Sainsbury's to exit banking operations, JD Sports takes over Poland's MIG

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The FTSE 100 was expected to open four points lower on Thursday, having closed down 1.48% on Wednesday at 7,446.29.

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Sainsbury has announced a "phased withdrawal" from its banking operations as it continues to pursue its so-called 'Food First' strategy. The supermarket giant said that, following a strategic review of the Financial Services (FS) division, FS products will now be offered through dedicated FS providers through a distributed model, like it already does with its insurance products. "There will be no immediate changes to the products or services that we provide to customers as a result of this decision," the company said.

JD Sports Fashion said it had taken 100% control of Poland’s Marketing Investment Group after clearance from the European Commission. The retailer mopped up the 40% minority stake in MIG, giving it the opportunity to roll out its brand into Central and Eastern Europe. In the financial year to January 2023, MIG generated revenues of approximately £270m. As at 30 December 2023, MIG operated a total of 403 stores across 13 countries, including 23 JD stores.

Australia’s BHP Group said it may have to write down the value of its nickel operations after a price slump in the commodity. Prices fell last year after an increase in supply from Indonesia. Nickel is a key product used in manufacture of electric car batteries. In a second-quarter production update, BHP said it was studying options to mitigate the impact of the price fall, with more details expected at half year results on February 20.

Newspaper round-up

The housing market has had some “respite” in recent weeks as activity picked up amid easing mortgage rates after a challenging 2023, according to surveyors. Inquiries from new buyers are approaching a flatter trend, after falling in recent months, according to the December report from the Royal Institution of Chartered Surveyors (Rics). – Guardian

Concern is mounting that Tata Steel will confirm plans to shut down much of its production at the Port Talbot steelworks during a crunch meeting with trade unions, putting thousands of jobs at risk. Three sources said they believed that Tata, owned by the Indian billionaire Ruia brothers, was on the brink of confirming plans to close Port Talbot’s two blast furnaces, ending more than a century of making steel from scratch in south Wales. – Guardian

Electric cars lose as much as half of their value after just three years on the road, new figures show, as the rate of depreciation far outstrips conventional equivalents. Research from Auto Trader said there were “unsustainable levels of depreciation” in the electric car market, with used prices of battery-powered vehicles dropping by 23pc in the last year alone. – Telegraph

Chinese brands will launch a price war and will capture a sixth of the UK electric car market by 2030, according to Auto Trader. With BYD, China’s largest electric car manufacturer, having overtaken Tesla as the world leader in zero-emission vehicles and with Shanghai Automotive’s MG brand already out-selling Volkswagen and BMW in the segment in Britain, a new order is coming, according to the online car-buying platform’s latest The Road to 2030 report. – The Times

Britons doubled their spending on bowling in December compared with the same month a year ago, according to Lloyds Bank. People also spent more on booking holidays last month, with demand for cruises up by more than a quarter compared with December 2022, the high street lender said. – The Times

US close

US stocks fell on Wednesday as bond yields rose on the back of resilient economic data, with central bankers in both the States and Europe doing their best to temper expectations for imminent cuts to interest rates.

Stronger-than-expected retail sales, mortgage applications and housing market data hit government bonds and “diminished the urgency for the Federal Reserve to initiate a policy rate cut as early as March”, said Stephen Innes, managing partner at SPI Asset Management.

The 10-year US bond yield was up 4.1 basis points at 4.108%, touching a high of 4.133% earlier in the session – its highest level in over a month.

The Dow declined for the third straight day, falling 0.3%, while the S&P 500 and Nasdaq both dropped 0.6%.

Tuesday’s comments from Fed governor Christopher Waller were continuing to weigh on investors’ minds, after he said that he saw “no reason to move as quickly or cut as rapidly as in the past” in response to recent declines in inflation.