That is all from us today – here are some of our top stories:
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Response to SolarWinds hack under investigation
America’s Securities and Exchange Commission (SEC) is investigating how companies responded to last year’s SolarWinds hack, which rippled through computer systems across the US government and corporate America.
Bloomberg has more:
The SEC is seeking to determine whether public-company victims made appropriate disclosures to investors, if there was suspicious trading related to the attack and whether private data was compromised, said people with direct knowledge of the matter who asked not to be named because the probe is private.
The SEC sent letters last week to companies that it believes were impacted, asking that they provide details on how their businesses were harmed, the people said. To encourage cooperation, the regulator signaled it wouldn’t penalize firms that share data voluntarily.
An SEC spokesperson declined to comment.
Lekoil finance chief resigns amid dispute
AIM-listed Lekoil’s finance chief Edward During has handed in his notice amid a dispute about the oil and gas exploration company’s future.
Lekoil Nigeria, 40pc owned by the London-listed company, said Mr During stepped down because Lekoil decided to delay the publication of its annual results due to Covid against his advice. Lekoil is currently at loggerheads with Lekoil Nigeria.
Earlier this month Lekoil’s board fired chief Olalekan Akinyanmi after he took a job as boss of Lekoil Nigeria without its approval. Mr Akinyanmi has refused to leave Lekoil Nigeria, which controls some of Lekoil’s biggest assets.
Lekoil chairwoman Aisha Muhammed-Oyebode said: “Mr During’s resignation from Lekoil Cayman (the London-listed firm) is a direct result of the continuous breaches of due process and corporate governance.”
Gupta-owned Jaguar Land Rover supplier faces collapse, says Sky
A branch of Sanjeev Gupta’s GFG Alliance faces collapse within days, Sky News is reporting.
Jaguar Land Rover supplier Liberty Aluminium Technologies (LAT) is reportedly in detailed talks with Close Brothers in an attempt to avert the GFG subsidiary being placed into administration.
Sources told Sky that LAT, which employs 250 people across three UK sites, could be forced into insolvency proceedings as early as this week. Read the full story here.
Gold recovers after last week’s 6pc drop
Spot gold has climbed 1.2pc to $1,784.36 an ounce amid investor buying following a 6pc fall last week, the biggest weekly decline in 15 months.
Bloomberg has more details:
Prices slumped to the lowest since April after policy makers at the Federal Reserve brought forward their expectations for when monetary tightening would start.
That prompted exchange-traded funds to add the most gold in three months on Friday, according to an initial tally by Bloomberg, a sign some investors saw bullion’s decline as a buying opportunity.
Gold market watchers were also looking to the US bond market, where rates on 10-year Treasuries have slumped in the wake of the Fed’s hawkish tilt. That makes non-interest bearing gold seem a more attractive haven.
Expert reaction: Supermarket shares surge
Michael Hewson, chief market analyst at CMC Markets UK, comments on how supermarkets have outperformed today, following the surprise Morrisons £5.5bn weekend bid from US buyout firm Clayton Dubilier and Rice:
While the bid was rejected it has given the entire sector a boost in anticipation of a bidding war, not only for Morrison but also for the likes of Sainsbury which has outperformed this year due to Czech billionaire Daniel Kretinsky increasing his stake in the business, while Tesco has become much cheaper since it returned over £5bn to shareholders in February.
The renewed interest in this sector is likely to be painful for the short sellers, and short positions in Sainsbury’s in particular, however few will shed many tears about that, as this undervalued sector undergoes renewed scrutiny.
Morrison’s shares are up over 30pc in anticipation of another higher bid, while Sainsbury is also outperforming as investors start to look more closely at the entire sector, as well as other areas of the UK stock market as well.
Ocado shares are also doing well buoyed by an upgrade from Morgan Stanley who lifted it to overweight, with a price target of 2,825p, sending the shares to their best levels this month. Even with today’s gains the shares are still down over 30pc from their February peaks.
[…] It’s also notable that overseas investors appear to see more value in UK assets than UK investors appear to, rather begging the question why we continue to sell ourselves short as a nation in finding value in UK listed businesses, leaving them vulnerable to the predatory gaze of private equity.
