US markets have opened with barely a flutter. Tumbleweed on Wall Street with barely any movement on trade talks between the US and China.

The Nasdaq, the S&P 500 and the Dow Jones Industrial Average have all moved by less than 0.05% either way.

The head of the UK’s cybersecurity agency today appeared to suggest that security risks posed by Huawei can be managed, in a boost to the embattled Chinese telecoms company.

Huawei has been banned from 5G mobile network infrastructure in multiple countries because of security concerns, led by the US, but the UK has taken a more sanguine view.

Ciaran Martin, the chief executive of the National Cyber Security Centre, on Wednesday said government oversight of Huawei has proven it can flag up security problems, suggesting he doesn’t think the Chinese company needs to be banned from supplying mobile networks, according to the Associated Press.

He also said that one of the conditions for maintaining good cybersecurity is having “sustainable diversity” in the telecommunications equipment supplier market. The UK will decide its 5G security policies in the spring after government analysis is completed.

Lloyds Banking Group has shrugged off growing fears over Brexit as it unveiled a £4bn payout to shareholders, despite reporting smaller-than-expected annual profits.

Read the full story here:

It has not been a great day for British retail and the closely related property industry, with Intu Properties the biggest faller on the FTSE 250.

Shares in the owner of the MetroCentre in Gateshead and Manchester’s Trafford Centre fell by more than 8% on Wednesday after it scrapped its dividend following a spate of retail failures.

The company, which is also trying to lower its debt, said it would look to sell some assets in the UK and Spain, though it was holding off on British disposals while Brexit-related uncertainty was seriously impacting investor sentiment.

John Moore, senior investment manager at Brewin Dolphin, said: “Intu has taken a large hit from writing down the value of its portfolio by £1.4bn and has seen underlying earnings fall from £201m to £193.1m. On top of that, debt has increased to £4.9bn and is now worth 53.1% of its assets.

The company has been the subject of takeover activity and speculation over the last year, but as this has subsided attention is now on the future. As things stand, the business is caught in a catch-22 of needing to cut its debt but also having to invest in its centres, which makes it difficult to see where Intu goes next.”

Halfway through the British trading day and European stock market investors are having a more pleasant day than yesterday.

Germany’s Dax index is leading the way, with a 0.3% gain. The FTSE 100 and the FTSE 250 have both gained around 0.2%.

The CBI’s manufacturing data presents some mixed messages, say City economists.

Howard Archer, chief economic adviser to the EY Item Club, said: “An overall better-than-expected CBI industrial trends survey that points to the manufacturing sector being relatively resilient in February despite a lacklustre domestic economy, a weaker global economic environment and heightened Brexit uncertainties.”

“The pick-up in overall orders in February appears to have been due to better domestic and international demand,” he said, but “despite the pick-up in orders, manufacturers’ near-term output expectations softened appreciably in February.”

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said the order books number “likely is misleadingly strong”.

The pick-up in the total orders balance in February to its 2018 average level suggests that the recent downturn in manufacturing output is just a blip, but we doubt it is giving an accurate steer at present.

Three MPs have resigned the Conservative whip today, joining the independent group of ex-Labour MPs who broke away from their former party on Monday, in a move which could affect Brexit negotiations.

Anna Soubry, Sarah Wollaston and Heidi Allen – all of whom backed a second referendum on the UK’s membership of the EU – said the Tories had moved to the right, particularly on Brexit.

The defections may add to pressure on the government to soften its stance on Brexit, although the overall calculation for Prime Minister Theresa May has not changed fundamentally, given the MPs’ record on the issue.

Follow it on the politics live blog:

The FTSE 100 is roughly flat at mid-morning trading, with stronger performances from easyJet and Lloyds Banking Group sustaining London’s blue-chip index.

Lloyds shares rose by almost 3% after it revealed a £4bn dividend and share buyback plan, although its £4.4bn profits came in slightly below expectations.

The big business news earlier this week was Honda’s decision to close its Swindon factory in 2021. Honda insisted that its reasons had nothing to do with Brexit, triggering an intense debate.

The Japanese carmaker yesterday said 7,000 jobs will likely go – 3,500 in Swindon and the same again at suppliers and subsidiaries.

It is “fanciful” to say Brexit was not an issue, according to David Warren, a former British ambassador to Japan.

