Weekly review

The FTSE 100 ended the week up 1.12%, closing at 7,047.67 on Friday.

Equity view

Building materials distributor Grafton has appointed Eric Born as its new chief executive officer. The company said on Friday that Born will join the group on 28 November, succeeding Gavin Slark, who will stay on until the end of December to facilitate an orderly transition.

Computacenter said on Friday that 2022 was set to be a year of "modest" growth in adjusted pre-tax profit following two "exceptional" years. In an update for the third quarter to 30 September, the company - which provides computer services to public and private sector customers - said this will be achieved despite the substantial headwind of the unwinding of the Covid-19 cost and utilisation benefits it received in 2020 and 2021.

Energy supplier Centrica said it had reopened the Rough gas storage facility off the east coast of Yorkshire and was operating at about 20% of capacity, having completed engineering upgrades over the summer. The Rough gas field was mothballed in 2017 when the Conservative government refused to subsidise the cost of repairs, despite it being the largest storage facility in the UK.

Glencore posted sharp declines in its output of several industrial and precious metals over the first nine months of 2022. The commodity trader and mining group attributed the reductions to factors ranging from the war in Ukraine to strikes in Canada and Norway or poor weather in New South Wales.

Consumer goods company Unilever said on Thursday that underlying sales had grown in the third quarter, leading the group to raise its full-year sales guidance. Unilever stated underlying sales were up 10.6% over the three months ended 30 September and 8.9% year-to-date. Beauty and wellbeing sales were up 6.7%, while personal care sales were 8.9% higher and home care sales improved by 13.6%.

Car dealership Inchcape lifted its full-year profit expectations on Thursday following a strong performance to date. In an update for the period from 1 July to 30 September, the group said revenue rose 24% on a reported basis, or 16% on an organic basis, to £2.1bn, with growth in all regions.

Mining giant Anglo American reported a slight fall in third-quarter output, as it ramped up its steelmaking coal longwall operations and posted a strong performance at its De Beers diamond unit. Overall production on a copper equivalent basis fell 1% in the three months to September 30, but were up 16% quarter on quarter.

Foxtons lifted its full-year expectations on Thursday following a strong third quarter, sending shares in the London estate agent surging. In an update for the three months to 30 September, the company said revenues rose 25% to £43.8m. Revenue for the nine months to the end of September was up 11% on the prior year at £108.9m.

Specialty chemicals company Elementis backed its full-year outlook on Wednesday as it said trading in the third quarter had been in line. In an update for the three months to 30 September, the company said it delivered a "good" performance, with double-digit revenue growth on an underlying basis. This was driven by further strong performances in personal care and coatings, underpinned by "strong" key account relationships and supply resiliency.

Emerging market-focused bank Standard Chartered on Wednesday posted an estimate-beating 40% increase in third-quarter profit and lifted its annual outlook. Pre-tax profit rose to $1.39bn in the three months to September 30 from $996m a year earlier and against the company-compiled average estimate from analysts of $1.05bn.

Software, security and cloud services specialist Bytes Technology reported a rise in first-half profit and revenues on Wednesday amid growth across all areas of the business. In the six months to the end of August, gross invoiced income jumped 23.2% to £786.2m, while gross profit was up 23.8% at £65.5m and revenue rose 27.9% to £93.5m. The company declared an interim dividend per share of 2.4p, up from 2.0p in the same period a year earlier.

Advertising giant WPP said on Wednesday that third-quarter revenues had surged, reflecting "broad-based growth" across its agencies, markets and industry sectors. WPP stated revenues had increased 10.3% in Q3 to £3.57bn, or 2.7% on a like-for-like basis, after winning $1.7bn in net new business throughout the period. Year-to-date revenues were up 10.2% at £10.32bn.

Genuit Group said it expected profit for the year to be at the lower end of analyst expectations after market turmoil hit trading at the end of the third quarter. The company, which makes sustainable water, climate and ventilation products for the built environment, said group revenue for the nine months to September 30 rose 4.7% to £472m. On a like-for-like basis, growth was 3.0%.

