Weekly review

The FTSE 100 ended the week down 263.47 points, or 3.62%, closing at 7,018.60 on Friday.

Equity view

Drugmaker AstraZeneca said on Friday that Ultomiris, its long-acting C5 inhibitor, had received EU approval to be used in the treatment of adult patients with generalised myasthenia gravis, a rare autoimmune neuromuscular disease. AstraZeneca stated that the European Commission's decision, which comes on the back of results from its CHAMPION-MG Phase III trial, marked the first and only approval for a long-acting C5 complement inhibitor for the treatment of gMG in Europe.

Wealth manager Investec said on Friday that it expects to post a jump in first-half profit as it hailed the diversity of its revenue streams. For the six months to 30 June, the company expects to report an adjusted operating pre-tax profit of between £372.6m and £406.2m, up from £325.7m a year earlier.

Engineering company Smiths Group said on Friday that full-year organic revenues and pre-tax profits had grown ahead of expectations amid "high demand" across the majority of its end markets. Smiths stated that organic revenues had increased 3.8% to £2.56bn, marking a fifth consecutive quarter of growth, while statutory pre-tax profits surged 263.2% to £1.03bn.

Revolution Beauty issued a profit warning on Friday as it said it has appointed independent advisors to carry out an investigation after it failed to complete its full-year audit in time. The company - whose shares were suspended in August after it was late with its results - has appointed Macfarlanes LLP and Forensic Risk Alliance to begin an independent investigation.

Shares in Made.com plunged on Friday, after the beleaguered online furniture retailer put itself up for sale in the face of sliding revenues and mounting costs. The firm, which first warned on profits in July, had been considering raising fresh equity to help shore up the balance sheet.

Safety equipment company Halma said on Thursday that it has made "good progress" in the first half of its trading year despite the ongoing "challenging" operational environment. Halma stated that it had continued to see "strong demand" for its products and services in the six months ending 30 September, with order intake "strongly ahead" of the prior year.

LXi REIT said on Thursday that it has exchanged contracts to buy 18 grocery store assets from Sainsbury’s on a sale and leaseback basis for £500m. The commercial property investor said the purchase price equates to a net initial acquisition yield of 5%, which is accretive to the company's portfolio yield of 4.7%.

Sportswear retailer JD Sports said on Thursday that it was "cautious" of its full-year trading results after a red-hot inflationary environment offset the group's improved interim revenue performance. JD Sports said interim pre-tax profits had dropped from £364.6m to £298.3m and earnings per share slipped from 4.44p to 3.58p, even as revenues rose from £3.88bn to £4.41bn in the half. Gross profit percentages remained flat at 48.5%.

Gambling software development company Playtech hailed an "excellent" first-half performance on Thursday, with a rise in revenues and earnings driven by regulated B2B markets and the Snaitech business. In the six months to 30 June, adjusted earnings before interest, taxes, depreciation and amortisation increased 64% to €203.8m, with revenues up 73% at €792.3m. Playtech said its performance in the half was ahead of the group’s expectations.

UK pharmaceutical company GSK is taking a stake in Spero Therapeutics as part of a licensing agreement for the US-based drug developer's experimental antibiotic for complicated urinary tract infections. GSK will pay Spero $66m upfront for the antibiotic tebipenem HBr and buy $9m in Spero shares, the companies said in a joint statement on Thursday.

Student accommodation provider Unite Group has disposed of a portfolio of six properties in Aberdeen for £33.0m, in line with prevailing book value and reflecting a passing net operating income yield of 6.0% for the 2022-23 academic year. Unite Group said on Wednesday that it had sold the portfolio, which was made up of 1,050 beds, to Clearbell Property Partners III, a fund managed by Clearbell Capital.

France’s Schneider Electric said on Wednesday that it has agreed to buy London-listed software firm Aveva in a £9.5bn deal. Under the terms of the acquisition, Schneider will pay 3,100p per share for the roughly 40% of Aveva it does not already own. This is a premium of around 41% to the closing share price on 23 August, which was the last business day before the start of the offer period.

