Weekly review

The FTSE 100 ended the week up 287.17 points, or 4.07%, closing on Friday at 7,334.84.

Equity view

Drugmaker AstraZeneca said on Friday that its Beyfortus asset had received European Union approval for the prevention of respiratory syncytial virus lower respiratory tract disease in newborns and infants. AstraZeneca stated that Beyfortus was now the first and only single-dose RSV passive immunisation for the broad infant population, including those born healthy, at term or preterm, or with specific health conditions.

Morgan Advanced Materials on Friday lifted profit and revenue guidance as sales for the first nine months of the year rose 10.5%. The company said it now expected full year organic constant-currency growth to be in the range 7-9%, above previous guidance, and adjusted operating profit to be marginally above the top end of current analysts' forecasts.

National World confirmed late on Thursday that it was in the early stages of exploring a possible offer for larger rival Reach. Responding to press speculation, the owner of the Scotsman and Yorkshire Post said it had not yet approached the board of directors of Reach about the possible offer.

Marketing firm 4imprint hiked full-year revenue guidance from $1.0bn to $1.1bn on Friday as it said profits were expected to be at the top end of markets views and no less than $90.0m. 4imprint said that recent positive trading momentum had continued, with October year-to-date order counts in its primary North American business up 32% over 2021, while average order values remained "buoyant" at 6% above the prior year. Overall year-to-date demand revenue was 40% higher than in 2021.

Supermarket chain Sainsbury's saw profits slump in the six months ended 17 September as cost of living pressures offset slightly improved revenues. Sainsbury's said on Thursday that statutory pre-tax profits had sunk 29% year-on-year to £376.0m, despite reporting a 4.4% increase in interim group revenues. Earnings per share fell 27% to 12.3p.

Specialist lender OneSavingsBank said it was on track to deliver its 2022 full year guidance, despite macroeconomic instability and rising interest rates. Underlying and statutory net loans increased by 7% in the nine months to September 30, to £22.4bn and £22.5bn respectively, the company said on Thursday, adding that three months-plus arrears balances remained stable at 1.1%.

Medical equipment maker Smith & Nephew posted slightly lower-than-expected third-quarter revenues on Thursday as it said revenue growth for the full year was set to be in the middle of the previously guided range. Revenue for the quarter came in at $1.25bn, up 4.8% on the same period a year earlier on an underlying basis, but down 1.2% on a reported basis due to a 600 basis points forex headwind. Analysts had been expecting revenue of $1.26bn.

BT Group is seeking a further £500m of savings after being hit by surging inflation, including higher energy prices, the telecoms specialist confirmed on Thursday. Posting interim numbers, BT said its financial performance remained on track, despite "turbulent" conditions.

Hungary-based budget airline Wizz Air produced a better-than-expected second quarter to help interim profits soar by a third as passenger numbers rebounded during the summer from the Covid pandemic. The company on Wednesday said revenue per available seat kilometre improved from -10% during the first quarter to a rise of 11% during the holiday season, boosting core profit to €218m for the half year.

Product packaging company Smurfit Kappa said on Wednesday that both revenues and profits were up year-to-date, leading the group to now expect to see full-year underlying earnings of approximately €2.3bn. Smurfit Kappa said revenues were up 33% year-on-year at €9.72bn, while pre-tax profits were 77% higher at €1.14bn and underlying earnings grew 43% to €1.76bn in the nine months ended 30 September. EBITDA margins also improved from 17.0% a year ago to 18.2%.

Morgan Sindall said on Wednesday that it was set to deliver a full-year performance in line with its expectations despite a more difficult backdrop. The construction company said that since its half-year results on 4 August, increased general market uncertainty and rising inflation have made the economic backdrop more challenging. Nevertheless, trading across the group has been "robust", it said.

Computacenter said on Wednesday that it has appointed Christian Jehle as chief financial officer and executive director, succeeding Tony Conophy, who has notified the company of his plans to retire. Jehle will join the group and the board between 24 March and 1 July 2023. He is currently CFO and executive director of the UK & Ireland division of credit-checking firm Experian, prior to which he was CFO of Global Decision Analytics.

