Weekly review

The FTSE 100 ended the week 125.16 points higher, closing Friday’s session at 7,276.37.

Equity view

Sportswear retailer JD Sports said on Friday that like-for-like sales were up 5% year-to-date, leading the group to reiterate guidance for full-year headline pre-tax profits in line with its record performance in the year ended 29 January. JD Sports also expects that the phasing of profits in the current trading year will reflect "a more normalised trading pattern", with approximately 35-40% of profits generated in the first half.

HomeServe, the international home repairs and improvements business, said trading has been in line with expectations as shareholders prepared to approve a £4bn takeover by Canada’s Brookfield Asset Management. The company on Friday said its membership businesses in North America and EMEA continued to make good progress, with policy retention rates remaining strong and customer service levels remaining high.

Professional services firm JTC said on Friday that it had delivered "record new business growth" in the six months ended 30 June. JTC reported "a strong performance across the group" and said it had met all of its well-established guidance metrics, with 8-10% net organic revenue growth and an underlying earnings margin of 33-38%.

Lloyd's of London insurer Beazley lifted annual guidance on Friday on the back of higher cyber risk premiums. The company said it now expected its combined ratio to be in the high 80s - a level below 100% indicates an underwriting profit.

Energy provider SSE said on Thursday that its first-quarter trading performance had "slightly exceeded" internal expectations, leading the group to reaffirm its full-year guidance for adjusted earnings per share of at least 120.0p. SSE stated progress had been made across various capex projects "at pace", with the first power from its Seagreen offshore wind farm asset expected by the end of July and construction on its Viking onshore wind farm and Dogger Bank A, B & C offshore wind farms said to be "progressing well".

Homeware retailer Dunelm said on Thursday that full-year pre-tax profit was set to be "slightly" ahead of analyst consensus as it hailed a solid performance in the fourth quarter despite tough comparatives. In an update, the company said total sales for FY22 rose 16% on the previous year to £1.55bn, with digital sales more than 2.5x higher than pre-Covid levels.

Online grocer Ocado said on Thursday that it had swung to an underlying loss in the six months ended 29 May, principally due to a £72.8m drop in retail EBITDA as a result of lower sales and cost inflation. Ocado posted a group LBITDA of £13.6m, versus the previous year's EBITDA of £61.0m, while pre-tax losses came to £758.8m, a marked reversal when compared to the £188.5m pre-tax profit delivered the same time twelve months earlier.

Howden Joinery posted a jump in first-half profit and revenue on Thursday as it said it was trading "well ahead" of pre-Covid levels and backed its outlook for the year. The kitchen supplier said first-half pre-tax profit rose 21.6% to £145m, with revenues up 16.3% on the year to £913.1m. Versus 2019 pre-Covid levels, pre-tax profit was up 85.7% and revenues were ahead 39.9%.

Engineering firm Weir has submitted "more ambitious" scope 1,2 and 3 emissions reduction targets to the Science Based Targets Initiative for validation. Weir said on Wednesday that it will now target absolute reductions of 30% in scope 1 and 2 emissions and 15% in scope 3 emissions, versus a 2019 baseline, across its operations and value chain by 2030.

Mr Kipling and Oxo owner Premier Foods said on Wednesday that it was firmly on track to meet full-year expectations as it posted a jump in first-quarter revenues. In the 13 weeks to 2 July, group revenue rose 6% on the same period a year ago.

Mining giant Antofagasta lowered full-year copper guidance on Wednesday after Q2 production levels dropped and costs increased as a result of a drought in Chile, the temporary shuttering of its concentrate pipeline at Los Pelambres, and lower grades at Centinela Concentrates. Antofagasta produced 129,800 tonnes of copper in the second quarter, down 6.5% quarter-on-quarter, mainly due to the aforementioned concentrate pipeline incident, while gold production slipped 7.8% to 35,400 ounces and molybdenum production was 2,000 tonnes, the same as the previous quarter.

Subprime lender Morses Club said on Wednesday that it was considering using a scheme of arrangement to deal with the rising number of customer redress claims for unaffordable lending. "A key objective of a potential scheme would be to treat all customers equitably and settle eligible redress claims over a period to be defined," it said. "The directors believe that a successful scheme would provide more certainty in respect of the total liability for redress claims and help to secure the longer-term stability of the company."