Bytes Technology said on Wednesday that it continued to trade "strongly" in the first half of the year, as it struck an upbeat note on its outlook. In the half year to the end of August, the company - which provides IT software offerings and solutions - said it performed well across its key financial performance metrics, with year-on-year growth in gross invoiced income and gross profit of more than 20%. Meanwhile, adjusted operating profit growth was "comfortably in the high-teens", reflecting robust demand from the corporate and public sectors.

Tritax EuroBox said Nick Preston had stepped down as fund manager and was replaced by Phil Redding, a Partner of Tritax Management LLP. Redding joined Tritax in November 2020 as director of investment strategy, providing strategic investment advice across the four Tritax funds.

Consumer healthcare company Haleon saw operating profits grow more than 20% in the six months ended 30 June, driven by increased profits and margins. Haleon said on Tuesday that interim revenues had risen 13.4% to £5.18bn, led by an 11.6% uptick in organic revenues, leading to a 22.1% increase in reported operating profits to £900.0m.

Transport operator FirstGroup said on Tuesday that it has agreed the sale of all but two of its remaining Greyhouse US properties to Twenty Lake Management, an affiliate of Twenty Lake Holdings, for around $140m. FirstGroup, which is carrying out the sale through subsidiary FirstGroup Services, is expected to receive the proceeds in December. The company also said it completed the sale of a site in Denver for net $9m in August, with some of the proceeds being applied in further de-risking of the residual Greyhound pensions liabilities.

Holiday giant TUI said winter bookings were at 78% of pre-Covid pandemic levels, adding that it still expected to swing to a profit this year. The tour operator said bookings for November and December were at 81% of pre-pandemic levels with a continuing trend “towards a higher share of short-term bookings for Winter and strong pricing, confirming solid customer demand for holiday travel”.

Retailer Frasers Group revealed on Tuesday that Mike Ashley will not be standing for re-election as a director at this year's annual general meeting and he will step down from the board upon its conclusion on 19 October. Frasers stated that as part of Mike Ashley's "continuing strong support" for the company and its elevation strategy, he will provide the group with £100.0m of additional funding on the same commercial terms as existing unsecured borrowing facilities.

Media group Future tanked on Tuesday following a report that chief executive Zillah Byng-Thorne has informed the company's chairman that she plans to retire in the next 18 months. Sky News reported over the weekend that Byng-Thorne, who has been CEO since April 2014, is expected to step down in the second half of 2023.

Ukraine’s appeal court has found against Ferrexpo in a long-running dispute over a 2002 deal, sending shares in the Swiss miner lower. The court said the sale was invalid, and that Ferrexpo’s 40.19% stake in Ferrexpo Poltava Mining (FPM) should be transferred to the former shareholders of FPM.

Economic news

Newly-appointed chancellor Kwasi Kwarteng unveiled his plans to boost economic growth on Friday, including axing the cap on bankers’ bonuses, abolishing the highest rate of income tax and permanently increasing the stamp duty threshold. Addressing the House of Commons, Kwarteng told fellow politicians that the government was targeting annual growth of 2.5% in the medium term.

Retail sales fell sharply in September, a closely-watched industry survey showed on Friday, reversing a brief return to growth seen over the summer. According to the latest CBI Distributive Trades Survey, the retail sales volumes balance came in at -20%, a sharp contrast to August’s growth of 37%.

UK business activity fell in September at the fastest rate since January 2021, as cost pressures and waning demand took their toll, according to a survey released on Friday. The flash S&P Global CIPS composite purchasing managers’ index - which measures activity in the services and manufacturing sectors - declined to 48.4 from 49.6 in August, coming in below consensus expectations of 49.0. A level above 50 indicates expansion, while a reading below signals contraction.

Consumer confidence has tumbled to fresh lows, a closely-watched survey showed on Friday, as the cost of living crisis continues to weigh heavily. The GfK Consumer Confidence Index fell five points in September to a record low of -49, the worst overall index score since records began in 1974.

Kwasi Kwarteng confirmed on Thursday that the 1.25 percentage point rise in National Insurance that came into force in April will be reversed from November. Ahead of Friday’s mini-budget, the Chancellor also said the government will cancel the Health and Social Care Levy that was due to be implemented next April.

