Weekly review

The FTSE 100 ended the week down 1.89%, or 132.3 points, closing at 6,858.79 on Friday.

Equity view

Asset manager Ashmore said on Friday that total assets under management had fallen 12.5% in the three months ended 30 September as a result of $5.0bn in net outflows and a $3.0bn negative investment performance. Ashmore said total assets under management dropped from $64.0bn at the end of June to $56.0bn in the third quarter, with the increase in net outflows predominantly stemming from institutional investors reducing exposure in the external debt, local currency, and blended debt themes.

Housebuilder Vistry said on Friday that chief operating officer Graham Prothero will stand down from the group following the completion of its proposed combination with Countryside Partnerships. Vistry stated that Prothero will resign from the role and its board on 11 November in order to take up the position of CEO at rival MJ Gleeson.

Packaging and paper group Mondi reported a jump in third-quarter underlying core earnings on Friday amid higher selling prices and volume growth. Underlying earnings before interest, tax, depreciation and amortisation rose 55% from the third quarter of 2021 to €450m. The company hailed a "strong" performance, with higher average selling prices and overall volume growth more than offsetting significant cost pressures.

Shares in Amigo Holdings soared early on Friday after the regulator gave the embattled firm the green light to resume lending. The guarantor lender, which was derailed by a barrage of customer complaints over alleged mis-selling, restricted lending at the start of the pandemic before suspending all activity in November 2020.

Pharma giant GSK said its respiratory syncytial virus (RSV) vaccine was 82.6% effective, according to phase 3 trial data from a study of older adults. RSV is a common contagious virus affecting the lungs and breathing passages. It is one of the major remaining infectious diseases for which there is currently no vaccine or specific treatment available for adults, GSK said.

CLS said it had sold its Sentinel House office building for £7m excluding costs. The sale, at a price 4.5% above a June valuation, allows CLS to crystallise the returns on the asset while releasing capital to strengthen its liquid resources, the company said on Thursday.

Recruiter Hays hailed a record first quarter on Thursday but warned that macroeconomic uncertainty was leading to a slowdown in some markets. In the three months to 30 September, net fees rose 15% on a like-for-like basis, and 19% on an actual basis. Permanent fees were 16% higher LFL, while temp fees were up 14%, both driven mainly by continued improved margins.

Customised electronics maker discoverIE reported a rise in first-half sales and said it was on track to deliver annual underlying earnings in line with expectations, driven by a stronger-than-expected order book. The company on Thursday said sales were up 23% year on year on a constant exchange rates basis.

UK cybersecurity firm Darktrace maintained annual guidance but warned that foreign exchange headwinds could weigh on it during the period. The company on Wednesday said first quarter revenue rose 37% to $126.3 million and net annual recurring revenue rose 40.5% to $511.5m on a constant currency basis. Net new customers rose by a third to 7,757.

Recruiter PageGroup posted a jump in third-quarter gross profit on Wednesday and said it expects full-year operating profit to be in line with company-compiled consensus of £204m. Gross profit rose 14% from the third quarter a year earlier to £270.5m. The group hailed a good broad-based performance across the majority of its geographies, disciplines and brands, with record performances in nine countries despite the typically slower summer months.

Gambling software maker Playtech said it had agreed an amended €277m revolving credit facility until October 2025, with a further one-year extension option. The company added that it was serving notice to redeem at par €330m of the €530m senior secured notes due to mature in October 2023, with the redemption to take place on November 16.

QinetiQ Group maintained its full-year guidance in a trading update on Wednesday, having delivered “strong and consistent” operational performance in its second quarter. The FTSE 250 company said order intake was “excellent”, with first half orders at around £800m - up 18% year-on-year - alongside “good” organic revenue growth, profit in-line with expectations, and “strong” cash conversion.

Iron ore pellet maker Ferrexpo said it had suspended operations in Ukraine after Monday’s Russian missile strikes on the country damaged electrical power infrastructure. Ferrexpo said a limited power supply is available at its operations, which is being prioritised for critical equipment required for essential services and local communities.

