FTSE 100 Live 25 November: Europe’s Covid-19 lockdown restrictions, Covid-19 market reaction, oil prices, Wall Street closed, Mitchells & Butlers results
urope’s battle to contain a fourth wave of Covid-19 will be the main focus for investors today as more countries appear ready to ramp up restrictions.
Shares in airlines and other leisure stocks have struggled this week amid the renewed uncertainty, leading to mixed trading for the FTSE 100 index and Europe’s main benchmarks.
Wall Street is closed for the Thankgiving holiday, meaning trading volumes in London will be lighter than usual today. Annual results from pubs chain Mitchells & Butlers provide the main corporate highlight.
Wendy’s plans UK expansion
US burger chain Wendy’s wants to open another 50 UK sites following the success of its recent return to this country.
The fast-food chain also has eyes on moving into France, Germany and Spain.
Having left the UK in 1999, Wendy’s returned recently with restaurants in Reading, Stratford, Oxford, Croydon and Romford. It also opened five dark kitchens to offer deliveries on food platforms including Deliveroo and Uber Eats.
Abigail Pringle, Wendy’s chief development officer, said sales have proven so popular the company intends to expand further.
She said: “We have seen incredible success that outperformed our expectations, and it’s clear to us that customers are loving our fresh, high-quality food.”
New locations planned for 2022 include Brighton, the Midlands and discussions are ongoing with franchise partners in Scotland, Wales, Northern Ireland and the Republic of Ireland.
Hochschild Mining rebounds, Vodafone lower
Markets in Europe are struggling for momentum as investors worry about the potential for renewed Covid-19 lockdown restrictions.
Germany’s consumer sentiment index highlighted these concerns after the latest reading fell by more than expected to its lowest level since June.
The FTSE 100 index was broadly unchanged at 7,290, with trading volumes lighter than usual due to the Thanksgiving holiday in the US.
Vodafone was the biggest faller in the top flight, declining 3% after its shares began trading without the right to the interim dividend announced two weeks ago.
There was more for investors to see in the FTSE 250 index, where Hochschild Mining rebounded 20% after Peru’s government clarified its position on potential mine closures. Africa’s Vivo Energy also rose by more than a fifth after backing a takeover offer.
Vivo Energy backs £1.7bn takeover
FTSE 250-listed Vivo Energy, which sells Shell and Engen branded fuels and lubricants in Africa, is set to be taken over after backing a deal worth $2.3 billion (£1.7 billion).
Energy trader Vitol owns 36% of Vivo and has secured support from fellow founding shareholder, the private equity firm Helios, for the proposal worth a 25% premium to last night’s price.
Vitol, which made its first takeover approach in February, set up Vivo Energy with Shell and Helios in 2011. Since then, the business has grown its network of service stations to more than 2,400 and also exports lubricants to a number of African countries.
It generated revenues of $8.3 billion (£6.2 billion) and profits of $246 million (£184 million) in the year before the pandemic.
Vitol’s operations include more than 480,000 barrels a day of refining capacity, while it also owns or markets to approximately 6,500 retail service stations.
Chris Bake, its head of origination, said: “Since we founded Vivo with Helios and Shell, we have believed in the business’ potential and we are excited to have it within the Vitol family, as a pillar of our strategy in Africa.”
Fed minutes reveal inflation anxiety
The FTSE 100 index is forecast to open 15 points higher at 7301, having closed up yesterday for the third session in a row.
The performance was helped by resilience in the energy sector after oil prices traded near to one-week highs, while defensive telecom and utilities were in demand amid fears over the economic impact of potential further lockown measures in Europe.
Cyclical plays such as leisure and automotive stocks continued their recent decline.
Wall Street finished on the front foot last night before traders headed off for the Thanksgiving holiday. The tech-laden Nasdaq, which was under pressure earlier this week due to fears of higher US interest rates, finished 0.4% stronger.
Last night’s minutes from the US Federal Reserve showed that policymakers appear increasingly anxious about rising prices and their effect on the US economy, with some aruging for a faster taper than the $15 billion a month agreed earlier two week ago.
Michael Hewson, chief markets analyst at CMC Market, said: “Over the last two meetings there seems to be much less confidence that what we are seeing is transitory in nature.”
The US dollar rallied overnight to leave the pound at $1.33 versus the greenback.
Brent crude, meanwhile, continues to trade above $82 a barrel after an initiative by major oil consuming nations to release some of their strategic reserves failed to put downward pressure on prices.