The Guardian’s Rob Davies gives much the same verdict as with Nissan’s u-turn on building its new X-Trail SUV in Sunderland: the ebbing away of confidence in Britain as a place to invest should be of grave concern, not just in the automotive sector but far beyond.

The UK’s leading consumer group says it will call for the CMA to block Sainsbury’s-Asda deal if the extensive issues the competition regulator identified are not addressed.

Which? has previously argued that it is not clear whether the £500m benefits highlighted by the supermarkets will be enjoyed by consumers or shareholders.

Alex Neill, managing director of Which? Home Services, said: “The provisional findings of the CMA’s investigation into the merger between these supermarkets echo our own concerns about its potential impact for shoppers, and so we will be watching closely to ensure that these are addressed.

If the merger is set to cause the range of problems that these findings indicate, including shoppers facing increased prices, reduced quality and a poorer shopping experience, then the CMA must intervene to prevent it from going ahead.

Clive Black, veteran retail analyst at Shore Capital, has just talked to us on the Sainsbury’s-Asda merger.

He says he has been critical of the CMA in the past, but reckons the watchdog “deserves some credit’ for its provisional verdict on the planned Sainsbury’s-Asda merger – noting that the proposed remedies “more or less eviscerate it”.

Black lambasted Sainsbury’s “bombastic arrogance” in its recent statements – in particular its promise of a 10% price cut on everyday items, which he said lacked any detail.

A duopoly doesn’t tend to work in consumers’ interests.

He added: “Sainsbury’s and Asda may go back and look at the legal challenge to the CMA, but they will have racked up massive fees. Sainsbury’s were £17m in the first half of the financial year, and that’s going to mushroom.”

In case you had forgotten on a morning dominated by a resolutely non-Brexit story, the clock is very much still ticking. There are 37 days to go until the UK is scheduled to leave the EU. There is still no deal in place.

In the latest in our series on the Brexit frontline, Julia Kollewe looks at how pharmaceutical companies across the UK are preparing for a possible no-deal Brexit.

The effects could ripple throughout the country, as the example of GlaxoSmithKline below shows. Read more for more detail on the “biggest logistical challenge ever faced by the industry”:

Sainsbury’s angry reaction on Monday to the findings has not been welcomed.

It comes after a rancorous competition investigation in which the supermarkets launched a pre-Christmas legal challenge against the CMA in an effort to gain extra time.

Referring to Sainsbury’s, Clive Black and Darren Shirley, analysts at Shore Capital, said:

We believe it is bordering on laughable for the Group to state; ‘We are surprised that the CMA would choose to reject the opportunity to put money directly into customers’ pockets’, when we always felt that [the promise of] 10% price cuts on unspecified products on an unspecified timeframe was playing to the galleries.

Sainsbury looks like it has misunderstood the consumer and the CMA.

They added: “The deal looks to have suffered a mortal blow.”

Would the deal as proposed have benefited British shoppers?

The Competition and Markets Authority was right to put significant demands on any merger, according to John Colley, professor of practice at Warwick Business School.

Choice will be reduced as there will be only one major competitor and the market is already highly competitive as Aldi and Lidl offer low prices, which the big four either have to meet, or offer better value in terms of range, quality, and service.

Major savings through the merger in terms of reduced overheads, buying prices, and store closures will not be passed onto consumers unless there is a major change in the competitive landscape. This seems unlikely as it is not clear than Amazon are going to enter the grocery market with any substance.

Everyone, rich or poor, has to buy groceries, so the CMA’s final decision will affect everyone. However, it seems the only major beneficiaries of this merger would be the Asda-Sainsbury’s shareholders.

Perhaps the biggest problem for Sainsbury’s and Asda is the sheer size of their networks.

The deal would combine two of the top three supermarkets, reducing competition among the top power players.

However, there is another dynamic at play: the fall in market share endured by the big British brands as German discounters Lidl and Aldi gained ground.

Some analysts had thought that the growth of the discounters could help persuade competition regulators that there is still enough choice for consumers.

It is safe to say that Mike Coupe is not happy with the CMA.

“They have fundamentally moved the goalposts, changed the shape of the ball and chosen a different playing field,” he told BBC radio.

A UK plc with Brexit looming, and a completely unpredictable set of competition rules, who would invest in this country? This is just outrageous.

