) January 14, 2016
And it’s a big day for corporate news, with a flurry of retailers reporting Christmas trading.
That includes Tesco, Home Retail, Burberry, JD Sports, ASOS, Associated British Foods (which owns Primark ), Mothercare, Moss Bros and SuperGroup. We’ll do our best to cover them all.
block-time updated-timeUpdated at 7.57am GMT
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