Services group Rentokil Initial saw "continued momentum" across the group in the third quarter, with revenues up double-digits year-on-year. Rentokil said ongoing and total revenues were both up 18.9% at £900.9m and £901.3m, respectively.

West End real estate owner Shaftesbury said occupancy and footfall continued to rebound from the Covid pandemic, but warned that its portfolio valuation fell in the second half due to the worsening economic outlook. The company, which operates properties in London’s famous shopping and theatre district, valued its portfolio at £3.2bn in the six months to September – a fall of 3.6%.

Interdealer broker TP Icap posted a jump in revenue on Tuesday thanks to a solid performance from its global broking division. In the nine months to 30 September, total group revenue rose 10% from the same period a year earlier to £1.59bn. TP Icap said it benefitted from favourable market conditions in the global broking segment, particularly in rates, which is its largest and most profitable asset class.

West End landlord Capital & Counties Properties said it remained well placed for the key Christmas trading period on Tuesday, despite the weakening economic outlook. The FTSE 250 property investment firm said trading at its flagship estate - Covent Garden in central London - had been "resilient" in the three months to 31 October, with "positive" footfall and sales metrics.

Engineering company IMI said on Monday that it had agreed to acquire New York-based micro-fluid flow control business CorSolutions in order to provide it with "unique microfluidic capabilities" within the "attractive" analytical instrument market. IMI said it will make an initial cash consideration of $10.0m for CorSolutions, which will become part of its Precision Fluid OEM business unit.

Heat treatment specialist Bodycote has named Ben Fidler as its next chief financial officer. Fidler, who is currently deputy chief financial officer of Rolls-Royce, will join Bodycote's board in February 2023 before taking up the role on 1 May.

Independent energy company Diversified Energy said on Monday that both it and Oaktree Capital Management had jointly closed an ESG-aligned asset-backed securitisation of certain co-owned producing natural gas and oil assets located in Oklahoma. Diversified Energy stated that its agreement with Oaktree, its fourth ESG-aligned financing in 2022, was linked to key performance indicators based on emissions reduction targets.

Argo Blockchain shares tumbled after the cryptocurrency miner said a planned fundraising had fallen through. The AIM-listed company announced earlier this month that it had signed a non-binding letter of intent with a strategic investor to raise around £24m via a subscription for ordinary shares.

Economic news

The UK government on Friday denied it is planning to scrap or delay EDF’s Sizewell C nuclear project. Responding to an earlier report from the BBC, a spokesman for Prime Minister Rishi Sunak said negotiations with the French utility over the £20bn project are ongoing.

Travellers to the Football World Cup in Qatar were being warned of disruption at Heathrow on Friday, as members of the Unite union agreed to strike for three days from 18 November. The union said the action was being taken by 700 employees of aviation service providers Dnata and Menzies Aviation, who work in ground handling, airside transport and cargo.

UK new car registrations improved slightly in October, with total registrations rising from 106,300 in 2021 to 134,300 in 2022. According to the Society of Motor Manufacturers and Traders, private new car registrations totalled 62,700 in October, above 2021s 58,400 print, but below October 2018's 69,200.

Activity in the UK construction sector continued to grow in October, but new orders fell for the first time in more than two years, according to a survey released on Friday. The S&P Global/CIPS construction purchasing managers’ index rose to 53.2 from 52.3 in September, making the highest reading since May and coming in above expectations of 50.5. A reading above 50.0 indicates expansion, while a reading below signals contraction.

UK Finance Minister Jeremy Hunt is preparing a raid to slam entrepreneurs, savers and landlords with higher taxes when he unveils his Autumn budget later this month, the Daily Telegraph reported, citing unnamed sources. The report said Hunt was considering an increase in the headline rate of capital gains tax, taxes on dividends and slashing or removing the £2,000 tax-free dividend allowance.

