Monday, 28 January: It was a muted start to the new week in London as much focus turns to the parliamentary vote on PM May’s “new” Brexit policy tomorrow. The tone across major indices in Europe wasn’t too dissimilar as investors approached the temporarily suspended US shutdown with caution. This week’s Fed US Fed meeting, US jobs data and further US/China trade talks. Asian equity markets were mixed with the CSI 300 and Nikkei ending with contrasting results; +0.81% and -0.60% respectively, the latter impacted by a stronger yen.
Weaker Chinese economic data drove Asia market direction, with commodities and miners impacted on the main London index. A second consecutive month of China’s industrial profit falls demonstrated another sign of weakness in the world’s second largest economy. Profits of big Industrial companies in the region fell 1.9% year on year, following a 1.8% decline in November. The resulting fall in brent oil impacted FTSE 100 heavyweights BPO and Royal Dutch Shell (-2.37% and -1.83% respectively). A fall in copper prices impacted Antofagasta’s performance on the index, down 1.67% at the close. Brent oil dropped below $60/bbl towards the end of Monday’s play, although the commodity is on track for gains in the first month of 2019.
Ocado placed itself at the top of the blue chip index, where it remained for the duration following reports of a deal between M&S and the retailer. M&S look to be interested in buying some of Ocado’s distribution centres and delivery vehicles, giving the high-street retailer an online kick-start. It would mean M&S could reach a further geographic, where it is currently limited. Ocado held on to poll position to the very end of Monday trade, closing +2.07%, while M&S closed +0.10%. Staying in the food retail space, Tesco has come under scrutiny today after revealing up to 9,000 jobs could be at risk as the Supermarket giant plans to close fresh-food counters at 90 of its store. As part of the group’s turnaround plan, up to 50% of these employees could be redeployed to other customer-facing roles. The changes come as part of Tesco’s restructuring plan, which includes some head office changes.
At the close, major European indices were in the red. The FTSE 100 down 0.91% while the 250 closed 0.58% lower. The S&P and Dow Jones were both lower by >1% at the time of writing. The pound traded lower against the euro and US dollar as the EU’s deputy chief negotiator claimed it would be a challenge for May to get her deal through Parliament.