Cornish Lithium raises £6m from shareholders in flash fundraising
A Cornish lithium miner has doubled its value after investors rushed to take part in a £6m crowdfunding round amid rising demand for electric cars, reports Hannah Boland.
Cornish Lithium said it raised the cash on Crowdcube less than 20 minutes after opening the crowdfunding campaign, leaving it worth more than £80m – double what it achieved last October.
Chief executive and founder Jeremy Wrathall, a former Investec banker, said the new funds “will be used to continue the progress towards our goal of creating a battery metals hub for the UK”.
Lithium is a key component in electric car batteries, but is due to be in short supply within the next decade as demand surges.
Soho House plans IPO in New York
The Soho House private members club has started the process for its initial public offering in New York under the name of Membership Collective Group Inc., according to founder Nick Jones.
“Soho House has begun the process for an initial public offering on the New York Stock Exchange, with plans to list a company that will be known as the Membership Collective Group Inc., or MCG for short,” Jones said in an email to members.
“This move will enable us to accelerate our investment in improving both the physical and digital elements of your membership.”
Soho House was valued at $2bn last June at the time of a $100m (£81m) investment – led by its largest investor, American billionaire Ron Burkle – to shore up its finances after the pandemic forced its clubs to close.
The members club started with its first “house” in Soho, London in 1995 and now includes 27 “Soho Houses” in 10 countries. The Membership Collective Group will also include The Ned, Scorpios Beach Club, Soho Works and Soho Home.
Volvo strikes deal for gigafactory to produce sustainable electric car batteries
Volvo has struck a deal with Sweden’s Northvolt to build a new mega-battery plant, as it prepares to stop selling petrol, diesel and hybrid cars within the next ten years, reports Hannah Boland.
The carmaker said it had agreed a joint venture with Northvolt for a research and development centre, which would open next year and which would be focused on next-generation, sustainable battery cells.
The pair will also build a new gigafactory in Europe which could generate up to 50 gigawatt hours every year, equal to batteries for around 500,000 cars.
Production at the battery plant is set to start within the next five years.
The partnership will form a key pillar of Volvo’s plans for half of its car sales to be electric vehicles by 2025, and for it to only sell fully electric cars by 2030.
The batteries developed under the joint venture will also be used in its Polestar sister car brand. It would also come as a major boost to Europe’s battery industry, which has lagged behind other continents.
Figures from last year suggested that only 3pc of global lithium-ion battery manufacturing capacity was located in Europe. Northvolt is separately building another gigafactory, in Skellefteå, Sweden, which is expected to start production by the end of the year.
Google shuts London startup hub
Google parent Alphabet Inc is planning to shutter its seven-story start-up hub in London’s Shoreditch district and replace it with virtual services.
The company said the pandemic had showed it could connect with growing tech firms across the country without the need for a physical space.
“The U.K. startup community doesn’t need access to a single-shared physical space as much as it needs access to resources, mentors, and programs available at scale, anywhere,” Google said. “And so as the ecosystem develops, so does our approach to supporting” them.
Google opened the Campus facility near Old Street in 2012.
US stocks rise at opening bell
US stocks have climbed this morning in New York, with traders looking for more guidance from Federal Reserve officials on tapering their massive bond-buying program. Treasuries fell.
A sense of calm returned to US markets after the Fed’s hawkish pivot spurred a selloff in risk assets last week, with Asian shares tumbling overnight.
The S&P 500 rose 0.4pc, halting a four-day slide as companies tied to the economic reopening outperformed technology shares. The Nasdaq 100 was little changed and The Dow Jones Industrial Average rose 0.6pc.
Amazon.com Inc. kicked off its annual Prime Day sale, with merchants curbing discounts amid rising shipping costs.
Torchlight Energy Resources Inc. led gains in meme shares after the gas producer was touted on Reddit as a potential short squeeze.
UK airlines call for amber-list isolation period to be scrapped
Britain’s aviation industry has called on the government to remove Covid testing and isolation requirements for fully vaccinated travellers from amber list countries to help tourism recover.
Airlines UK said in a letter to Transport Secretary Grant Shapps today that fully vaccinated travellers from “amber” destinations should be exempt from the 10-day isolation requirement, while those coming from both “amber” and “green” countries should not need to have expensive PCR tests.
The group’s members include Easyjet, British Airways, TUI and Virgin Atlantic.