Retail footfall faltered in October, industry data showed on Friday, as rising prices and the cost-of-living crisis deterred shoppers. According to the latest BRC-Sensormatic IQ Footfall Monitor, total UK footfall increased 2% in October year-on-year. However, once the impact of the various lockdowns and other pandemic restrictions were stripped out, it slumped 11.8% year-on-three-years in October, 2 percentage points worse than September.

Seven UK financial lenders have been forced to hand back £12.4m in compensation to almost 60,000 customers as a result of poor practices amid the Covid pandemic and cost-of-living crisis, the Financial Conduct Authority said on Thursday. In a report into borrowers in financial difficulty during the pandemic, the watchdog revealed that it had told at least 32 firms to improve their relationship with customers.

The Bank of England hiked rates as expected on Thursday, but said that consumer price inflation looked set to fall over a percentage point short of its 2.0% target by the end of its three-year policy horizon. Bank Rate was hiked by 75 basis points to 3.0%, the biggest increase for 33 years.

The UK services sector shrank in October for the first time since February 2021 as the mini-budget took its toll, according to a survey released on Thursday. The S&P Global/CIPS services purchasing managers’ index declined to 48.8 from 50.0 in September, marking the worst reading since January last year. A level below 50.0 signals contraction, while a reading above indicates expansion.

Shop price inflation reached a fresh record high last month, research published on Wednesday showed, as the price of food continued to spike. According to the latest BRC-Nielsen IQ Shop Price Index, shop price inflation reached 6.6% in October from 5.7% a month earlier. That was well above the three-month average of 5.5%, and the highest since the index began in 2005.

International events

Hiring in the US continued to grow more quickly than expected last month. According to the Department of Labor, in seasonally adjusted terms non-farm payrolls increased by 261,000 during the month of October.

China approved BioNTech SE's mRNA Covid-19 vaccine for use among the expatriate population in the People's Republic of China. During German Chancellor Olaf Scholz's visit to Beijing, he and Chinese leader, Xi Jinping, also broached a pathway for approval of the vaccine for use among the wider Chinese population, The Wall Street Journal reported.

China is reportedly working on plans to scrap a system that penalises airlines for bringing virus cases into the country. Bloomberg on Friday cited people familiar with the matter as saying that the State Council, which oversees China’s bureaucracy, recently asked government agencies including the civil aviation regulator to prepare for ending the so-called circuit-breaker mechanism.

Eurozone business activity contracted in October as the cost-of-living crisis hit demand, the S&P Global PMI survey revealed on Friday. Its final composite Purchasing Managers' Index (PMI) for the 19-country single currency bloc euro zone fell to a 23-month low of 47.3 in October from September's 48.1. A reading of below 50 indicates contraction.

German factory orders fell a lot more than expected in September, according to figures released on Friday by Destatis, adding to concerns it is entering a recession. Factory orders declined by 4% on the previous month following a 2% drop in August, missing expectations for a 0.5% fall.

US non-farm labour productivity and unit labour costs were a tad better behaved than expected during the third quarter. According to the US Department of Labor, the former increased at a quarterly annualised pace of 0.3% over the three months to September (consensus: -0.1%).

Activity in America's services sector grew a tad less quickly than anticipated in October, the results of a closely followed survey revealed, but price pressures grew. The Institute for Supply Management's services sector Purchasing Managers' Index slipped from a reading of 56.7 for September to 54.4 in October (consensus: 55.9).

Eurozone unemployment edged lower in September, according to figures released on Thursday by Eurostat. The unemployment rate ticked down to 6.6% from an upwardly-revised 6.7% in August, in line with expectations. In September 2021, the unemployment rate stood at 7.3%.

Activity in China’s services sector deteriorated further in October as Covid restrictions took their toll, according to data released on Thursday. The Caixin services purchasing managers’ index declined to 48.4 from 49.3 in September, missing consensus expectations of 49.0. A reading over 50.0 indicates expansion, while a reading below signals contraction.

The US central bank appeared to take a page out of the European Central Bank's playbook, telling investors that it would begin to take into account the cumulative effect of policy to date and its lags. Investors interpreted the new wording of its policy statement as dovish.

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