Drugmaker AstraZeneca's Enhertu has received European Union approval to be used as a monotherapy for the treatment of adult patients with unresectable or metastatic HER2-positive breast cancer. AstraZeneca said on Tuesday that approval by the European Commission followed "ground-breaking" results from the DESTINY-Breast03 trial, in which Enhertu demonstrated a 72% reduction in the risk of disease progression or death versus trastuzumab emtansine.

Sustainable waste management company Biffa said it had won a 10-year contract to provide logistics, sorting and counting services for the UK's first deposit return scheme (DRS) for drinks containers in Scotland. Biffa will be the logistics partner for the scheme, with responsibilities including the collection of bottles and cans from around 30,000 locations. It will also build and operate three counting centres. No financial details were disclosed.

Australian mining giant BHP Group missed fourth-quarter iron ore output estimates and said inflationary pressure and market constraints would continue into next year. The company on Tuesday said iron ore output from Western Australia was 71.7 million tonnes (Mt) in the three months to June 30, falling short of a consensus estimate of 76 Mt and 72.8 Mt it reported a year ago.

Aerospace, defence, and security giant Babcock has agreed to sell certain aerial emergency services businesses to funds managed by mid-market infrastructure investor Ancala Partners for €136.2m. Babcock said on Tuesday that the disposed businesses provide aerial emergency medical, firefighting and search and rescue to customers services to communities in Italy, Spain, Portugal, Norway, Sweden and Finland.

Public relations and advertising giant WPP has acquired Latin American ecommerce agency Corebiz for an undisclosed sum as part of an effort to strengthen its digital commerce capabilities in the region. WPP said on Monday that the acquisition was aligned with its accelerated growth strategy, building on existing capabilities in the areas of commerce and technology.

Infrastructure group Hill & Smith said on Monday that chief executive Paul Simmons had stepped down from the role with immediate effect. Hill & Smith said Simmons will leave his employment with the group following a period of "garden leave".

Infrastructure investor HICL has agreed to purchase a 40% stake in Kiwi passive mobile tower infrastructure owner Aotearoa Towers from Vodafone New Zealand. HICL said on Monday that following completion of the transaction, Aotearoa Towers will represent approximately 7% of the group's portfolio by value and was expected to take its portfolio weighting in digital communications infrastructure to roughly 9%.

Euromoney Institutional Investor has agreed to be bought by a private equity consortium led by France’s Astorg Asset Management for £1.6bn. The consortium, which also comprises London-based Epiris, will pay 1,461p per share in cash, which is a premium of around 33.5% to closing share price on 17 June, prior to the commencement of an offer period.

Economic news

Six high street banks were found to have broken rules imposed by the Competition and Markets Authority under the Retail Banking Market Investigation Order 2017, it was revealed on Friday. The banks included Metro Bank, which has refunded affected customers, as well as the Bank of Ireland, Barclays, HSBC, Lloyds Banking Group and NatWest.

UK manufacturing output fell in July for the first time since May 2020, according to a survey released on Friday. The S&P Global/CIPS manufacturing output index declined to 49.7 from 50.3 in June, coming in below the 50.0 mark that separates contraction from expansion. Manufacturers cited a lack of new work to replace completed orders amid subdued client confidence and weaker global economic conditions.

UK consumer confidence remained at a record low in July amid surging prices and rising interest rates, according to the latest survey from GfK. The GfK consumer confidence barometer's overall index was flat on the month at -48.

UK retail sales fell in June amid the cost-of-living crisis, according to figures released on Friday by the Office for National Statistics. Sales dipped 0.1% on the month following a revised 0.8% fall in May and versus expectations for a 0.3% decline.

The Competition and Markets Authority handed down £70m in fines to two pharmaceutical companies on Thursday, for charging hugely excessive prices for an anti-seizure drug. Pfizer was fined £63m and Flynn given a £6.7m penalty, after the competition regulator reassessed part of the case around the prices charged to the NHS for the epilepsy medicine phenytoin.

UK public sector borrowing came in below expectations for June, according to fresh figures on Thursday, but was still above the Office for Budget Responsibility (OBR) forecast. The Office for National Statistics (ONS) said public sector net borrowing, excluding public sector banks, came in at £22.9bn in June, which was below consensus expectations for £24bn, but above the OBR’s forecast for £22.3bn.

