Supermarkets power FTSE 100 higher
A surge in supermarket shares has helped push the FTSE 100 higher, as Tesco jumped 5.5% and Sainsbury's added 3% after Morrisons reported much better than expected results for the Christmas trading period.
The BBC reports shares in Morrisons, which is a FTSE 250 stock, soared more than 10%.
Debenhams led the FTSE 250 higher with a 15% surge, after it also reported better than expected results. Overall the FTSE 100 was 24 points or 0.4% higher at 5,895.
Building firms were also among the leading shares, with Berkeley Group up 4.5% and Barratt Developments up 3.6%.
Analysts at Jefferies upgraded their rating of those shares to buy from hold.
Meanwhile, on the currency markets, the pound edged 0.1% lower against the dollar to $1.4527 and fell by 0.3% against the euro to €1.3354.
European Commission clamps down on Belgian multinational tax dodge
Ruling on the Belgian scheme will impact 35 global firms, including the beer giant AB Inbev.
Some 35 multinational companies will be forced to hand back €700m (£524m) in tax that they failed to pay under an outlawed Belgian “excess profit” tax scheme, as reported by The Independent.
The European Commission ruled yesterday that selective tax advantages granted by Belgium are illegal under EU state aid rules. The commission didn’t name any of the mainly European companies hit by the ruling, but reports suggested they included global brewer AB Inbev and British American Tobacco.
Other companies linked to the scandal included Atlas Copco, BP, BASF, Belgacom (now known as Proximus Group), Celio and Wabco.
Margrethe Vestager, the commissioner in charge of competition policy, said: “Belgium has given a select number of multinationals substantial tax advantages that break EU state aid rules. It distorts competition … by putting smaller competitors who are not multinational on an unequal footing.”
Virgin Money appoints new CFO and CCO
British 'challenger' bank Virgin Money unveiled two new senior hires from rival lenders as part of a plan to accelerate growth, reports Reuters.
The company, led by Jayne-Anne Gadhia, has recruited Tesco Bank Chief Financial Officer Peter Bole and Hugh Chater, the executive responsible for the commercial performance of core banking products and Retail Private Banking at RBS.
Bole is expected to join Virgin Money as CFO in 2017, while Chater will join as Chief Commercial Officer, responsible for the full range of Virgin Money products including credit cards, by June.
Subject to regulatory approval, both Bole and Chater will join the Virgin Money Executive Team and will report to Gadhia.
Oil on brink of falling through $30
Oil is coming under renewed pressure, as traders speculate about just how low the crude price will fall.
Crude prices tumbled by another 3% hitting fresh 12 year lows. It is being driven down by concerns over the world economy’s weakness which is fuelling the oversupply glut, reports The Guardian.
Brent, sourced from the North Sea, hit a low of $30.43 per barrel in early trading, before struggling back to $30.80.
Morgan Stanley analysts believe oil could hit $20 this year - and at this rate, it might happen sooner than crude producers would like.
Morrisons announces store closures despite Christmas sales rise
Morrisons is to close seven stores with the potential loss of nearly 700 jobs despite achieving a surprise increase in sales over Christmas.
Shares in the company soared 12% as the company revealed a much better-than-expected 0.2% rise in sales at established stores in the nine weeks to 3 January, its first positive figure for four years, as reported by The Guardian.
City analysts had expected like-for-like sales, which exclude the contribution from new stores or losses from store closures, to fall 2%.
The better-than-expected performance from Morrisons also lifted shares in other supermarkets with Sainsbury’s, which reports its Christmas trading figures up 4% and Tesco up 6%.
Morrisons said customers were starting to return to its stores with like-for-like transactions up 1.3% in its core supermarkets during the period. The chain has been badly hit by competition from the German discounters Aldi and Lidl and has cut prices to compete.