FTSE 100 Live: US rates rise fear spooks market, Next reveals festive cheer

The FTSE 100 has closed down 73 points, or 1%, at 7443, dragged lower by rate rise fears.

Design software firm Aveva is bottom of the pile, down over 5% after spending the day in the red. Meanwhile, banks ended the day with handsome gains: Standard Chartered rose 3.7%, while Lloyds, HSBC and Natwest all gained 2% or more.

The rotation out of tech and into banks is being driven by investor bets that interest rates are about to go up.

Danni Hewson at AJ Bell says: “Will this be the tale on repeat for early 2022? Banking and Energy shares heading up and rate sensitive growth stocks heading down?

“Investors shouldn’t have been surprised by the increasingly hawkish tone being employed by the US Federal Reserve and yet just the anticipation of seeing its most recent comments in black and white prompted a tech stock sell off yesterday which has just kept on rolling.

“It certainly feels like the piper is calling to be paid, inflation numbers for the next few months look pretty nailed on if Germany’s latest update is anything to go by.”

Data out today showed German inflation running at 5.7% in December, well above the level economists normally target but down slightly on November’s 6% reading.

That’s all from us on the blog today. Join us again tomorrow for more market action, with Halifax house price data out at 7am.

Wall Street has opened slightly higher, with tech stocks stemming the bleeding after a huge sell-off on Wednesday.

The Nasdaq, the main barometer of US tech sentiment, is up about a third of a percent shortly after the open, while the S&P 500 has gained a quarter of a percent and the Dow is down about 0.1%.

The mild bounce for tech is probably being supported by the worse-than-expected US jobs numbers just before the open. A weaker jobs picture could make the Fed less likely to hike rates — though it looks pretty marginal at the moment.

The FTSE is still struggling for direction and is down around 0.8% with an hour and a half of the trading day left.

The latest US jobless numbers have been published in the last hour and they have come in higher than forecast. There were 207,000 initial jobless claims in the four weeks to 31 December, above the 200,000 economists had forecast.

Dan Boardman-Weston, CIO at BRI Wealth Management, says: “Whilst this is a slight negative, it’s worth noting that they remain at historically low levels and continue to show significant strength in the US labour market. This is likely to add further impetus for the Fed to raise rates faster or sooner than the market had been expecting.

“Unless the rapid spread of Omicron starts to put the economy under significant pressure – which markets don’t expect will happen – then the stage looks set for continued economic growth and for monetary policy to become tighter over the coming months.”

Wall Street opens in about 20 minutes, with futures pointing to mixed open — the tech-heavy Nasdaq is called to drop another half a percent at the open, while the Dow should rise 0.2%.

On this side of the pond the FTSE’s mild lunchtime fight back has faded, with the bluechip index down about 0.7%.

Rand spent 12 years in the British army before moving into banking in 2000. He began his career at JPMorgan before moving to Barclays, where he worked for 12 years. Rand left the bank in late 2020.

He will take over as CEO at Monument from Mintoo Bhandari, a former managing director at US investment giant Apollo who founded the lender in 2018.

Pod Point, which listed in London in November, has said it continues to enjoy “strong trading” and full-year results are on track with forecasts.

The company works with businesses like Tesco and Barratt Homes to install charging infrastructure in public places and private properties.

Shares have improved 8.7p, or 3.5%, to 255.5p on the update.

Perhaps surprisingly, CEO Erik Fairbairn says it’s “exactly the right time” for the government to cut electric vehicle grants, as new figures showed a quarter of vehicles bought at the end of last year were battery powered.

The Society of Motor Manufacturers and Traders (SMMT) said 2021 was the most successful year in history for electric vehicles, with plug-ins representing 18.5% all new cars bought last year. Momentum is accelerating, with battery powered vehicles accounting for 25.5% of the market by December.

“What subsidies are for is to encourage activity before it’s commercially viable,” Fairbairn told the Standard. “I think electric vehicles stand up on their own two feet now.”

Having been down as much as 1% earlier in the session, the FTSE 100 has managed to claw back some ground.

The bluechip index is down around 44 points, or 0.6%, at 7473 this lunchtime. Tech companies still foot the index, with industrial design software business Aveva the biggest faller.

Tech stocks have sold off around the world after new minutes from the Fed overnight suggesting rates could rise sooner than expected in the US. When America sneezes, the world catches a cold and there are expectations that other central banks could now follow suite.

Rising rates are bad for high-growth stocks like tech but good for banks. And unlike US markets, which have a large number of tech businesses, London’s stock market relies much more on lenders than it does tech.

Asian-focused bank Standard Chartered is currently at the top of the FTSE leader board with a gain of 3.6%. Lloyds, HSBC, Natwest and Barclays are all not far behind. In ad land, WPP is up just over 1% after an upgrade to ‘Buy’ from Shore Capital.

Elsewhere, the top stories this lunchtime are:

Dr Martens’ share price has suffered its biggest one-day fall after former owner Permira, which took the boot-maker public 12 months ago, offloaded a 6.5% stake at a discount.

The UK-based private equity group sold 65 million shares at 395p, below yesterday’s 421p closing price, sending the stock down by as much as 13% to 366p.

Permira raised £257 million from the sell-off, which was offered via its Luxembourg-based IngreLux fund, in a placing to institutional investors overseen by Goldman Sachs.

That is not far short of the £300 million it paid to take control of the company in 2013.

It still retains 36% of Dr Marten’s issued share capital.

The iconic boot-maker enjoyed a bumper IPO last January with shares leaping 16% on its market debut.

It posted a 46% jump in pre-tax profits to £61 million in the six months to September 30 but wa r n e d s h i p p i n g d e l ays a n d snagged supply chains could weigh on sales into the next financial year

Crypto trading volumes surged last year to rival some major currencies, a new report shows.

While last year was a breakout for crypto, 2022 has had a rougher start. Bitcoin is in a bear market and fell another 6.8% overnight to reach $46,163, its lowest level since September.