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MARKET WRAP: FTSE finishes flat, GBP/USD higher, Oil falls

Economy1 hour ago (Nov 15, 2021 16:36)

© Reuters.

Key Points

FTSE 100 closing price of 7,352.85, +0.07%
Shell shares higher on plans to scrap dual listing
Cineworld gains as revenue recovers
GBP/USD rises after hitting yearly low
Oil falls as COVID cases creep up, US considering measures to boost supply
Major cryptocurrencies steady after Bitcoin network update

By Samuel Indyk – The FTSE 100 was broadly unchanged on Monday as a decline in shares of miners countered gains in shares of Royal Dutch Shell (LON:RDSa).

Shares were higher after the oil major announced plans to scrap its dual listing and move its UK tax residence from the Netherlands to the UK. The company said the creation of a larger, single pool of ordinary shares will make it easier to speed up share repurchases.

“Welcome news Shell is proposing to relocate its Group HQ to the United Kingdom as part of their plans to accelerate the transition to clean energy,” UK Business and Energy Minister Kwasi Kwarteng said on Twitter (NYSE:TWTR). “A clear vote of confidence in the British economy as we work to strengthen competitiveness, attract investment and create jobs.”

Cineworld (LON:CINE) shares were also trading higher following a trading update. The cinema chain operator said that UK and Ireland revenue in October was above the same period in 2019, driven by an “excellent slate of movies”, which included the James Bond film No Time to Die and the Marvel film Black Widow. Group revenue in October recovered to 90% of 2019 levels.

B&M (LON:BMEB) was one of the underperformers in the UK after receiving share downgrades from both RBC and Goldman Sachs (NYSE:GS). The US investment bank also lowered its price target on the shares saying that the current disrupted supply chain and elevated input costs will drive flat earnings growth for the retailer through fiscal 2025.

GBP/USD showed signs of recovering as Bank of England policymakers answered questions from MPs on the latest monetary policy decisions. Governor Bailey said he was “very uneasy” about inflation, despite voting to keep interest rates unchanged at the November meeting.

“It is not of course where we wanted to be, to have inflation above target,” Bailey said. “On the decision itself, however, it was a very close call in my view.”

Bailey added that all meetings are “in play”, suggesting that it is too early to write off the chance of an interest rate increase next month.

WTI and Brent Oil Futures were again trading lower, with the former trading at its lowest level since November 4th. Prospects of a release of oil from the US Strategic Petroleum Reserve continues to weigh on prices. Speaking to CNN, US Energy Secretary Jennifer Granholm said that Biden is evaluating a release from the SPR amid high gasoline prices.

There remain fears that the current COVID wave impacting Europe could also dampen oil demand throughout the winter months in the Northern Hemisphere. Over the weekend, Austria and the Netherlands both announced new restrictions while German COVID cases are now at a record high.

Bitcoin and other major cryptocurrencies were mostly steady after Bitcoin’s Taproot update was activated at the weekend. The network upgrade is expected to improve the privacy, security and scalability of transactions on the network.


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MARKET WRAP: FTSE finishes flat, GBP/USD higher, Oil falls

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