Wall Street inflation fear pushes FTSE into the red
Goods redistributor adds to waste group’s standing
THE FTSE 100 was dragged into negative territory at the end of trading after US data raised inflation fears while government borrowing costs also increased in Europe.
Wall Street opened lower and weighed on trader sentiment in London after better-thanexpected jobless figures and durable goods orders.
The positive economic data unnerved some investors who are concerned that it could mean inflation will start to tick up and prompt tighter monetary policy.
London’s top flight closed 7.01 points, or 0.11 per cent, lower at 6,651.96 at the close of play on Thursday.
Across the continent, the other major markets were also cautious and tumbled into the red late in the session.
The German Dax was 0.54 per cent lower and the French Cac moved 0.24 per cent lower.
Michael Hewson, chief market analyst at CMC Markets UK, said: “European markets have once again flattered to deceive today, starting off in promising fashion, before slipping back into the close, with US markets, and rising bond yields acting as a little bit of a drag.
“While rising US yields have been attracting the most attention, we’re also seeing some evidence of a tightening of financial conditions here in Europe, with sharp rises in government borrowing costs from Germany to Greece.
“The European Central Bank certainly appears to be becoming concerned about just such a scenario with chief economist Philip Lane saying that the ECB is prepared to buy bonds flexibly in order to prevent just such a fiscal tightening.”
Meanwhile, sterling recoiled after hitting an almost three-year high against the dollar on Wednesday.
The pound decreased by 0.3 per cent versus the US dollar to 1.410 and was down 0.75 per cent against the euro at 1.153.
In company news, Standard Chartered was one of the day’s biggest fallers after it revealed that its profits were cut by more than half.
The Asia-focused bank saw pre-tax profits tumble 57 per cent to 1.6b US dollars (£1.1b) in 2020 after it booked a major charge due to loan losses related to the pandemic.
Shares in Standard Chartered fell by 31.4p to 478p at the close of trading.
DS Smith was sat high at the opposite end of the FTSE amid speculation that the packaging giant could be the target of a takeover offer from rival Mondi.
Shares in the company closed 21.9p higher at 405.9p after Bloomberg reported on the interest from Mondi, which dipped in value as investors digested the coverage.
Aston Martin’s shares jumped despite the luxury car manufacturer posting a slump in annual sales and profits, as its latest revenue figures came in ahead of expectations.
Shares climbed by 136p to 2,137p as a result.
The price of oil jumped to a 13-month high earlier on Thursday before losing steam to sit broadly flat after general trading sentiment took a downturn.
The price of Brent crude oil decreased by 0.03 per cent to 66.99 dollars per barrel.
The biggest risers on the FTSE 100 were Evraz, up 33.6p to 598.4p, DS Smith, up 21.9p to 405.9p, Anglo American, up 112p to 2953.5p, Rio Tinto, up 125p to 6480p, and BP, up 5.75p to 304.55p.
The biggest fallers on the FTSE 100 were Standard Chartered, down 31.4p to 478p, Intermediate Capital Group, down 90p to 1811p, Polymetal, down 54.5p to 1452p, Persimmon, down 93p to 2671p,
and Berkeley, down 145p to 4172p.
WASTE MANAGEMENT firm Biffa has acquired Barnsley-based surplus food and household products redistributor Company Shop in a deal worth an initial £82.5m.
Company Shop prevents waste by identifying surplus produce and then collecting, processing and redistributing it for sale through its unique network of membership-based outlets.
Surplus produce includes production overruns, trial products, or produce that has been incorrectly labelled or packaged, which would usually go to waste.
Michael Topham, chief executive of Biffa, said: “The acquisition of Company Shop Group strengthens Biffa’s leadership position in the UK circular economy.
“Its redistribution services complement Biffa’s established waste and recycling services, and supply of closed loop recycled raw materials.
“As the only commercial redistributor of scale in the UK, Company Shop Group is the marketleader in a growing sector, with a strong, credible growth plan which we will deliver together.
“Biffa and Company Shop Group share a common set of goals, including the continued development of profitable, sustainable waste management solutions while making a meaningful contribution to society.
“We welcome all of Company Shop Group’s members, partners and staff to Biffa and look forward to the next stage of the business’s development.”
The deal has been funded from existing committed debt facilities and is expected to be immediately earnings enhancing on completion.
John Marren, founder of Company Shop, said: “Our aligned values and shared ambition will enable both the delivery of a truly unique circular economy proposition to industry alongside continued growth in the important role that sustainable redistribution plays.
“I am proud that this decision will enable Company Shop Group to step confidently into the future, as part of the global movement to reduce waste in our industry and our society.
“Today, more than ever, we are called to address the climate emergency, build our economy and support our communities.”
Company Shop was advised on the deal by a multi-disciplinary team at KPMG.
Christian Mayo, who leads the firm’s corporate finance practice in Yorkshire, said: “Company Shop has led the way in reducing food waste in the UK.”
Company Shop was also advised by Walker Morris and CIL.
We are called to address the climate emergency... John Marren, founder of Barnsley-based Company Shop