Good morning: Chinese stock markets have fallen sharply overnight for the third consecutive session as surging coronavirus cases threatened to dampen growth.
The Shanghai Composite closed down 5 per cent at 3,063.96 this morning. A short while ago the Hang Seng Index was trading down 5.6 per cent at 18,422.40 points.
Oil has fallen amid fears of an economic downturn in China, the world’s second-largest economy. A short while ago Brent crude was trading at $100.39 a barrel, down 6 per cent over the session. The FTSE 100 is forecast to open 60 points lower.
“China’s economy could be severely hit again,” analysts at Nomura wrote in a note to clients. “With the much-worsening pandemic and Beijing’s resolution in maintaining its zero-Covid strategy, we believe China’s ‘around 5.5 per cent’ gross domestic product growth target this year is becoming increasingly unrealistic.”
New cases in China more than doubled from a day earlier to a two-year high as a virus outbreak expanded rapidly in the country’s northeast. Reuters reported that in the financial hub of Shanghai, authorities battling an outbreak across the city were cordoning off individual apartment buildings and testing all residents.
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A sharp rise in the number of vacancies to a record 1.31 million in February - an increase of 105,000 from the previous quarter - provides further evidence of the extraordinarily tight UK labour market.
Yael Selfin, chief Economist at KPMG, said: “We are starting to see the limits to which vacancies can be filled by those re-entering the labour market ... that could lead to enduring staff shortages if demand remains strong.”
The official data, released this morning by the Office for National Statistics, also shows that:
• Employers added 275,000 staff to payrolls in February, taking the total number of employees to a record 29.7 million.
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• Average weekly earnings rose by a larger than expected 4.8 per cent in the three months to January.
• Headline unemployment slipped to 3.9 per cent in the three months to the end of January, down from 4.1 per cent, and a sharper fall than economists had predicted.
We’ll have a full story shortly from Mehreen Khan, our economics editor, on thetimes.co.uk.
On the corporate front this morning:
IMPERIAL BRANDS: The tobacco giant has warned shareholders that the withdrawal from Russia will have a small impact on annual profit. It now expects full-year net revenue growth of about 0-1 per cent. City analysts had been forecasting 1-2 per cent growth.
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“We have begun negotiations with a local third party about a transfer of our Russian assets and operations. We believe that, in the current circumstances, an orderly transfer of our business as a going concern would be in the best interests of our Russian colleagues,” Imperial stated.
OCADO: The retailer and technology group has struck a partnership with Auchan Retail in Poland to provide its online delivery technology.
INFORMA: The world’s largest exhibitions group swung back into the black in 2021 reporting pre-tax profits of £93.8 million. In 2020 the group posted a loss of £881.6 million as it was hit by Covid-19 restrictions. Revenue over the period rose 8.3 per cent to £1.79 billion.
TP ICAP: The interdealer broker reported an 81 per cent fall in profit as market volatility eased from the frenzy of 2020 Pre-tax profit fell to £24 million in 2021, down from £129 million in 2020.
FERGUSON: Operating profit at the FTSE 100-listed US plumbing and heating supplier rose 74 per cent to £555 million in the three months to the end of January
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Others updating this morning include Close Brothers, the banking and securities trading group, DFS Furniture, the sofa retailer, and Virgin Wines.
MPs on the business, energy and industrial strategy select committee will quiz bank bosses on how fraudulent Covid-19 loans can be recovered. The session kicks off with evidence from Lord Agnew of Oulton, the government minister who quit over the government’s handling of multibillion-pound losses to criminals.
He is followed by Patrick Magee, chief commercial officer at the British Business Bank, and senior executives from Barclays, NatWest, Santander, HSBC and Lloyds will also be quizzed.
Is the suit dead? A switch to casual clothing since the start of the pandemic has become so pronounced that men’s suits have fallen out of the official “basket of goods” used by the ONS to track inflation. Other changes include the introduction of pet collars, sports bras and meat-free sausages. Ashley Armstrong has more here.
Finally, for those of you heading to Cheltenham for the first day of the festival, our resident business team tipster (and industrial editor) Robert Lea recommends an each-way bet on Heaven Help Us in the 4.10 Mares Hurdle.
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Please do keep sending your thoughts and observations to me at richard.fletcher@thetimes.co.uk.