“Given the incredible efficacy of vaccines and their critical role in easing domestic restrictions, we believe that the framework can safely be adjusted to provide a pathway for vaccinated people to travel without restriction, alongside steps to reduce restrictions for green and amber categories, making them more proportionate for travellers,” the group said.
British Prime Minister Boris Johnson said earlier that holidaymakers would face hassle and delays this year if they travelled abroad because the priority would remain keeping the country safe from the virus.
Bitcoin sell-off reverberates through other cryptocurrencies
Today’s Bitcoin sell off is reverberating across the spectrum of cryptocurrencies with Coindesk data showing the majority in the red over the past 24 hours.
Bitcoin remains down 4.5pc at $32,601 while Ethereum is down 6.6pc at $1,968 and Dogecoin has fallen 15pc to trade at $0.22.
Capita sells government joint venture Axelos for £380m
Outsourcing giant Capita has sold its IT joint venture with the Cabinet Office for £380m, as the company looks to continue offloading assets, reports Ben Gartside.
Axelos, which Capita owns a 51pc stake in, has been sold to software company PeopleCert. The deal is expected to raise around £180m for Capita, and around £170m for the Government.
Capita had announced its decision to sell Axelos earlier this year, as part of Chief Executive Jon Lewis’ ‘Future Capita’ transformation plan.
Lewis’ strategy is to sell £400m worth of divisions and save £50m a year, following poor acquisitions by previous management. The transformation is Lewis’ second attempt to change the fortunes of the embattled outsourcer since joining the company in December 2017.
In 2018 Lewis launched the ‘Simplify, Strengthen, Succeed’ strategy, which saw a £701m rights issue accompanying £300m worth of planned disposals.
The sale of Axelos marks Capita’ second disposal of the year so far, following the deal which saw Montagu takeover Education software business ESS in February for £400m.
Lewis is confident that Capita can return to revenue growth this year, after winning a Royal Navy training contract for £925m as part of a wider consortium, and two contract extensions with telecoms firms worth £586m.
More on the surprise shake up at Norwegian Air
Budget airline Norwegian has fired its chief executive after it was forced to push through a major restructuring during the pandemic to stave off a collapse, writes Hannah Boland.
Norwegian Air Shuttle said its board had voted to end boss Jacob Schram’s contract, and instead replace him with chief financial officer Geir Karlsen.
The airline said Mr Karlsen had “successfully led the financial reconstruction of Norwegian”. It comes just weeks after the business secured approval from creditors to restructure its debt, allowing it to emerge from bankruptcy and to raise 3.73bn kroner (£310m) in new capital.
Mr Schram had headed up the business for 18 months. Norwegian said he would be supporting the board “on a full time basis” during his nine-month notice period up to March 31, 2022.
Norwegian attempted to cut Mr Schram’s pay-off to “bring the severance payments to a level reflecting the challenges of the industry”, but said that it was unable to reach an agreement.
Mr Schram is set to receive two years’ salary.
Mr Karlsen said: “Our main priorities will be to increase the profitability of our low-cost operations and to attract new and existing customers in all key markets.”
During 2020, the company posted a record annual loss of €2.2bn (£1.9bn), significantly higher than the €150m loss it racked up for 2019, and said it had carried 81pc fewer passengers during the year.
US stock futures edge higher
US equity futures edged higher today, as markets regained their confidence following a sell-off in Asia spurred by the Federal Reserve’s surprise hawkishness last week.
Futures on the S&P 500 rose 0.4pc, futures on the Nasdaq 100 rose 0.2pc and futures on the Dow Jones Industrial Average rose 0.6pc.
Traders will be paying close attention to this week’s appearances by Fed policy makers, including Chair Jerome Powell, for more guidance on a possible timeline for tapering asset purchases.
“We have another possibly two years before the Fed starts to take action,” John Woods, Asia Pacific chief investment officer at Credit Suisse Group AG, said on Bloomberg Television.
“So I do anticipate there will be a period of choppy, sideways trading as the volatility associated with this debate in the Fed is reflected in pricing, but absolutely I take the view that yields will tick a little higher.”
Goldman Sachs expands in UK despite Brexit warnings
Goldman Sachs has unveiled plans to expand further in Britain years after it warned a difficult Brexit would negatively affect its investment in the UK, reports Lucy Burton.
