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Summary

  1. Pound and shares make strong gains ahead of EU referendum this week
  2. FTSE 100 led higher by banking and housebuilder stocks
  3. Premier League and UK car industry back Remain vote

Live Reporting

By Rebecca Marston

All times stated are UK

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Wall Street joins global rally

US stocks scored solid gains, joining a global equity rally in shares. At the closing bell, the Dow Jones was at 17,806.82 points, up 0.7%, and the broad-based S&P 500 rose 0.6% to 2,083.48. The tech-rich Nasdaq gained 0.8% to 4,837.44. 

Earlier European stock markets jumped, with the FTSE 100 ending up 3%.

HBOS report 'delayed again'

The Daily Telegraph is reporting that a report into failed bank HBOS's accounts has been delayed again. 

The paper says that MPs have already complained that the Financial Reporting Council missed chances to investigate in the years since the bank’s failure, and will now have to wait even longer than expected to hear back on the state of the lender’s finances.  

Diesel cars may be more expensive - VW

Demo at VW offices
Getty Images

Volkswagen's chief executive has told German daily Handelsblatt that stricter standards will make diesel engines more expensive in the future, and could affect the carmaker's investments in the technology  

The paper quotes Matthias Mueller as saying tougher emissions regulations in 2020 and beyond in the US will likely make the technology "enormously expensive" while electric technology is getting cheaper.

Aston Martin boss says Brexit could make 'exports more competitive'

Aston Martin sign
Getty Images

The car company best known for having James Bond at the wheel has sent a note to employers saying that Brexit could make "exports more competitive," according to Sky News.

The broadcaster says that chief executive Andy Palmer told workers in his message that while "an exit from the EU would [be likely to] have a negative effect on UK GDP growth in the near term... the impact of that slowdown in growth on Aston Martin is likely to be offset in part by the depreciation in the Pound, making our exports more competitive".  

That comes in contrast to most other car makers, many of whom have voiced support for remain.

Earlier today, the car industry trade body, the Society of Motor Manufacturers and Traders' (SMMT), warned that leaving the EU would increase costs and threaten jobs.  

Bayer 'sorry' for vegetarian tweet

Bayer's crop science division has apologised for a tweet that suggested reduced meat demand could benefit the environment. Farmers were outraged by the tweet - to an article that suggested going vegetarian would cut your carbon footprint. The tweet was published on the official Bayer Crop Science (@Bayer4crops) account on Sunday. 

Cows
Bayer

Nigerian interest rates jump

Nigeria's interbank overnight rate has leapt to 15% from 2%, after the central bank debited the accounts of commercial lenders to cover hard-currency purchases, traders said. The central bank earlier auctioned $532m on the interbank market after floating the naira. Technical, but important to note. 

US dollar slips v euro

The US markets have lost some of the gains made at the open. The Dow Jones is now up 1% - compared with 1.4% at the open. It stands at 17865.82 points. The Nasdaq and the S&P are higher by similar amounts. The dollar is down about 0.3% of a cent against the euro at  €0.88370. 

Wimbledon marketing

BHS: Sir Philip and pensions - more

Another document reveals how Dominic Chappell was warned about the risks of taking on the BHS schemes, along with their ballooning deficit, just days ahead of the sale.

Olswang, the legal firm advising Mr Chappell, told him that discussions had been taking place between the Pension Regulator, the trustees of the BHS pension schemes and Sir Philip Green, who had relayed to them that some form of agreement had been reached. Olswang had been unable to " verify anything" because it had no direct access to involved parties.

But the firm highlighted concern from the trustees who viewed the proposed deal as "materially detrimental" to the pension schemes.

MPs will likely want to know whether the trustees expressed this view to Sir Philip and his Arcadia group as well.

The fate of the BHS pension scheme and its £571m pension deficit is at the heart of this inquiry. MPs are trying to establish the circumstances surrounding the sale, including whether Sir Philip sold it Mr Chappell, a former racing driver and bankrupt with no retail experience, in order to duck his financial obligations to BHS's 20,000 pensioners, who now face reduced incomes in retirement.

Walmart selling China business

More on that deal between Walmart and China's JD.com.

The two companies have agreed to cooperate in several areas, including: 

  • JD.com will take ownership of the Yihaodian marketplace platform assets, including the Yihaodian brand, website and app. Walmart will continue to operate the Yihaodian direct sales business and will be a seller on its marketplace. JD.com  and Walmart  will  work  together  on  growing  the  Yihaodian brand  and  business  under  its  current  name  and  market position. 
  • Sam’s  Club  China will  open  a  flagship  store  on  JD.com, vastly expanding  the  availability  of  Sam’s  Club’s  high-quality  imported  products  across  China.  It  will  offer  same- and  next-day  delivery  through  JD.com’s delivery network, which covers a population of 600 million consumers. 
  • Walmart  and  JD.com  will  work  together  to  leverage  their supply  chains  to increase  the  product  selection  for customers  across  China,  including broadening the range of imported products.

