The FTSE 100 index looks set to retreat at the start on Friday, extending Thursday’s decline following three previous sessions of strong gains as the early week optimism over a coronavirus (COVID-19) vaccine. This comes as chaos ensues in the British Government as Boris Johnson is hit with a number of resignations. Last night a Downing Strret source said that Dominic Cummings, the Prime Minister’s chief Downing Street advisor, is to resign at the beginning of next year.
According to a Downing Street source, speaking to the Daily Mail, Mr Cummings will quit at start of next year when the Brexit transition process is complete.
Mr Cummings is said to be furious that Lee Cain, the Number 10 communications director, was ousted after an internal power struggle.
The power struggle within Number 10 erupted after Mr Johnson attempted to promote Mr Cain to be his new chief of staff.
However this was reportedly opposed by other influential Downing Street figures, including his fiancé Carrie Symonds.
As a result Mr Cain resigned on Wednesday.
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5pm update: FTSE closes in the red
The FTSE 100 index closed 0.4% lower as industrial stocks declined amid concerns over rising COVID-19 infections.
However the blue chip index still logged its best weekly gain since April on hopes of an effective vaccine.
3.30pm update: Wall Street opens with gains
Disney and Cisco’s upbeat results saw them among the top gainers pushing the Dow Jones Industrial Average up by 0.8%.
Walt Disney Co stocks rose 2.2% on the back of its rapid growing streaming business and a partial recovery at its theme parks which were forced to close due to the coronavirus pandemic.
Cisco Systems Inc jumped 6.3% amid a surge in demand for work-from-home equipment.
At 09.42 am ET (2.42pm GMT) the Dow Jones Industrial Average rose 238.36 points, or 0.82%, to 29,318.53, and the S&P 500 gained 28.46 points, or 0.80%, to 3,565.47. The Nasdaq Composite gained 98.56 points, or 0.84%, to 11,808.15.
3pm update: FTSE down recovers slightly after day of woes
The FTSE-100 index at 2.45pm was down 24.32 at 6314.62, bouncing back slightly 6301.65 at 1.45pm
2.45pm update: Dutch financial services company cuts ties with Pornhub
ING Groep NV, the largest Dutch financial services company, said on Friday it had sold part of its Payvision payments business, including cutting ties with online pornography and gambling customers.
The sale, which took place in September, was earlier reported by Dutch daily Het Financieele Dagblad.
ING spokesman Daan Wentholt said the section of Payvision’s business was sold for 1 euro ($1.20) to one of the payment company’s founders, who left Payvision in April.
Wentholt did not disclose the size of the business sold, but said it was the part that dealt with adult website Pornhub among other customers.
“Although there is no legal objection to the adult and gambling segments, ING applies its own policy” the bank said in a statement on its website.
2.10pm update: Wall Street set to open high as Disney and Cisco jumped
Wall Street was set to open higher on Friday as Disney and Cisco jumped after reporting upbeat results, but investors remained cautious at the end of a volatile trading week that saw record surges in coronavirus cases as well as increased hopes of an effective vaccine.
Cisco Systems Inc and Walt Disney Co were the top gainers among Dow components trading before the bell. Futures tracking the blue-chip index were 0.7 percent higher.
The network gear maker jumped 7.2% premarket as it gained from a work-from-home driven surge in demand, while Disney rose 3% as its rapidly growing streaming video business, and a partial recovery at its theme parks limited its quarterly loss.
“We are finishing an extremely strong earnings season with an exclamation point on Disney’s impressive earnings,” said Ryan Detrick, senior market strategist at LPL Financial in Charlotte, North Carolina.
“Corporate America is still optimistic about the future and that’s helping stocks recover, along with positive vaccine news earlier this week.”
Wall St set to bounce back as Cisco, Disney jump
2pm update: Bank of England deputy governor on job not to protect the banks
Bank of England Deputy Governor Jon Cunliffe said it was not his job to protect banks from the impact of future digital currencies, which could dramatically reduce households’ willingness to hold money in traditional bank accounts.
“Our job is not to protect bank business models,” Cunliffe said.
Regulators including the BoE are considering what role digital currencies issued by central banks could play in simplifying domestic and international payments.
1.50pm update: Santander to axe jobs and close branches in Spain
Santander plans to axe 4,000 jobs and close up to 1,000 branches in Spain.
11.45am update: Eurozone economy grew in three months to September
The Eurozone economy grew 12.6pc in the three months to September, slightly below previous forecasts of 12.7pc.
On an annual basis, GDP fell by 4.4pc.
Eurostat said: “These were by far the sharpest increases observed since time series started in 1995, and a rebound compared with the second quarter of 2020, when GDP had decreased by 11.8pc in the euro area and by 11.4pc in the EU.”
Sterling rises amid reports Cummings resigns
10.10am update: European stocks move into green
The German DAX and French CAC have moved into positive territory, while the FTSE 100 has pared loss to trade just 0.1pc in the red.
10am update: Sterling rises amid reports Dominic Cummings was set to leave position
Sterling ticked up on Friday against the dollar and euro after news that British Prime Minister Boris Johnson’s top adviser and Brexit mastermind Dominic Cummings was set to leave, as talks over a trade deal with the European Union go down to the wire.