The Wall Street giant is now launching a UK transaction bank, which provides companies with day-to-day treasury operations such as payment processing and payroll, a year after it set up the division in the US.
The bank, which has been pushing to diversify away from its core investment banking business, said its transaction arm in America already had more than 250 clients, had taken more than $35bn (£25bn) in deposits and had processed trillions of dollars through its systems.
Its latest plans come as America’s biggest banks race to expand in Britain, threatening to take more market share from UK lenders, such as HSBC and Barclays, and piling further pressure onto loss-making fintech start-ups.
Here’s the day’s best from The Telegraph’s Money team:
China’s Bitcoin crackdown targets region popular with miners
The spread of China’s cryptocurrency crackdown to Sichuan is significant because the region is China’s second-biggest bitcoin mining province, according to data compiled by the University of Cambridge.
According to the University’s Centre for Alternative Finance, China is where most of the world’s cryptocurrency mining takes place. Within China, the two most popular regions for miners are Xinjiang and Sichuan.
Some miners move their activities to Sichuan in rainy summer months to take advantage of its rich hydropower resources.
The university calculates where Bitcoin miners are distributed by analysing an area’s “Bitcoin hashrate” – the computational power being used to mine or process cryptocurrency transactions.
Bitcoin falls to two week low
Bitcoin has fallen 11pc to to a two-week low of $31,886, amid an intensifying cryptocurrency crackdown in China.
China has ordered payment platform Alipay and domestic banks to not provide services linked to trading of virtual currencies. The institutions were also ordered to cut off payment channels for crypto exchanges and over-the-counter platforms, the People’s Bank of China said in a statement.
“The PBOC crackdown is going further than initially expected,” Jonathan Cheesman, head of over-the-counter and institutional sales at crypto derivatives exchange FTX, told Bloomberg. “Mining was phase one and speculation is phase two.”
Ya’an, a Chinese city in Sichuan province with abundant hydropower, has stepped up action to rein in mining.
A Ya’an government official told at least one Bitcoin miner that the city has promised to root out all Bitcoin and Ether mining operations within a year, said a person with knowledge of the situation.
In the backdrop, the appetite for risk assets has diminished after last week’s hawkish policy pivot by the Federal Reserve.
Hopes for holiday season fade as Johnson says overseas travellers will face hassle and delays
Prime Minister Boris Johnson has said that travellers would face hassle and delays this year if they try to go abroad because the priority would be keeping the country safe from the coronavirus.
“I want to stress that this is going to be, whatever happens, a difficult year for travel: there will be hassle, there will be delays, I’m afraid, because the priority has got to be to keep the country safe and to stop the virus coming back in,” Johnson said.
Asked if the government was looking at easing the rules for those who have been double-vaccinated, Johnson said: “We’re looking at it but I want to stress that the emphasis is going to be on making sure that we can protect the country from the virus coming back in.”
Airline shares had risen last week after reports suggested the double-vaccinated would be able to go on holiday without having to quarantine.
Norwegian Air fires chief executive in ‘surprise’ reshuffle
Norwegian Air has sacked chief executive Jacob Schram who led the budget carrier through restructuring and said it was promoting chief financial officer Geir Karlsen to the top job with immediate effect.
The board voted on June 20 to end Schram’s 18-month tenure but the airline said he would support the carrier on a full-time basis during his notice period up to March 31.
“The board’s decision to fire me came as a big surprise,” Schram told Reuters.
Sterling inches higher after falling to two month lows
Sterling has lifted today, after falling overnight to its lowest level since April as the currency remained vulnerable since the US Federal Reserve surprised the market with its hawkish tone last week.
The pound dropped below $1.38 against the dollar overnight and was close to last week’s levels when the Fed signalled it would raise interest rates and end emergency bond-buying sooner than expected.
This morning the pound has risen 0.5pc against the dollar to $1.3877, after falling to its lowest of $1.3786 since April 16.
Versus the euro, it was also up 0.3pc at €1.1672, following its worst week against the single currency since April.
“GBP has been underperforming even the soft euro as the combination of dollar strength, rising daily COVID-19 case numbers and European politics have started to weigh,” ING analysts wrote in a note to clients.
