ADVFN Morning London Market Report: Monday 8 November 2021

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London open: Stocks little changed but Playtech rallies on takeover approach


London stocks were little changed in early trade on Monday, but Playtech was in the black after receiving a takeover bid from shareholder Gopher Investments.

At 0855 GMT, the FTSE 100 was up 0.1% at 7,308.02.

Richard Hunter, head of markets at Interactive Investor, said: “Despite China’s exports beating forecasts and resulting in a record trade surplus, imports missed estimates, suggesting a slowdown of domestic demand. Coupled with the other pressures which have more recently been troubling the economy, such as the rise in Covid-19 cases, power shortages and a shadow over the property sector, the route to normality seems less clear.

“This uncertainty spilled over into the UK in early trade, as markets struggled for direction. Further strength in the oil price boosted the majors, miners crept into positive territory and airline-related stocks were also in demand in the face of potentially recovering international travel. Less positively, there was some pressure on banking stocks as the Bank of England’s inaction last week on interest rates undid some of the optimism which had been building on a potential boost to earnings.

“Further colour is likely to be added to the current plight of the retailers this week, with updates from Primark owner Associated British FoodsMarks & Spencer and Burberry each giving indications on the present attitude of consumers to discretionary spending and, indeed, how sticky the previous switch to online shopping is becoming.”

In equity markets, cyber security firm Darktrace was the standout gainer on the FTSE 100 following heavy losses in the previous week.

Gambling software developer Playtech rallied after confirming it has received a preliminary takeover approach from Gopher Investments. Responding to press speculation, the gambling software developer said it is in “early stage and ongoing” discussions with Gopher.

JD Sports Fashion was weaker as it hit back at reports over a meeting between the retailer’s boss Peter Cowgill and Footasylum chief Barry Brown in an industrial estate car park, leading to claims they may have broken UK takeover rules.

Asset manager Abrdn was trading up after saying it is in talks with private equity firm J.C. Flowers & Co. about a potential acquisition of fund platform Interactive Investor.

Wealth manager Investec also gained after lifting its earnings per share guidance for the first half of 2022.

In broker note action, TI Fluid Systems was boosted by an upgrade to ‘overweight’ from ‘neutral’ at JPMorgan, while Helios Towers was knocked lower by a downgrade to ‘equalweight’ at Barclays.


Top 10 FTSE 100 Risers

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# Name Change Pct Change Cur Price
1 Royal Dutch Shell Plc +2.06% +34.60 1,717.60
2 Fresnillo Plc +1.93% +17.40 918.40
3 Crh Plc +1.85% +68.00 3,742.00
4 Royal Dutch Shell Plc +1.78% +30.00 1,713.40
5 Bp Plc +1.45% +5.00 350.40
6 Evraz Plc +1.36% +8.20 609.20
7 Schroders Plc +1.28% +47.00 3,714.00
8 Astrazeneca Plc +1.00% +93.00 9,402.00
9 Hikma Pharmaceuticals Plc +0.96% +23.00 2,414.00
10 Smiths Group Plc +0.91% +13.00 1,448.00


Top 10 FTSE 100 Fallers

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# Name Change Pct Change Cur Price
1 Carnival Plc -2.79% -47.40 1,648.60
2 Informa Plc -2.52% -13.80 534.60
3 Itv Plc -1.92% -2.15 109.85
4 Micro Focus International Plc -1.60% -6.60 404.70
5 International Consolidated Airlines Group S.a. -1.45% -2.62 177.54
6 Whitbread Plc -1.31% -45.00 3,381.00
7 Smith & Nephew Plc -1.28% -17.50 1,351.50
8 Easyjet Plc -1.19% -7.80 649.40
9 Glaxosmithkline Plc -1.18% -18.60 1,557.40
10 Rolls-royce Holdings Plc -1.15% -1.64 141.30


Europe open: Lacklustre shares flat; Siemens Ganesa in favour

European shares were flat at the opening on Monday after a mixed overnight session for Asian equities as investors also turned an eye towards US inflation data this week.

The pan-European Stoxx 600 had barely moved the needle in early deals after a strong performance last week where it reached record highs. Investors are waiting for US consumer prices readings on Wednesday that could influence Federal Reserve moves towards an interest rate rise.