Fintech group Plus500 said on Tuesday that it had delivered "further outstanding financial and operational performance", with ongoing strategic progress seen throughout the nine months ended 30 September. Plus500 stated year-to-date revenues had increased 27% year-on-year to $705.9m, while underlying earnings rose 29% to $407.1m and EBITDA margins widened 2% to 58%.

Irish convenience food group Greencore said on Tuesday that full-year adjusted operating profit and earnings per share were set to be at the lower end of the expected ranges, partly due to rail strikes. In an update for the year to 30 September, the company said revenue is expected to rise to around £1.7bn from £1.3bn.

Power control components manufacturer XP Power said on Tuesday that trading "improved significantly" in the third quarter, in line with internal expectations. XP Power stated the strong momentum in order intake seen in the first half of the year was maintained in Q3, with year-to-date order intake hitting £294.2m - up 8% at constant currency and "robust" in each segment.

National Grid said trading for the first half of its fiscal year was in line with expectations and forecast annual underlying earnings to be more marginally weighted to the second half than usual after including a full six-month contribution of National Grid Electricity Distribution - formerly Western Power Distribution. The company on Monday added that the results would also include a contribution from Rhode Island up until completion of its $5.3bn sale to PPL Corporation in May 2022.

Unite Group said full-year earnings were on track to come in at the top end of expectations on Monday, as student numbers continue to grow. Updating on third-quarter trading, the student accommodation provider said 99% of beds had been sold for the 2022/23 academic year, with rental income up 3.5%.

Frasers Group has reportedly bought collapsed Australian luxury footwear and streetwear retailer Sneakerboy for an undisclosed sum. The Australian Financial Review cited multiple sources as saying that staff members have been informed about the sale of Sneakerboy, which has been run by insolvency firm Hamilton Murphy since it collapsed in July.

South African miner Kumba Iron Ore, majority-owned by Anglo American, said production and exports would be hit by a strike at logistics company Transnet. State-owned Transnet, which operates South Africa's freight rail network and all of its ports, declared force majeure at its ports last Thursday after workers walked out in a pay dispute.

Economic news

UK Prime Minister Liz Truss fired Finance Minister Kwasi Kwarteng on Friday, forcing him to carry the can for her government's disastrous mini-budget. Kwarteng, who delivered the proposed package of unfunded tax cuts that sent markets into a tailspin, left a meeting of the International Monetary Fund in Washington a day early for urgent talks with Truss, where she demanded his resignation.

The competition regulator has decided to refer the planned acquisition of Inmarsat by Viasat to a full-scale inquiry, it announced on Friday. On 6 October, the Competition and Markets Authority (CMA) announced its decision that the merger could result in a “substantial lessening of competition” in the UK market.

Sterling and gilts rallied on Thursday, as speculation mounted that elements of the government’s controversial mini-budget could be scrapped. Foreign secretary James Cleverly had insisted during morning media interviews that the government remained committed to its growth agenda, while the prime minister’s official spokesperson said: "The position has not changed."

UK house prices are poised to fall in the coming months, a closely-watched survey showed on Thursday, as soaring borrowing costs weigh on demand. According to the latest RICS UK Residential Market Survey, house price growth continued to slow in September, with a national net balance of 32. That was well below both August’s balance of 51, and consensus expectations of 45.

The UK economic outlook has deteriorated materially, the Bank of England said on Wednesday, as it insisted "lessons must be learned" from the recent turmoil to engulf bond markets. Publishing its latest Financial Stability Report, the central bank’s financial policy committee said that since its last report in July, inflationary pressures had intensified while financial conditions had tightened globally, resulting in a “further material deterioration” in the UK’s economic outlook.