Revolut operating losses double in 2020
Operating losses at London-headquartered fintech start-up Revolut doubled to £201m in 2020, with rapid global growth causing staff costs to surge.
Administrative expenses at the company rose to £266m, compared to £125m in 2019, according to the company’s latest annual report.
That was driven by £170m staff costs, almost triple the previous wage bill, and higher spending on functions like risk and compliance.
“We want to keep investing in growth,” chief executive officer Storonsky said in an interview this month. The company is working on expanding its cryptocurrency offering.
The company has recently applied for a full banking license in the UK and hopes to be granted one next year as talks progress with regulators.
WeWork rebounds, posting best net desk sales since September 2019
Co-working company WeWork said today that it sold enough desks in April and May – and had fewer cancellations – to record its best net desk sales since September 2019.
New York-based WeWork has maintained that it’s well-positioned to regain customers as vaccines prompt workers to return to the office and employers opt for more flexible workspaces.
WeWork’s occupancy rate, which used to hover above 70pc, dropped to 47pc late last year. It has since risen to 53pc at the end of May, the company said.
The recovery is also fairly widespread across the globe. For the first time since September 2019, almost all of its regional markets sold more new desks than they lost through cancellations or other departures.
However in the last two months, the company has also left 17 buildings and renegotiated the leases for 51 more to further cut expenses, it said.
Hotel Chocolat buys beauty company for £4
Hotel Chocolat has bought a beauty product business for less than the price of a box of chocolates.
PA has the details:
The confectioner said it paid £4 for Rabot 1745, a five-year-old company which last year lost around £400,000. The cheapest box of chocolates on Hotel Chocolat’s website is £5.
The chocolate maker already owned nearly half of the shares in Rabot – it helped set up the business in 2016 alongside its chairman, Andrew Gerrie. The idea was to create a range of beauty products inspired by the company’s cacao farm in Saint Lucia.
Mr Gerrie will receive around £3 for his 40pc stake in the business, with the rest of the investors sharing about £1 between them.
However, the chairman can expect much more out of the deal. After it buys his stake, Hotel Chocolat will pay off the loan that Mr Gerrie provided to Rabot. The more than £744,000 will be paid off with some 200,000 shares in Hotel Chocolat, increasing his stake by around 40pc.
The company said it is well placed to leverage the value of Rabot’s inventory and develop its beauty products.
Amazon destroys millions of items of unsold stock each year, says ITV
Amazon is destroying millions of items of unsold stock, including unused smart TVs and laptops, in its UK warehouses every year, according to an investigation by ITV.
The broadcaster’s undercover footage from inside Amazon’s Dunfermline warehouse in Fife shows smart TVs, laptops, drones, hairdryers, top of the range headphones, computer drives, books and thousands of sealed face masks all sorted into boxes marked “destroy”.
A leaked document from the Dunfermline warehouse showed more than 124,000 items were marked ‘destroy’ in one week in April.
Amazon told ITV: “No items are sent to landfill in the UK. As a last resort, we will send items to energy recovery, but we’re working hard to drive the number of times this happens down to zero.”
City retains crown as Europe’s top destination for financial services investment
The UK has retained its crown as Europe’s most attractive destination for financial services investment – but the gap with France is closing, reports Simon Foy.
Britain attracted 56 financial services foreign direct investment (FDI) projects in 2020, the highest in Europe, according to a survey from EY.
However, it is 43 projects lower than in 2019, representing the largest year-on-year decline in a decade.
France came in second place after attracting 49 financial services projects, an increase of 11 on the previous year.
FTSE 100 rises 0.3pc
London’s FTSE 100 has risen 0.3pc to 7,040 points, after dipping below the 7,000 mark earlier this morning.
The index has been buoyed by supermarket shares which are rising this morning, as investors interpret the £5.5bn Morrisons bid byClayton Dubilier & Rice as a signal that buy-out firms are circling Britain’s supermarkets.
Today, Ocado shares are up 5pc, Sainsbury’s have risen 3.7pc and Tesco lifted 1.4pc.
House price growth slows in June
UK house price growth slowed in June as record prices and a lack of properties to purchase drained momentum from the market, Rightmove said.
The online property portal said prices grew 0.8pc this month after a 1.8pc gain in May, pushing the average cost of a home to £336,073.
