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(Alliance News) - The following is a summary of top news stories Tuesday.
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COMPANIES
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France's competition regulator slapped Alphabet's Google with a EUR500 million fine for failing to negotiate "in good faith" with media companies over the use of their content under EU copyright rules. In a ruling published on its website, the Competition Authority also ordered Google to present media publishers with "an offer of remuneration for the current use of their copyrighted content", or risk paying additional damages of up to EUR900,000 a day.
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The Bank of England removed restrictions on large UK banks paying dividends, saying they are well-capitalised and that Covid vaccination programmes have reduced economic uncertainty. The central bank's Prudential Regulation Authority said the restrictions are "no longer necessary and have been removed with immediate effect." The rules affected Barclays, HSBC Holdings, Lloyds Banking, NatWest and Standard Chartered, as well as the UK arm of Banco Santander. Saying they are no longer necessary, the BoE said banks remain "well-capitalised and resilient to outcomes for the economy that are much more severe than the Monetary Policy Committee's central forecast," and can therefore "support households and businesses through the economic recovery".
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Property investor British Land posted what it called a strong operational performance for the quarter that ended June 24, with 183,000 square feet campus lettings. Across the company's Retail portfolio, footfall and sales reached 86% and 94% of pre-pandemic levels in the seven weeks since the reopening of indoor hospitality on May 17. British Land also noted that 85% of June rent - totalling GBP87 million - was collected to date. This compares to 72% of the total amount collected at the same point following the December quarter-end and 76% following the March quarter-end. "With lockdown restrictions lifting, we have seen a notable improvement in activity across our markets and our business is performing well," said Chief Executive Simon Carter.
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Phoenix Group has agreed to sell Ark Life Assurance to Irish Life Group for EUR230 million in cash. The completion of this transaction is expected by early 2022. The insurer said the disposal simplifies its European operations and accelerates the cash release from this business. The company expects to redeploy the capital into higher return growth opportunities "to drive incremental future cash generation".
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German carmaker Volkswagen is presenting a new group strategy on Tuesday, amid expectations that its 'New Auto' concept will sharpen the company's focus on the key issues of digitalization and services. Europe's largest automotive group has already planned investments worth double-digit billion figures to expand its range of electric and hybrid models, as well as developing its own battery cell production. The industry is also increasingly focusing on software to network vehicles and the development of new mobility-related services. The overall orientation, aimed at shaping Germany's largest corporation until 2030, is the brainchild of group chief executive Herbert Diess. His contract, ending in early 2023, was recently replaced with a new one set to run until October 2025.
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The US Food & Drug Administration updated its warning labels for the Johnson & Johnson Covid-19 vaccine to include information about an observed "increased risk" of a rare neurological disorder. The news is a further blow for the shot, which was granted an emergency use authorization in February but has played a minor role in America's immunization campaign. Based on analysis of a federal vaccine safety monitoring system, officials have identified 100 preliminary reports of Guillain-Barre Syndrome after approximately 12.5 million doses administered, people familiar with the matter said. Of these reports, 95 of them were serious and required hospitalization. There was one reported death.
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MARKETS
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Stock prices were mixed amid a series of inflation readings for June, with the US consumer price index due at 1230 GMT. UK bank stocks got a lift after the Bank of England removed restrictions on dividend payments and stock buybacks. Lloyds Banking was the best performer among the FTSE 100 banks, up 1.5%. HSBC was up 0.6% and NatWest and Standard Chartered both up 0.3%. Barclays was down 0.1%, but Rob Burgeman, senior investment manager at Brewin Dolphin, said Barclays is in a particularly strong position compared to peers, citing its "relatively well diversified business and its investment banking operation benefiting from exposure to volatile markets". He added: "With greater exposure to the UK economy than perhaps any other major bank, Lloyds may also ride the wave of recovery."