Walmart selling China business

The US retail giant Walmart is selling its online Chinese business, Yihaodian, to JD.com, the country's second largest retailer after Alibaba.

Under the terms of the deal, JD.com will issue about 145 million new class A shares to Wal-Mart, representing about 5% of its total shares.

Walmart took a stake in Yihaodian, which caters to affluent female customers, in 2011 before taking full ownership in July 2015.

"We thank the Yihaodian associates for creating a strong brand and business that has helped lead to this opportunity with JD.com," said Doug McMillom, president and chief executive of Walmart.  

US market update

A strong rally on the US markets.

The Dow Jones is up 1.1%, nearly 200 points, at 17,873.76

The Nasdaq has jumped 1.5%, or 70.4 points to 4,870.78

The S&P has gained 1.1%, or 22.78 points, to 2,094.00

Analysts said markets were likely to be volatile ahead of the UK's referendum on whether to stay in the EU on Thursday.

"If I had a seatbelt while watching the markets, I'd put it on," said Kim Forrest, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh. 

Nigeria's currency plummets

Nigeria's naira has plummeted by 40% in its first day of free floating. Nigeria's government last week allowed the currency to float. Nigeria had pegged the naira to the dollar at 197-199 since March 2015, even as other oil exporters let their currencies devalue in the wake of plummeting global crude prices, but limited access to foreign currency strangled imports and growth. 

Not often we get to use the word "plummet" for a market move without stretching a point - this makes the grade.

Naira
Getty Images

BHS: Sir Philip revised down pension offer

Sir Philip Green kept revising down what he would pay into the BHS pension schemes as a sale of the business was being negotiated, new documents reveal.

MPs on the Work and Pensions Select Committee and the Business Innovation and Skills Committee have published a further tranche of written evidence into their inquiry on the collapse of the high street chain.

They include successive drafts of the terms and conditions to be agreed between Sir Philip Green, the former owner of BHS and Dominic Chappell, who went on to buy the business for a pound.

On the first draft, Sir Philip agreed a £50m "war chest" to meet the annual pension fund contributions for three years. The money would also be used to help the annual levy to the Pension Protection Fund or to help fund a potential restructuring of the pension schemes.

By the time of the final draft, his promised contributions had been revised down to £5m a year for three years.

Sir Philip Green
Getty Images

VW responds to boss probe

The new probe by German prosecutors against former Volkswagen chief Martin Winterkorn and another senior executive does not provide fresh facts that indicate a possible severe neglect of duty by the accused managers, VW said. The prosecutor's office in Braunschweig near Volkswagen's (VW) Wolfsburg headquarters said earlier on Monday that the probe centered on "sufficient real signs" that VW could have had a reason to disclose the financial consequences of its emissions scandal prior to VW's admission on Sept. 22, 2015. VW said on Monday its own legal examinations of the scandal have to date not brought to light a clear and severe breach of duty by current or former members of the executive board. 

VW press conference
VW

Pound in biggest gain since late 2008

That 2.3% rise against the dollar is the biggest rise since March 2009 when the markets were pretty bonkers amid the credit crunch and endless eurozone crises. It also gained strongly against the euro - 2% -  today. 

Pound note and coin
Reuters

'Regulators to drop claims that Big Six energy firms overcharged'

Business Live has just got around to leafing through the FT, which says the Competition and Markets Authority is preparing to drop its claim that the big six power firms overcharged households by £1.7bn a year. It will now say, claims the FT, that that's what would have been saved had we all switched. Two years ago the CMA started looking into the operation of the energy market amid much anger from customers about high energy bills. That report is scheduled for Friday. It should prove a rare Brexit-free news story. 

London markets close

With a thumping gain of 3.13%, that puts the FTSE above 6,200 at 6,209.61 points. The pound also jumped, gaining 2.2% against the dollar to $1.4679 and up 2% against the euro to €1.2979. Investment business Hargreaves Lansdown topped the top 100 risers, with a gain of 8%, with Royal Bank of Scotland, Lloyds, Barclays and Taylor Wimpey all stronger by about 7% as investors bet that Remain is currently more likely than Brexit - a situation that they believe will favour their business prospects.

Incidentally, the Hargreaves Lansdown boss Peter Hargreaves himself backs Brexit. 

Ford letter on Referendum

The UK is our largest sales market in Europe and home to significant Ford design, engineering and manufacturing operations. The IMF, OECD and Bank of England, among others, have warned that a leave vote could create economic instability and uncertainty. Although the full consequences of this are unknown, we estimate that the potential cost to our business could be hundreds of millions of dollars every year. Our primary interest is in maintaining stability and avoiding uncertainty in the trading environment so we can continue to build an even stronger business and create a more secure future for our almost 14,000 employees in the UK and for our business in Europe. We believe the best way of achieving this is for the UK to remain a member of a reformed EU.