Oil stocks made gains on the back of firmer crude prices after OPEC+ producers pushed back against a US call to accelerate output as demand nears pre-Covid-pandemic levels.

In equity news, Siemens Gamesa was the biggest climber on the Stoxx with the shares up 8.22% after its full-year results.

Richemont rose 4% after reports that activist hedge fund Third Point had built a stake in the luxury goods firm.

UK’s Playtech gained 2.8% after the online gambling software developer received a takeover bid from its second-biggest shareholder Gopher Investments.

Consumer goods group Henkel fell 5.8% after lowering its full-year outlook due to rising raw materials prices.

Frankfurt-listed shares of Tesla dropped 7.3% after voters on chief executive Elon Musk’s Twitter poll favoured a sale of 10% of his shares in the company.


US close: Stocks mixed after jobless claims fall

US stocks were in a mixed state at the close on Thursday, as investors mulled the latest initial jobless claims figures.

The Dow Jones Industrial Average was down 0.09% at 36,124.23, while the S&P 500 gained 0.42% to 4,680.06 and the Nasdaq Composite advanced 0.81% to 15,940.31.

Those moves came after Wednesday’s record highs, when the US Federal Reserve said the economy was strong enough for it to start tapering its pandemic bond buying programme.

“In line with our base case, the Fed announced it will reduce the monthly QE buying pace by $15bn per month starting from mid-November,” said Danske Bank.

“This means that QE is concluded in June.”

Danske did note that the Fed introduced some flexibility by saying the tapering pace could be adjusted if needed.

“We think the balance of risk is tilted towards a higher tapering pace, although it is not our base case.”

On the corporate front, Regeneron lost 0.69%, Kellogg was down 0.68%, Uber slipped 0.98% and Square was off 1.99%, while Qualcomm surged 12.73% as the earnings reports kept rolling ashore.

In macroeconomic news, the latest data from the Labor Department showed initial jobless claims fell by 14,000 to 269,000 in the week ended 30 October, hitting their lowest level since 14 March 2020.

Analysts had been expecting a figure of 275,000.

Investors were also waiting on the monthly non-farm payrolls report due out the next day.


Monday newspaper round-up: UK business output, electric cars, inflation

British businesses’ output has fallen for the sixth month in a row amid a supply chain crisis, energy price rises and a shortages of workers, according to a closely watched survey of big employers. UK business output hit its lowest level since March during the last national coronavirus lockdown, according to the accountancy firm BDO. Its measure fell from 105.23 points in September to 103.35 points in October. – Guardian

The UK’s long-haul airlines will put the worst of the pandemic – as well as old rivalries – behind them on Monday morning, when British Airways and Virgin Atlantic take off simultaneously at Heathrow for the first transatlantic flights carrying leisure travellers to the US since Covid-19 closed borders in March 2020. The bosses of Virgin and BA said it was a “pivotal moment” for the battered industry, with both airlines having registered enormous losses and shed thousands of staff during 20 months of restricted travel. – Guardian

Drivers making the switch to electric vehicles risk being forced to spend even more amid rising battery costs, experts have warned, in a blow to Britain’s green ambitions. The cost of lithium battery cells is rising for the first time after years of decline, with strained lithium supplies adding to rising prices of other cell materials. – Telegraph

A British biotech start-up that has created rapid PCR tests to stop coronavirus outbreaks on film sets has raised £15m to develop tests that can diagnose whether people have Covid-19, the flu or a cold at the same time. Newcastle-based QuantuMDx said it had secured the latest cash from Hong Kong venture capital firm Vita Spring, coming just eight months after it raised £11m in a round that included the Government’s Future Fund. – Telegraph

Royal London, Britain’s biggest mutual insurer, is considering plans to resurrect its offer to buy LV= if members at its smaller rival rebel over the terms of its controversial demutualisation. Bosses at Royal London have been monitoring the situation and believe LV= members might balk at the small rewards being offered and prefer a deal that preserves its mutual ethos. – The Times

The UK will soon see the most accurate and detailed measure of inflation in its history as the nation’s official statistics body begins to collect price and transaction data directly from supermarket checkout scanners. In a significant move to modernise the way that prices are collected to measure inflation, the Office for National Statistics is to start incorporating data taken from scanners in grocery stores across the UK. – The Times


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