IT infrastructure services provider Softcat reported a rise in full-year profit and revenue on Tuesday as it hailed good growth across all segments. In the year to 31 July, pre-tax profit increased to £136.1m from £119m a year earlier, while revenue rose 37.5% to £1.1bn.

AstraZeneca said its Fasenra treatment for a rare inflammatory disease of the oesophagus failed to meet one of the two dual-primary endpoints in a phase 3 trial. Fasenra demonstrated a statistically significant improvement in histological disease remission, but not a change in dysphagia symptoms, compared to placebo, in patients with Eosinophilic oesophagitis (EoE) aged 12 or older.

Urban Logistics REIT said it had collected 99% of rents in the six months to September 30. The company on Tuesday added that it had secured 12 new lettings in the period covering 470,000 sq. ft. of space, generating £4m of additional rental income.

Publishing company Pearson said on Monday that underlying sales were up 7% in the third quarter, leading the group to reaffirm its full-year sales and adjusted operating profit expectations. Pearson said assessment and qualifications sales grew 12%, with good performances in clinical assessment due to a continued focus on health and wellness, while virtual learning sales increased 5% year-on-year, underpinned by a solid performance from its virtual schools unit.

Auto Trader said it had sold its Webzone subsidiary to Mediahuis Ireland for €30m. Mediahuis owns the CarsIreland.ie and Cartell.ie websites.

Healthcare group Syncona said on Monday that it has agreed to buy US biotechnology firm Applied Genetic Technologies Corporation (AGTC) for around $23.5m, or $0.34 per share, in cash. AGTC is a clinical-stage company focused on the development and commercialisation of adeno-associated virus (AAV)-based gene therapies for the treatment of rare and debilitating diseases with an initial focus on inherited retinal diseases (IRDs).

AstraZeneca said its Imjudo drug, in combination with Imfinzi, had been approved in the US for the treatment of adult patients with unresectable hepatocellular carcinoma (HCC), the most common type of liver cancer, the company said on Monday. The approval by the US Food and Drug Administration (FDA) was based on positive results from the HIMALAYA Phase III trial. In this trial, patients treated with the combination of Imjudo and Imfinzi experienced a 22% reduction in the risk of death versus Bayer’s sorafenib.

Economic news

UK Prime Minister Rishi Sunak is reportedly looking to build a buffer in the public finances as he draws up an economic plan to plug Britain’s budget shortfall, which could entail tax rises and spending cuts of up to £50bn. Bloomberg on Friday cited an official familiar with the matter as saying that Sunak and Chancellor Jeremy Hunt want the extra headroom over and above the UK’s £35bn fiscal hole so that the package has credibility with the markets.

Vacancy rates for retail spaces in Britain improved further in the third quarter, according to fresh industry data on Friday, although they still remained above pre-pandemic levels. The BRC-LDC vacancy monitor showed the overall vacancy rate decreased to 13.9%, which was 0.1 percentage points better than the second quarter, and 0.6 points better than the same period last year.

UK retail sales bounced back in October, according to the latest Distributive Trades Survey from the Confederation of British Industry. The CBI’s reported sales balance for the month rose to +18 from -20 in September. The balance is the weighted difference between the percentage of retailers reporting an increase and those reporting a decrease.

Prime Minister Rishi Sunak and Chancellor Jeremy Hunt will deliver the UK's Autumn Statement on 17 November, along with an Office for Budgetary Responsibility forecast. Sunak was said to have been mulling over the idea of delaying next week's planned fiscal statement as part of an effort to fill a hole of £40.0bn in Britain's finances, according to the Times.

Output from UK factories slipped slightly over the past three months, even as business sentiment dropped at the fastest rate since the start of the pandemic, the results of a closely followed survey revealed. According to the Confederation of British Industry's Industrial Trends Survey, a gauge of manufacturing output was roughly unchanged at -4%, meaning that production fell at a similar pace as in the quarter to September.

The Financial Conduct Authority is seeking views on the potential competition benefits and harms from the entry of ‘big tech’ into a number of retail financial services sectors, it announced on Tuesday. It said the presence of big tech in UK financial markets had been steadily increasing, with the potential to expand further and change markets quickly.