Ford

Pound and shares hanging on to gains

The London markets close in about half an hour. As it stands it looks like the pound and leading shares will hang on to their gains. Markets are relieved that the prospect of a Brexit looks less likely according to polls taken over the weekend. Markets, as we're constantly reminded, hate uncertainty - although it does of course give dealers the opportunity to make more exciting bets. 

VW - boss probed - background

Martin Winterkorn stood down last September when it emerged - to worldwide shock - that VW had fitted vehicles with devices intended to cheat emissions test results. Dr Winterkorn - who said he took full responsibilty for the scandal - denied personal wrongdoing. Today a German prosecutor said there is sufficient evidence to suggest that VW management knew about the cheat devices before September. And that he's investigating Dr Winterkorn - and another unnamed former board member - over the possibility that they deliberately delayed going public in order to influence the company's share price.

Jenny HIllBBC Berlin

Swiss kit rips

Watchers of the Switzerland-France match on Sunday were struck by the number of times the Swiss team had their shirts ripped. Kit manufacturer Puma said it had traced a problem with ripped shirts for the Swiss team at Euro 2016 to a defective batch of material used only in a limited number of home jerseys for the team. During Sunday's draw, the shirts of at least four Swiss players were torn when pulled, forcing members of the team to swap tops three times in the first half. "Puma has checked the inventory of all jerseys of all Puma teams and can assure that such an unfortunate incident does not happen again," it said in a statement.

Swiss player
Getty

Nissan statement on Vote Leave action

We were extremely disappointed to discover that the Vote Leave campaign had been using the Nissan name and logo in their literature and on their website without our permission. We immediately requested that they stop doing so. “It has since come to light that the Vote Leave campaign continue to use our logo and trademark despite our repeated requests for them to stop. “Permission to use our name and logo was not requested. If it was, it would not have been granted. “To be clear, Nissan is not supporting any political campaign regarding this most serious of issues. This is a matter for the people of the UK to decide. "We have repeatedly asked Vote Leave to stop using our name and logo on their materials and to stop misrepresenting our views – a request that has clearly been denied.

Nissan

VW boss probe - more

Reuters reports the prosecutor's office in Braunschweig said the new probe centres on "sufficient real signs" that Volkswagen's duty to disclose the possible financial damage of its manipulations may have arisen prior to Sept. 22, 2015 when the carmaker publicly admitted to its wrongdoings. Current Volkswagen Chairman Hans Dieter Poetsch, the carmaker's finance chief at the time, is not being probed. But it still hasn't named the other party being investigated alongside former boss Mr Winterkorn. 

Pound higher as US opens

Sterling is holding on to most of its earlier gains. It has risen almost 2% against the dollar to more than $1.46, and against the euro it is up 1.5% to €1.29. Last week the pound was close to €1.40, flirting with lows reached in February - themselves close to the lowest levels since the credit crisis.

German prosecutors investigate VW's Winterkorn

AFP news agency is reporting German prosecutors have opened an investigation of former Volkswagen chief Martin Winterkorn on allegations of market manipulation in connection with the company's scandal over cars rigged to cheat on US diesel emissions tests. Braunschweig prosecutor's spokesman Matthias Diekman said in a statement Monday that Winterkorn and one other, unidentified, VW employee are being investigated on allegations they did not release information about the manipulation in a timely manner. Winterkorn stepped down as the scandal came to light, saying he was doing so ``in the interests of the company even though I am not aware of any wrongdoing on my part.''  

Martin Winterkorn
af

US markets open higher on 'receding Brexit fears'

US shares have opened sharply higher. Traders say weekend opinion polls showing the UK Remain campaign had picked up support was spurring the rises. The Dow Jones is up 1.4% in early US trade - some 250 points higher at 17,926.91, with the Nasdaq and the S&P 500 are up a similar amount.

Nissan suing Vote Leave campaign

The Japanese car marker Nissan said 10 days ago it was thinking about suing the Vote Leave campaign for using its logo on its leaflets. There are other multinationals irked about the use of their logos by the Out campaign. The chief executives of Unilever, GE and Airbus have said Vote Leave's use of their logos is "highly misleading to British voters" and an "act of bad faith".The Leavers were highlighting - broadly speaking - comments by the firms that they would stay in the UK whatever the outcome. 

Protestoirs
AFP

Nissan sues Vote Leave

Reuters is reporting that the Japanese car maker Nissan is going to take legal action against the Vote Leave campaign for using its logo on campaign leaflets.

Nissan logo
Reuters

Branson: I'm hoping sense will prevail

Sir Richard Branson explains what he's afraid of in the event of the UK leaving the EU.

