- FTSE 100 down 112 points
- Vectura excluded from pharmaceutical conferences
- UK government tackles energy price crisis
10:35 am: Vectura excluded from pharmaceutical conferences after Philip Morris takeover
The FTSE 100 extended their losses into the late morning, dropping 112 points to 6,851.
Former FTSE 250 member Vectura has been banned from pharmaceutical industry conferences after being acquired by cigarette maker Philip Morris International.
The Drug Delivery to the Lungs (DDL) conference ended its sponsorship and the Vectura representative resigned from the committee.
“In light of the recent acquisition of Vectura by PMI, the DDL committee has unfortunately decided that it can no longer accept Vectura’s support,” said a memo seen by The Times.
“The committee would like to stress that it recognizes and greatly appreciates the support provided in the past, and in particular the great contributions made on the ground by the scientists working within Vectura. However, DDL’s main goal is to support the science behind the pulmonary administration of drugs to treat respiratory disease and we do not wish to be associated with PMI and the tobacco industry.
The £ 1 billion takeover has sparked controversy as Vectura produces treatments for respiratory illnesses, which many health experts have deemed incompatible with membership in a tobacco producer.
9:30 am: UK government considers emergency loans to struggling energy suppliers
The FTSE 100 continued its descent mid-morning, dropping 103 points to 6,859.
Business Secretary Kwasi Kwarteng on Monday began crisis talks with energy companies to issue potential emergency loans to those at risk of collapse.
Small suppliers are struggling to deliver on prices promised to customers as wholesale gas prices skyrocket to record highs.
Four of them have retreated recently and more could follow as the UK grapples with power generation shortages.
The energy price cap is in place to protect millions of customers from sudden increases in global gas prices this winter.
Initiatives such as the hot house discount, winter fuel payments, and cold weather payments will help more (4/7)
– Kwasi Kwarteng (@KwasiKwarteng) September 19, 2021
“In the event of a supplier failure, Ofgem will ensure that gas and electricity supplies to customers continue uninterrupted,” Kwarteng tweeted on Sunday evening.
“If a supplier of last resort is not possible, a special administrator would be appointed by Ofgem and the government. The goal is to continue supplying customers until the business can be rescued or customers are transferred to new suppliers.
8:25 am: FTSE 100 hit by stagflation, gas and Chinese concerns
The FTSE 100 fell further amid global concerns about stagflation and local gas prices.
These could affect millions of households and thousands of businesses as well as the broader supply chain.
The strength of companies seen earlier in the year should also dissipate.
“With the third quarter reporting season getting closer and closer, it seems increasingly unlikely that companies will be able to match the strength shown in the previous quarter,” said Richard Hunter, head of markets at Interactive Investor.
“With economic data in the United States still painting a mixed picture, special attention will be paid this week to a whole series of central bank meetings, with the Federal Reserve leading the bill.
“While the reduction in its stimulus package is still expected to begin in November or December, it is likely that the Federal Reserve will have to revisit its current thinking on the state of the nation by setting a firmer timetable for reducing stimulus measures to appease increasingly cautious investors.
Miners have been hit hardest by less than veiled threats from China to restrict their power using “market tools.”
Anglo American (down 5%) led the losers early on, followed by Glencore (down 3.8%) and platinum specialist Johnson Matthew, who lost 3.4%. Anglo’s case was not helped by a demotion of Barclays Capital on an “equal weight” basis.
AstraZeneca, up 2.3%, benefited from the astonishing results of its latest breast cancer trial.
Rolls-Royce, meanwhile, resisted the generally downtrend to open up 2.5% as it continued to respond to a possible easing of UK restrictions on international travel.
FTSE 100 called lower
The FTSE 100 is unlikely to rise above the 7,000 mark on Monday, with spread betting companies suggesting it will open in the red.
In the absence of Tokyo and Shanghai, closed for public holidays, it is up to Hong Kong to set the scene for traders in London.
The Hang Seng fell 3% in a brutal first session after the weekend break amid concerns about stagflation – that cocktail of rising prices and sluggish economic growth.
While the signs are starting to emerge in the UK with sky-high gas costs and higher purchase bills, they are also apparent around the world.
Now economists and analysts are wondering when the US Federal Reserve will step in.
This question added relevance ahead of a federal open market rate-setting committee meeting on Wednesday.
Miners for a bashing?
Expect miners to be hit soon after Chinese Premier Li Keqiang said he would use “market tools” to stabilize commodity prices.
“I guess that means releasing more raw materials into domestic markets from China’s strategic reserves,” said Jeffrey Halley, analyst at OANDA.
“As a price taker, not a price maker, there is little that China can do to influence prices in the medium term.
“But coming on a day when liquidity is lower due to the holidays, markets are nervous about a messy collapse of Evergrande and US yields and the dollar have risen before the FOMC, there is a disproportionate impact. “
Evergrande, a Chinese real estate group, looked on the brink as its shares fell another 15% in Hong Kong on Monday.
Last week, hundreds of retail investors protested after management said it needed more time to pay interest and principal on debt bundled as high-yield investment products. Suppliers who weren’t paid also joined in the fun.
Around the markets
- Pound US $ 1.3710 (-0.23%)
- Bitcoin $ 45,757.24 (-4.55%)
- Gold $ 1,749.90 (flat)
- Crude Oil US $ 74.81 (-0.70%)
6:50 a.m .: Early Markets – Asia / Australia
The mainland China, Japan and South Korea stock exchanges are closed on Monday for holidays.
Hong Kong’s Hang Seng Index fell 3.24% as shares of struggling Chinese developer China Evergrande Group continued to decline.
World’s most indebted real estate developer, with liabilities of around US $ 300 billion, fell 15% as it faces huge cash flow problems and may not be able to meet its debts .
The Australian S & P / ASX200 fell 1.94% in the last hour of trading, with iron ore falling a further 4.9% to US $ 101.95 per tonne.