Markets in Asia were broadly in bull mode for the first trading day of the year: the Hang Seng and Shanghai bourses surged +1.8% and 1.1%. On the Hang Seng, Sunny Optical Tech Group was up more than +10% while AAC Technologies climbed +7.6%. Chinese markets were lifted by a boost in the Caixin-Markit manufacturing PMI index which came in at 51.5 in December compared to November’s 50.8 score. Japan was closed for a national holiday.
Either way, the Asian optimism points to a further FTSE 100 lift today, extending its record year-end. Sterling edged higher through the night, up +0.2% to 1.3520 while the euro was up +0.14% against the pound to 0.8894 and +0.32% against the yen at 135.54. Overall, the spot dollar price slipped -0.15% to 92.09.
Today, authorities will start to probe the tragedy of the Australian seaplane crash that killed the chief exectutive of Compass Group, Richard Cousins, 58, and several family members on New Year’s Eve. Cousins was due to stand down on 1 April. Dominic Blakemore takes over the role early. Compass shares have climbed almost +120% since 2013.
Meanwhile UK commuters face an average +3.4% rail fair price rise today though increasingly there are calls for future price hikes to be linked to the lower Consumer Price Index rather than the Retail Price Index. Many protests are planned today. UK manufacturing PMI numbers emerge at 8.30am plus a rash of eurozone manufacturing PMIs also.
IAG formalises NIKI buy-out
British Airways owner IAG moved ahead this morning on the assets of Austrian airline NIKI, originally part of Air Berlin. IAG is paying €20m. The move will absorbed into IAG’s Vueling arm including 15 A320 aircraft and slots at Dusseldorf, Vienna, Munich and Palma.
NIKI was the most financially viable part of Air Berlin; its focus on leisure means it's a strong fit for Vueling IAG boss Willie Walsh claims. “This deal will enable Vueling to increase its presence in Austria, Germany and Switzerland and provide the region's consumers with more choice of low cost air travel.”
Oil prices surge again
Elsewhere Brent Crude has continued to lift, up +0.3% earlier to almost $67.10 a barrel though that follows an $67.27 intraday high. Both the US West Texas Intermediate (WTI) and Brent crude oil bench marks opened at more than $60 per barrel – the first time since early 2014 – helped by rising domestic unease in Iran.
The wider backdrop is continuing global economic growth and OPEC-supported production cuts not to mention outages from Libya through to the North Sea. However there remains rising oil production from the US.
But 2017 was a strong year for renewables, particularly offshore wind power. In September in the UK energy from offshore wind became cheaper to source than from nuclear power stations. “Record-breaking cost reductions like the ones achieved by offshore wind are unprecedented for large energy infrastructure,” RenewableUK’s Hugh McNeal told Oilprice.com.
Breaking news: The Co-op says it will create 100 new food stores meaning 1,600 extra jobs this year. 20 new stores will open in London. The Halifax says Brighton, Cheltenham and Bournemouth saw the biggest percentage house price climbs in 2017.