I'm very fearful that Britain loses a market of 500 million people, that it'll be catastrophic for Britain. I think we'll find the pound will plummet, stock markets will collapse. I think that that inevitably will have a knock-on effect on pensions. It'll have a knock-on effect on jobs and so I'm hoping that sense will prevail on Thursday and people will get out and vote and vote to stay.

Sir Richard BransonEntrepreneur

Why Sir Richard Branson is backing Remain

Richard Branson
BBC

I've been in business for 50 years now. I can remember the days before we were part of the EU - 35% tax if I exported goods, 35% tax if I imported goods. It was really difficult dealing in Europe, trading in Europe, getting people to work there and I just don't want to go back to those days. Bureaucracy was far worse than it is today and the costs were far greater as well.

Sir Richard BransonEntrepreneur

FTSE heads higher

The FTSE 100 continues to make gains. A short while ago it was at 6,211.02 - a 3.15% increase so far today. 

The FTSE 250, which has more domestic stocks, is also faring well. It's up 3.18% at 16,944.33.

Poundland a 'good fit' for Steinhoff - Moody's

Poundland logo
Getty Images

Discount retailer Poundland would "fit well" into South African retailer Steinhoff's UK shop operations, according to credit rating agency Moody's. 

Steinhoff, which owns Harvey's, Bensons for Beds and discount clothing chain Pep & Co, last week said it was considering a bid for the company.

Moody's Douglas Rowlings said Poundland would benefit from lower operating costs because it would be able to tap into Steinhoff’s procurement, housing and logistics services.

"And, because Poundland and Steinhoff's Pep & Co stores target the same discount retail customer base in similar locations, there is a potential to share retail space and to cross sell," he added. 

Rail boss denies sabotaging strike talks

Protesting RMT members
BBC

The managing director of ScotRail has denied sabotaging talks aimed at avoiding a series of strikes over driver-only trains.

The RMT accused ScotRail of refusing to resume talks until 11:00 on Monday, hours before the strikes begin.

But Phil Verster, managing director of ScotRail Alliance, said the claims were a "mystery" to him.

RMT members will stage a series of walkouts in the coming weeks, starting with a 24-hour strike on Tuesday.

Coldly efficient?

FTSE 250 pharma firm plunges after cat allergy trial

Two kittens
Circassia

Shares in UK firm Circassia Pharmaceuticals have dropped more than 60% after its experimental cat allergy treatment failed a late-stage trial.

Results from patients taking the treatment were not significantly different to those on a placebo, the FTSE 250 company said.

RBC analyst Nick Keher described the news as "very disappointing".

Hopes for a cat allergy treatment have been a significant part of Circassia's appeal to investors. 

The biotech firm said it would focus on growing sales in other treatments, including asthma products.

Winners and losers of India's ownership changes

Apple boss Tim Cook meets India prime minister Narendra Modi
EPA

Simon Atkinson, the BBC's India Business Editor, explains the overhaul to foreign direct investment announced today...

"Attracting foreign investment into India is the main reason Prime Minister Narendra Modi has spent so much of his first two years in office travelling the world. 

"Easing rules and restrictions around FDI  help that. And to take one example, a relaxation of arduous sourcing rules – which means 30% of what foreign retailers sell must be made in India – will appeal to the likes of Apple – whose boss Tim Cook was here recently (pictured above with the prime minister) – and who sees India as the next big market. 

"Notably there are no steps to let the likes of Walmart and Carrefour come and operate supermarkets here without a local partner. Those firms would love access to India’s growing middle class. 

"But the howls of protest from the millions running small stores would likely be too much politically. So even if it creates jobs and infrastructure, some industries remain just too sensitive when it comes to FDI. At least for now."  

Banks and builders top FTSE leader board

A roof worker building new a new house
PA

Financial stocks and housebuilders are among the biggest winners on the FTSE 100 so far. 

Royal Bank of Scotland shares have risen 8%, while Barclays and Lloyds are up 6% each. UK construction companies Taylor Wimpey and Barratt Developments have increased 6.5% and 6% respectively. 

It's mainly referendum-related, according to Laith Khalaf, a senior analyst at Hargreaves Lansdown.

"The market has clearly identified financials and house builders as beneficiaries of a vote to remain in the UK," he said.

Travel groups are also trading well, with Thomas Cook up 6.3% and British Airways owner IAG up 5% so far. 

"A vote to stay in Europe would be good for the pound, boosting Britons’ spending power abroad, and therefore their propensity to travel," Mr Khalaf said. 

FTSE's upward march continues ...

A quick update on the FTSE 100 and it's risen still further ...

A short while ago it was at 6,183.26 - that's a rise of 2.69% so far this morning.

How the naira's flotation will affect daily life

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