The Bank of England hiked interest rates by 50 basis points to 2.25% on Thursday as it looks to combat surging inflation This follows a 50 basis points increase last month - the biggest in 27 years - and takes the benchmark rate to its highest level since 2008. It was the seventh consecutive rate increase.

The government has lifted a ban on fracking for shale gas "to bolster the UK’s energy security". A moratorium on fracking has been in place since 2019 following a series of earth tremors.

UK Prime Minister Liz Truss’s new government has reportedly looked at changing the Bank of England’s money-printing programme to save the UK taxpayer billions of pounds. According to Bloomberg, under the option, interest paid on some deposits held by commercial lenders at the BOE would be scrapped, potentially saving more than £10bn a year, based on calculations with the benchmark interest rate at 2.5%.

Manufacturers are braced for a tough winter, a closely-watched industry survey showed on Wednesday, after output softened. According to the latest CBI Accenture Industrial Trends Survey, output in the three months to September continued to fall, with a balance of -4%, a marginal improvement on August’s rate of -7%.

Business energy bills are to be discounted for six months, the government confirmed on Wednesday, in response to surging wholesale energy prices. Under the Government Energy Bill Relief Scheme, electricity and gas bills for all non-domestic customers - including charities and public sector organisations - will be automatically discounted, in line with support already announced for households.

International events

US business activity shrank again in September, albeit at a slower pace, according to a survey released on Friday. The S&P Global headline flash purchasing composite output index - which measures activity in the services and manufacturing sectors - rose to 49.3 from 44.6 in August. A reading above 50 indicates expansion while a reading below signals contraction.

S&P Global's Eurozone manufacturing purchasing managers' index fell to 48.5 in September from 49.6 a month earlier, according to preliminary estimates. September's preliminary reading pointed not only to a third straight monthly contraction in factory activity but also to the biggest drop since June 2020.

Americans filed first-time unemployment claims at an accelerated pace in the week ended 17 September, according to the Department of Labor. Initial jobless claims rose by 5,000 week-on-week to 213,000, below market expectations for a print of 218,000 but still a slight increase from the prior week's downwardly revised print.

Japanese authorities intervened in foreign exchange markets on Thursday with the aim of strengthening their currency for the first time since 1998. As of 0946 BST, the US dollar was retreating by 2.11% to 141.02 yen, having earlier hit an intra-session high of 145.90.

The Norges Bank hiked its benchmark interest rate by 50 basis points to a 10-year high of 2.25% on Thursday as it looks to tackle rising inflation, and indicated that rates will most likely be lifted again in November. Governor Wolden Bache pointed out that inflation is markedly above the Bank’s 2% target and said it’s likely that inflation will remain high for longer than previously projected.

The Swiss National Bank hiked interest rates on Thursday by 75 basis points, as expected. The SNB lifted its benchmark interest rate to 0.5%, having announced its first increase in 15 years in June, to -0.25%. The Swiss central bank had kept rates steady at -0.75% since 2015.

"It is clear that we need to continue raising rates," a top European Central Bank official said. In an interview with T-Online, Isabel Schnabel said that "The signal we sent with our latest interest rate hike is clear: we are taking decisive steps to curb inflation and are making sure that it stabilises again at 2% in the medium term.

The Bank of Japan stuck to its policy of so-called yield curve control, triggering another decline in the country's currency. Rate-setters in Tokyo kept all its main policy settings unchanged, including its commitment to open ended purchases of Japanese government bonds at a fixed rate with the aim of keeping the yield on 10-year JGBs in a range of +/- 0.25%.

The Federal Reserve delivered a widely-expected 75 basis point interest rate hike, alongside a slightly more aggressive outlook for monetary policy in the near-term. Following the move, the target range for the Fed funds rate stood at 3.0-3.25%.

Vladimir Putin called for a partial mobilisation of the country's reservists, in a move decried by many in the West as an escalation. In televised remarks overnight, the Russian President also accused the US and its allies of seeking to "destroy" Russia, adding that Moscow would "use all means available" to defend its territory.

Reporting by Josh White, Michele Maatouk, Frank Prenesti, Iain Gilbert, Abigail Townsend and Alexander Bueso at Sharecast.com.