Profit warnings by UK companies hit their highest level in the third quarter of this year since 2008 amid surging inflation, according to EY-Parthenon’s latest report. The research showed that 86 profit warnings were issued between July and September, up from 51 in the same period in 2021, which is an increase of 69%. Compared to the second quarter of this year, profit warnings were up 34%.

The foreign ministers of France, the United Kingdom and the United States reiterated their support for Ukraine's sovereignty and territorial integrity and discussed their determination to continue supporting Kyiv's efforts to defend its territory for as long as it takes. Their vow followed telephone contacts between their respective heads of defence and Russian defence minister Sergei Shoigu over the past few days, including for a second time on Sunday with Lloyd Austin, the US Secretary of Defense.

Retail footfall dropped 2.3% in the week ended 23 October due to "consumer nervousness" as the ongoing cost of living crisis squeezes household incomes amid recent political turbulence at home. According to retail experts Springboard, footfall dropped in all key destination types - down 3.3% in high streets, 1.5% in retail parks, and 0.7% in shopping centres - and declined across all UK geographies - apart from Scotland where it rose by 1.1%

The UK economic downturn deepened in October, according to a survey released on Monday, with business activity down to its lowest level since January 2021. The flash S&P Global/CIPS composite purchasing managers’ index - which measures activity in the services and manufacturing sectors - fell to 47.2 from 49.1 in September. This was below consensus expectations for a reading of 48.0 and the 50.0 mark that separates contraction from expansion.

International events

The cost of living in Germany jumped past forecasts unexpectedly in October. According to preliminary figures from the Federal Office of Statistics, the country's harmonised Consumer Price Index increased at a month-on-month pace of 1.7%.

A gauge of salary and benefits pressures in the US grew as expected over the three months to September, but only on account of the jump seen in the public sector. According to the US Department of Labor, the Employment Cost Index increased at a quarter-on-quarter pace of 1.2%.

Personal incomes and spending in the US grew more quickly than expected last month but price pressures were a touch lower than anticipated. According to the US Department of Labor, personal incomes increased at a month-on-month pace of 0.4% (consensus: 0.3%).

Rate-setters in Tokyo stood pat on monetary policy as expected, although according to analysts there had been some speculation over a potential shift in Yield Curve Control. In response, as of 1100 BST the US dollar was trading 0.95% higher versus the Japanese yen at 147.68.

The euro area's largest economy defied market expectations for a contraction over the three months to September thanks to private consumption. According to Destatis, German gross domestic product expanded at a quarter-on-quarter pace of 0.3% during the third quarter (consensus: -0.2%) and by 1.2% in annual terms upon price and calendar adjustment.

Rate-setters in Frankfurt went ahead with a 75 basis point interest rate hike but for some observers appeared to hint at the possibility of a slower pace of tightening and refrained from any mention of quantitative tightening in its policy statement. In its policy statement, the European Central Bank did say that policymakers expected to raise rather "further" whilst sticking to their meeting-by-meeting approach.

Orders for goods made to last more than three years grew more quickly than expected during the previous month, led by gains for orders of civilian aircraft and automobiles, but the details of the latest government data were much weaker. According to the Department of Commerce, in seasonally adjusted terms, durable goods orders increased at a month-on-month pace of 0.4% in September (consensus: 0.6%) to reach $274.72bn.

The US economy bounced back in the third quarter, according to data released on Thursday by the Bureau of Economic Analysis. GDP grew at an annual rate of 2.6%, coming in ahead of expectations for a 2.4% increase and marking the first jump this year after six months of contraction. In the second quarter, GDP contracted by 0.6%.

Americans lined up for unemployment benefits at an accelerated pace in the week ended 22 October, increasing by 3,000 from the prior week's unrevised level to a total of 217,000. According to the Labor Department, the four-week moving average came to 219,000, an increase of 6,750 from the previous week's unrevised average.

German consumer sentiment is expected to improve a touch next month, according to a survey released on Thursday by market research group GfK. GfK’s forward-looking consumer sentiment index for November is forecast to come in at -41.9, up 0.9 points from October and in line with consensus expectations.

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