House prices continued to push higher in the UK, official data showed on Wednesday, despite the mounting cost-of-living crisis. According to the Office for National Statistics, average house prices increased by 12.8% over the year to May, up from 11.9% in April.

Inflation has hit a fresh record, official data showed on Wednesday, climbing to 9.4% on the back of surging food and fuel prices. The Office for National Statistics said consumer price index inflation rose by 9.4% in the 12 months to June, up on May’s 9.1% and slightly above consensus expectations of 9.3%.

The UK’s growth prospects have been further downgraded, according to research published on Wednesday, but the country remains set to narrowly avoid recession.m In its latest quarterly update, the EY Item Club said it expects UK GDP to grow by 3.7% in the current year and by 1% in 2023, down on its spring forecast for annual growth of 4.1% and 1.9% respectively.

UK employment picked up in the three months to May but real pay fell at the fastest rate since records began, according to figures released on Tuesday by the Office for National Statistics. Average total pay growth was 6.2%, down from 6.8% in April, while regular pay growth excluding bonuses was 4.3%, up a touch from 4.2%. Adjusted for inflation, however, total pay fell by 0.9% and regular pay was down 2.8% - the biggest fall since records began in 2001.

International events

Business activity unexpectedly contracted in the eurozone in July as surging costs saw consumers retrench their spending, a survey released on Friday revealed. The S&P Global flash Composite Purchasing Managers’ Index (PMI) fell to 49.4 in July from 52.0 in June, the lowest since February 2021. A reading below 50 indicates a contraction.

The European Central Bank announced its biggest rate hike in more than 20 years on Thursday as it looks to tackle inflation, which hit a record 8.6% in June. The Bank hiked rates by 50 basis points to 0.0% from a record low, versus expectations for a 25 basis points increase. This marked the first hike in 11 years and the biggest since 2000.

Americans filed new claims for unemployment benefits at an accelerated clip in the week ended 16 July, jumping by 9,000 to 251,000, well above market expectations for a print of 240,000 and the highest since November 2021. According to the Labor Department, on a non-seasonally adjusted basis, initial claims rose by 7,853 week-on-week to 248,991, with notable increases in Massachusetts, California, and South Carolina.

Factory activity in the US mid-Atlantic region weakened unexpectedly in July as the decline in new orders accelerated its recent fall, the results of a key survey revealed. The Federal Reserve Bank of Philadelphia's manufacturing index retreated from a reading of -3.3 for June to -12.3 in July (consensus: 1.7).

The Bank of Japan kept interest rates unchanged on Thursday as expected, but lifted its inflation forecast and cut growth estimates. The Bank maintained its -0.1% target for short-term rates. It said in a statement: "Uncertainty surrounding Japan’s economy is very high. We must be vigilant to financial and currency market moves, as well as their impact on the economy and prices."

Italian Prime Minister Mario Draghi has handed in his resignation after three of his coalition partners withdrew their support in a confidence vote on Wednesday, sending the country’s stock markets tumbling. At 0930 BST, Italy’s FTSE MIB was down 2.6% at 20,797.15, massively underperforming its European peers, with the benchmark Stoxx 600 index down a much more 0.4%.

Further details on the rescue plan for German energy firm Uniper were unveiled on Wednesday, with the federal government set to take a stake of 30% in the company. According to Reuters, the company would also be allowed to pass on some of its rising costs to customers, with the plan set to be finalised as early as this week.

Brussels is drawing up emergency plans to cut gas use, it was reported on Wednesday, on fears countries could be left struggling for fuel if Russia halts supplies this winter. According to Reuters, the European Commission is expected to urge members to reduce demand ahead of winter, including a voluntary target of between 10% and 15% over the next eight months.

China has left two benchmark lending rates unchanged, it was announced on Wednesday, in line with forecasts. In a statement, the People’s Bank of China said the one-year and five-year loan prime rates - which are set by a panel of lenders overseen by the central bank - had been left on hold at 3.7% and 4.45% respectively.

The French government has offered almost €10bn to fully take over EDF, it was reported on Tuesday, offering minority shareholders a 53% premium to the 5 July closing price. France’s finance ministry said it would offer €12 per share - or €9.7bn total - as the nuclear energy generating giant resumed trading, having been suspended for a week as markets awaited details of the government’s buyout proposal.

Reporting by staff and contributors at Sharecast.com.