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CAC 40: down 0.2% at 6,547.89
DAX 30: down 0.1% at 15,780.12
FTSE 100: up 0.2% at 7,136.65
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Hang Seng: closed up 1.6% at 27,963.41
Nikkei 225: closed up 0.5% at 28,718.24
S&P/ASX 200: closed marginally lower, down 1.40 points at 7,332.10
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DJIA: called marginally lower, down 13.00 points
S&P 500: called marginally lower, down 0.25 point
Nasdaq Composite: called up 0.2%
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EUR: down at USD1.1850 (USD1.1861)
GBP: down at USD1.3861 (USD1.3881)
USD: flat at JPY110.35 (JPY110.33)
Gold: up at USD1,808.93 per ounce (USD1,803.57)
Oil (Brent): up at USD75.80 a barrel (USD75.00)
(currency and commodities changes since previous London equities close)
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ECONOMICS AND GENERAL
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Oil demand surged last month as rising vaccination rates helped underpin robust economic activity, but with OPEC+ nations pumping less than needed, prices are set to be volatile until it reaches a deal to raise output, the International Energy Agency warned. A meeting of OPEC+ nations earlier this month was deadlocked over plans to gradually ease production cuts, imposed to reverse the plunge in oil prices at the start of the coronavirus pandemic as demand tumbled. But demand is rebounding, with the International Energy Agency estimating it surged by an estimated 3.2 million barrels per day last month, which is more than a third of the overall drop in demand last year. The IEA expects oil demand to rise by another 3.3 mbd in the three months from July. That is more than twice as large as the seasonal increase registered during the same period in 2019.
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The recovery in key areas of the US economy is not sufficient for the Federal Reserve to start pulling back on its aggressive stimulus program, a top central banker said Monday. While the Fed has begun to consider when to taper its massive bond-buying program, New York Fed President John Williams told reporters the economy has not made the "substantial progress" required for it to act.
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The inflation rate in Germany slowed slightly in June as the surge in energy prices slowed, figures from the Federal Statistics Office showed. The inflation rate in Germany, measured as the year-on-year change in the consumer price index, stood at 2.3% in June. Following a continuous rise reported since the beginning of 2021, the inflation rate has slightly slowed in June after standing at 2.5% in May. Destatis said consumer prices were up 0.4% in June month-on-month. Energy product prices rose 9.4% compared with a year earlier, considerably higher than the overall inflation rate, after rising by 10% in May.
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Consumer prices in France continued to grow in June but at a slower pace than the month before, figures from Insee showed. In June, the French consumer price index rose by 0.1% from May, after growing by 0.3% in May from April. Year-on-year, consumer prices rose by 1.5% in June, after advancing by 1.4% in May. Prices of manufactured goods rose 0.7% in June on a year ago after decreasing by 0.1% in May. In June, the harmonised index of consumer prices for France, which is calculated for EU-wide comparison, was 1.9% above the level of the prior year. By the harmonised measure, prices were up 0.2% month-on-month.
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China's exports spiked more than expected in June as countries around the world pushed towards a pandemic recovery, official data showed, while imports spiked on the back of rising commodity costs. Shipments overseas surged 32% year-on-year last month, the Customs Administration said, much better than the 23% forecast and also well up from May. Imports also exceeded expectations, rising 37% as the cost of key commodities such as iron ore, oil and copper surge. However, growth was below the more than 50% jump seen in May, which was the fastest in more than a decade.
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There was an increase in UK retail sales in June when compared to Covid-free times, numbers on Tuesday showed, as the gradual unlocking of the UK economy encouraged a release of pent-up demand. According to the British Retail Consortium, UK retail sales rose by just over 13% in the period from May 30 to July 3 from two years earlier. On a like-for-like basis, UK retail sales increased 17% from June 2019. For the second quarter of 2021, UK retail sales were up 10% from two years before and up 6.7% on a like-for-like basis. When compared with the second quarter of 2020, UK retail sales grew by 28%.
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Italy, Germany and Poland are among the destinations most likely to be added to the UK government's green travel list, according to an analyst. Robert Boyle, former director of strategy at British Airways-parent IAG, predicted that 12 countries could be put in the low-risk tier this week. He wrote on his website www.gridpoint.consulting that this includes nine European countries which are all "strong candidates", consisting of Austria, Bulgaria, Germany, Italy, Latvia, Lithuania, Poland, Slovakia and Switzerland. The UK government's travel lists are expected to be updated on Thursday. People arriving in the UK from green list destinations are not required to self-isolate. Those travelling from an amber location must self-isolate at home for 10 days, although that requirement will be lifted on Monday for people arriving in England who have received both doses of a coronavirus vaccine in the UK, or are under 18 years old.
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By Tom Waite; thomaslwaite@alliancenews.com
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