The Bank of England has quashed reports that its £65bn bond-buying scheme could be extended beyond Friday, sending gilt yields higher. The central bank announced on Monday that the scheme, launched in the aftermath of the government’s controversial mini-budget, would come to an end on Friday.

The Pensions Regulator has urged pension trustees to work closely with investment managers to review liquidity positions ahead of the Bank of England’s looming deadline. The government body said trustees should discuss current liquidity positions with advisors, including "topping up or increasingly collateral where appropriate", as well as reviewing current funding positions "in light of market changes".

The UK government has confirmed that renewable energy generators will have their revenues capped in a de-facto windfall tax. All power generators have seen revenues surge recently after Russia’s invasion of Ukraine caused wholesale gas and oil prices to rocket.

The UK economy unexpectedly contracted in August for the first time in two months, raising the risk of a recession. According to figures released on Wednesday by the Office for National Statistics, GDP fell 0.3% following 0.1% growth in July, and versus expectations of flat reading. July’s growth was revised down from an initial estimate of 0.2%.

The Bank of England expanded its emergency bond-buying programme on Tuesday for the second time this week. The Bank said the programme will now include index-linked bonds, which are linked to inflation.

International events

Inflation pushed higher in China last month, official data showed on Friday, after a sharp increase in food prices. The National Bureau of Statistics said consumer price inflation rose by 2.8% in September, against 2.5% in August and largely in line with consensus. It was the sharpest rise since April 2020, when CPI jumped 3.3%.

The cost of living in the US last month edged past forecasts last month at both the headline and so-called core level. According to the Department of Labor, in seasonally adjusted terms, the US consumer price index increased by 0.4% on the month and at an annual clip of 8.2%.

A decision by Opec to cut oil supplies could tip the global economy into recession, the International Energy Agency warned on Thursday. The cartel and its allies, which include Russia - collectively known as Opec+ - agreed a bigger-than-expected cut in oil production targets on 5 October, causing an angry response from Washington and sending oil prices sharply higher.

German inflation has surged to 10%, official data showed on Thursday, the highest rate since the country’s reunification. According to Destatis, the Federal Statistical Office, the annual consumer price index was 10% in September, compared to August’s rate of 7.9%. The figure was in line with both initial estimates and consensus. The month-on-month rate was 1.9%.

Germany slashed its growth forecast for next year on Wednesday, and hiked its inflation expectations, as energy prices continued to head higher on the back of Russia’s ongoing invasion of Ukraine. Economy minister Robert Habeck took the wraps off Berlin’s official autumn economic forecasts, predicting a 0.4% contraction for the EU’s largest economy in 2023, with inflation reaching 7%.

Wholesale prices in the US slowed a tad last month even as energy and food price gains rebounded. According to the Department of Labor, the headline rate of so-called final demand price rises increased at a month-on-month pace of 0.4% (consensus: 0.2%).

The Organisation of the Petroleum Exporting Countries (OPEC) on Wednesday downgraded sharply its forecasts for global economic growth and crude oil demand. In its first report since the controversial decision to cut production by 2 million barrels a day, OPEC cut global gross domestic product forecasts to 2.7% from 3.1% this year and to 2.5% from 3.1% for 2023, blaming soaring inflation, interest rates and geopolitical turmoil.

Eurozone industrial production rose more than expected in August, according to figures released on Wednesday by Eurostat. Industrial output grew 1.5% on the month following a 2.3% decline in July, coming in ahead of consensus expectations for a 0.6% increase.

The International Monetary Fund cut its global growth forecast for next year on Tuesday, citing the conflict in Ukraine, food and energy inflation and higher interest rates, as it warned the worst was still to come. In its latest World Economic Outlook, the IMF said it now expects global GDP growth of 2.7% in 2023, down from a forecast of 2.9% growth in July.

Small business confidence in the US edged higher last month as expectations for sales improved on the back of falling gas prices, the results of a closely followed survey revealed. The National Federation of Independent Business's small business activity index improved from a reading of 91.8 for August to 92.1 in September.

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