The increase is still the largest at this time of year since 2015, boosted by people seeking to leave London.
“Lifestyle re-evaluations have taken firm root, which will lead to sustained demand, especially for rural and suburban locations,” Nick Leeming of real estate agency Jackson-Stops, told Bloomberg.
“We’re still seeing people head to countryside hot-spots in their droves. While buyers remain active, the availability of stock on the market has continued to contract.”
Wizz Air operating at 85pc of 2019 capacity, says chief exec
Wizz Air chief executive Jozsef Varadi said today the London-listed budget carrier was currently operating around 85pc of its 2019 capacity, and would be operating more than 100pc of that level by the end of August
Speaking at the virtual Paris Air Forum, he said he hoped to see a way out of the coronavirus crisis that has devastated the airline industry in the next 6-12 months.
Wizz Air shares are down 0.7pc today.
Anthony Joshua becomes shareholder in British CBD company Love Hemp
The boxer Anthony Joshua has become a shareholder in British CBD supplier, Love Hemp, after signing a three-year endorsement deal for the brand.
AJ Bell financial analyst Danni Hewson commented on the tie-up:
Like the David Beckham backed Cellular Goods the company’s products are aimed at athletes of every level and getting the boxer involved in product development will give the goods an extra cache amongst users. It’s also interesting that Joshua is being rewarded with shares rather than a fat fee.
The CBD market is growing rapidly and that translated into a 557pc jump in revenues for Love Hemp in the six months to December 2020 compared with the same period the year before. Whilst the business still posted a loss it was tiny compared to that in 2019. The pandemic has made many people take a long hard look at their health and fitness. Lifestyles are changing and brands like Love Hemp stand to profit.
Sun European Partners sells furniture retailer Sharps to Epiris
Sun European Partners has agreed to sell West Midlands-based bedroom retailer Sharps to funds advised by Epiris for an undisclosed amount, the company said today.
During its ownership, Sun shifted Sharps’s focus toward direct-to-consumer sales and made what it called “significant operational improvements” at the company.
The exit follows Sun’s disposal of bed and mattress specialist Dreams late last month. It also adds to a flurry of deals in the market for so-called secondary buyouts, where financial sponsors sell stakes to other private equity investors.
Founded in 1973, Sharps was saved from administration by Sun in 2011. The private equity firm put it up for sale in 2017 before holding onto the business.
Half of London companies plan for permanent home working
Almost half of London companies with staff working from home, expect them to continue remote-working up to five days a week after the pandemic finishes.
Smaller businesses are more likely than larger ones to move ahead with a permanent shift to remote working, according to a poll of 520 business leaders by the London Chamber of Commerce and Industry.
The poll also found that slightly more companies said employees’ main reason for being concerned about returning to the office was the risk of contracting Covid-19 when commuting, rather than at the office.
Rio Tinto down 2.26pc
Rio Tinto is trailing the FTSE 100 for losses this morning, as mining stocks across Europe track a slump in metals prices.
The world’s second largest metals and mining company is down 2.26pc, after the US Federal Reserve signalled it would raise interest rates and end emergency bond buying sooner than expected, lifting the dollar and denting commodity prices.
“The headwinds coming from a stronger USD and further measures such as the release of metal from strategic Chinese reserves are likely to keep downward pressure on the base metals sector,” said ANZ analysts in a note, referring to a Chinese state sale plan announced last week.
However this year’s rally in commodity prices still leaves Rio Tinto’s share price up 34pc compared to June 2020.
Oil climbs as Iran nuclear deal talks drag on
Oil has climbed close to $72 a barrel, after the latest efforts to revive the nuclear deal between world powers and Iran ended without an agreement.
Futures in New York rose 0.5pc after increasing for a fourth week. Diplomats adjourned a sixth round of meetings with significant gaps remaining to mend the accord, the third time since talks began in April that negotiators have missed self-imposed deadlines to resurrect the agreement which will likely lead to the easing of US sanctions and higher crude flows.
The election of conservative cleric Ebrahim Raisi as Iran’s president may also complicate future talks. Raisi is subject to US sanctions personally and Tehran insists they must be removed as part of an agreement to revive the pact.