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So will it still happen? Analysts do not sound hopeful.

Richard Lim, chief executive of Retail Economics, a consultancy, said the findings “deliver a hammer blow to the potential tie-up”.

Competition in the industry is fiercer than ever before and at the heart of this proposed deal is the need to drive further efficiencies through scale.

However, the strength of the CMA’s objections could put paid to the strategy.

The scope of any potential recommendations in the final stage may be too much to swallow for the deal to survive.

Analysts at Jefferies, the US investment bank, think Asda’s US owner, Walmart, could be forced to look elsewhere. Walmart is thought to be keen to offload the Leeds-based UK supermarket.

The deal is “unlikely to be cleared given concerns around impact on competition at both national and local level”, Jefferies analysts said.

“We assume a private equity bid for ASDA to emerge swiftly,” they said.

Back on those potential remedies. The supermarkets quickly came out and said they will continue to push for the deal to go through, so what can they actually do now?

Before the CMA’s findings most analysts’ thinking was concentrated on the number of divestitures: selling off stores in areas where competition would be affected.

The problem with this path is that supermarkets are more than their shop fronts, relying on extensive logistics networks as well. Any new owner would have to be big and experienced enough to be able to take on the stores, while also not reducing competition at the same time.

“Divestiture carries a significant risk of being an ineffective remedy”, the CMA said.

It is not clear at this stage that a suitable package of assets could be found to provide an effective and comprehensive remedy.

The CMA’s findings will heap pressure on executives at both supermarkets, who had tried to sell the deal as one which would give customers a 10% price cut.

Sainsbury’s boss Mike Coupe became the face of the deal last year when he was caught singing on camera before an interview with ITV. His choice of Broadway number, “We’re in the Money”, proved unfortunate.

Coupe argued in April last year that the deal would actually boost competition, with benefits for customers, staff and suppliers – as well as shareholders.

The CMA knows this will be a contentious decision, and has got out of the traps early in trying to persuade the public on Twitter.

The problems with the deal should perhaps have been more obvious, says an ex-competition watchdog.

Coupe has already dismissed the inevitable speculation that his job may be under threat.

A reminder that the market value of Sainsbury’s last night was £6.34bn. Shares are now down by 15%.

A fall of that magnitude, if sustained today, would translate to well over £900m wiped off its value – although the real losers will be those who bought in after the deal was announced.

On current performance Sainsbury’s is due for its worst trading day since October 2008, the height of the financial crisis.

The FTSE 100 has risen by 0.2% as trading opens on the London Stock Exchange – but all eyes are on Sainsbury’s, which has lost 12%.

Fellow supermarket Morrisons has fallen by 4.6%, while Tesco is down by 1.1% in spillover from the deal.

The choice is stark for the merger to go ahead.

There are two potential structural remedies, the CMA said. Neither will be welcomed by the companies:

(a) prohibition of the Merger; or

(b) requiring the divestiture to a suitable party (or parties) of assets and operations sufficient to address effectively each of the SLCs [substantial lessening of competition] identified in the provisional findings.

Traders expect Sainsbury’s shares to fall by between 5% and 10% when markets open at 8am GMT.

Sainsbury’s shares hit lows of 225.5p in March 2018, before the merger announcement, before surging to above 340p in August. While they have lost ground since then, they still remained well above the level before the deal emerged.

Asda, which is currently owned by US retail giant Walmart, is not publicly traded.

Here’s some more detail on the CMA’s findings, published this morning.

The £10bn merger of the UK’s second and third-largest supermarkets would create a “substantial lessening of competition at both a national and local level”, the CMA said.

The complaints are numerous, highlighting the difficulties that the supermarkets will face if the merger is to go ahead.

The CMA said the deal would harm competition:

• In every local market for supermarket groceries where either are present.
• In every local market for online grocery shopping.
• In 132 local markets for fuel in which both supermarkets operate petrol stations.

Sainsbury’s boss told the BBC the findings were “outrageous” and he would continue to challenge them.

Chief executive Mike Coupe described the CMA’s analysis as “fundamentally flawed” and said the firm would be making “very strong representations” to it about its “inaccuracy and lack of objectivity”.

“They have fundamentally moved the goalposts, changed the shape of the ball and chosen a different playing field,” he told the BBC.

“This is totally outrageous.”