The negotiations are set to miss another deadline of mid-November and continue into next week, ahead of a potentially crucial meeting of European leaders next Thursday.
Analysts suggested the departure of Cummings – who drove the 2016 referendum campaign for Brexit and will leave his position in Downing Street when the transition period ends – could lead to a less hard line approach in talks with Brussels.
“Certainly with Cummings leaving, as he’s seen as one of the key people behind Brexit, it suggests Johnson could look at more compromise, which will be seen as pound positive. That’s likely how the market is taking that news,” said Lee Hardman, currency analyst at MUFG.
Sterling gained around a third of a percent versus the dollar and 0.3 percent against the euro in early trading.
9.30am update: Airline redundancy plans put on hold
Hundreds of airline catering jobs have been reprieved after redundancy plans were put on hold, according to a union.
The GMB praised Baxter Storey, chief caterer for British Airways business lounges, for pausing redundancy consultations.
Workers will now be on the extended furlough scheme until the company has a clearer idea of the future plan from BA, said the GMB.
Union official Perry Phillips said: “This is really good news for members who were facing redundancy but can now look forward to a merrier Christmas.
“Credit must go the company for recognising its highly skilled workforce – they have done everything they possibly can to keep staff employed through these dire times.
“By preserving its dedicated workers they will be ready and prepared for the return of passenger and freight flights seen before the pandemic.
“GMB is calling on other employers within the aviation industry considering redundancies to follow Baxter Storey’s lead and use the Government’s furlough and Job Support Schemes to protect their workers.”
Caffe Nero ask for better terms during lockdown
9.15am update: FTSE 100 slips
London’s FTSE 100 slipped on Friday as concerns about a jump in COVID-19 infections hit energy stocks and a stronger pound pressured exporters, although the index was still set for its best weekly run since June on hopes of an effective vaccine.
The commodity-heavy index fell 0.9 percent, with energy and bank stocks being among the biggest decliners.
The domestically-focussed mid-cap FTSE 250 index lost 0.6 percent, even as a media report said finance minister Rishi Sunak was preparing a further multibillion-pound giveaway to spur consumer spending.
Both the indexes are tracking their best week since June 5 after US drugmaker Pfizer Inc said on Monday its COVID-19 vaccine was 90 percent effective.
In company news, Premier Inn owner Whitbread Plc jumped 2.9 percent to the top of the FTSE 100 index after Barclays upgraded the stock to “overweight”.
9.05am update: Coffee chains ask for better terms during second lockdown
Bosses at struggling coffee chain Caffe Nero plan to ask their landlords for better terms after the second lockdown forced the coffee chain into a corner.
Chief executive Gerry Ford said it is now “imperative” that the business takes steps to reduce pressure, as its cafes were forced to close for a second time this year.
He said: “Like so many businesses in the hospitality sector, the pandemic has decimated trading, and although we had made significant progress in navigating the financial challenges of the first lockdown, the second lockdown has made it imperative that we take further action.”
Caffe Nero runs 800 shops in the UK, employing about 6,000 people.
Founded in 1997 by Mr Ford, it has expanded into 11 different countries, with a total of 1,000 stores.
FTSE 100 LIVE: FTSE plummets as Boris Johnson prepares for No10 chaos
9am update: UK shares fall as vaccine optimism fades
Michael Hewson, an analyst at CMC Markets UK, says: “Having rallied for eight days in a row it was perhaps inevitable that we would eventually see a sharp pullback in European stock markets at some point this week, and yesterday’s pullback had all the indications of early cracks in a lot of this week’s vaccine inspired optimism.
“For all the optimism about the delivery of a successful vaccine, the reality is that the announcement of a possible candidate was never likely to be able to put a stop to what is currently playing out across Europe, as well as the US, in terms of a sharp rise in coronavirus infection rates, hospitalisations, and ultimately, a sharp rise in mortality rates.
“With the worst of the cold weather yet to arrive and the pace of new infections only expected to increase as we head towards year end, it is slowly becoming apparent that the arrival of a vaccine can’t come soon enough.
“It is also quite apparent that even if one was to arrive in the near future it wouldn’t be able to change the situation on the ground as it is now, which means things are only likely to get worse before they get better.
“It is these concerns about another heavy hit to economic output as we head into year end, that is outweighing the latest economic Q3 GDP data that showed how well various economies rebounded from their Q2 lockdowns.”
8am update: Shares in Asiana Airlines soar
Shares in Asiana Airlines Inc soared on Friday on prospects that the debt-ridden pandemic-hit carrier may end up sharing a home with rival Korean Air Lines Co Ltd.
Asiana’s main creditor, the Korea Development Bank (KDB), said a deal with conglomerate Hanjin Group which owns South Korea’s biggest airline was one option it was considering.
Hanjin will submit a letter of intent to the bank as early as next week, according to the Korea Economic Daily.
For Asiana, which employs some 9,000 people and was restructuring heavily even before debt ballooned due to the coronavirus pandemic, a deal would provide a lifeline.