Supermarket shares surge after Morrison’s bid
Supermarket stocks are surging this morning after Morrison’s rejected a £5.5bn bid by a US buyout firm Clayton Dubilier & Rice’s over the weekend.
So far this morning, Sainsbury has gained 10p or 4.42pc, to 270.4p. Tesco shares have gained 5p or 2.3pc, to 227p. And Ocado has also risen 2.23pc or 38p.
Travel and mining stocks weigh on FTSE
London’s FTSE 100 index fell to its lowest in a month on Monday, as travel and mining stocks weighed on the index.
Investors are preoccupied with inflation concerns ahead of economic data and the Bank of England’s rate decision later in the week.
Data last week showed Britain’s inflation surged past its central bank’s target in May, compared with the previous year, raising concerns that the Bank of England could pull back its monetary support later this week.
The blue-chip index dropped 0.8pc to its lowest since May 19. Travel stocks fell the most, down nearly 7.5pv, while miners declined 1.7pc.
Crytpocurrencies tumble following China crackdown
Cryptocurrencies have tumbled this morning as China’s crackdown on bitcoin mining expanded to the province of Sichuan.
Bitcoin fell to as low as $32,288 for the first time since June 8, and was last down 6.9pc at around $33,043.
Smaller rival ether dropped below $2,000 for the first time since May 23, before recovering slightly to $2,026.
Sichuan is China’s second-biggest bitcoin mining province, according to data compiled by the University of Cambridge. Miners in the region mostly use hydropower to power the electricity-hungry equipment necessary to mine new Bitcoin.
The Sichuan Provincial Development and Reform Commission and the Sichuan Energy Bureau issued a joint notice on Friday demanding the closure of 26 suspected cryptocurrency mining projects by yesterday. The authorities have also urged local governments to start combing the region for other projects and shut them down.
Morrison shares open 30pc up after
Shares in Morrison have opened 30pc up, after the supermarket rejected a shock £5.5bn bid by a US buyout firm, Clayton Dubilier & Rice’s.
There are suggestions that the offer will spark a bidding war for the supermarket, with offers expected to come from American private equity firms Lone Star and Apollo Global Management as well as Amazon, which has a long-running grocery deal with Morrisons.
Nick Bubb, an independent retail analyst, said: “It is possible that Amazon will gatecrash the party and come in with an offer themselves. The cash flows and property assets of Morrisons and the low valuation are bound to interest private equity players like CD&R.”
The 30pc gain in Morrison shares lift the grocer’s market value to £5.6bn. Morrison had a market value of £4.3bn before the bid.
FTSE falls on opening
The FTSE 100 has fallen 0.7pc, below the key level of 7,000 points on opening. It is currently trading down 47.9 points at 6,969.50.
The FTSE 250 has also dropped 0.4pc or 102 points to trade a 22,222 this morning.
Good morning. The FTSE looks set to follow Asian markets lower this morning after hawkish comments from the US Federal Reserve last week.
5 things to start your day
1) Shock £5.5bn Morrisons offer set to spark bidding war: Amazon and private equity expected to circle grocer after it rejected approach from US firm advised by former Tesco boss.
2) City keeps financial services crown – but France closes in: London remains Europe’s most popular destination for foreign direct investment despite largest drop in a decade.
3) JLR backs car payments app set to rip up paper forms: Carmaker plans to integrate Caura’s app into infotainment systems to allow drivers to pay MOT, car tax and congestion charges.
4) UK’s tough travel rules risk rise in eurozone unemployment: At least half a million jobs will go as region’s support schemes end, with ‘Club Med’ countries left off UK’s green list.
5) Facebook warns junk food ad ban ‘will hurt small business’: Social media giant warns outlawing online ads for unhealthy food would ‘severely impact’ UK’s bakeries and coffee shops.
What happened overnight
Asian markets skidded on Monday, with Japan’s Nikkei 225 index down 3.4pc, after a sell-off Friday on Wall Street gave the S&P 500 its worst weekly loss since February.
The Nikkei gave up 983 points to 27,980.87 and the Kospi in Seoul lost 1.3pc to 3,227.92. Hong Kong’s Hang Seng index also lost 1.3pc, to 28,427.13. Australia’s S&P/ASX 200 declined 1.7pc to 7,243.50 and the Shanghai Composite index declined 0.3pc, to 3,514.61.