Weekly review
The FTSE 100 ended the week down 0.23%, or 16.8 points, closing at 7,318.04 on Friday.
Equity view
Safety equipment company Halma named Steve Gunning as chief financial officer designate on Friday, succeeding current CFO Marc Ronchetti. Gunning will join Halma on 16 January, while Ronchetti will take over from Andrew Williams as chief executive in April. Prior to his appointment at Halma, Gunning was most recently CFO of British Airways parent International Airlines Group.
Insurer Beazley reported a 22% rise in gross premiums for the first nine months of the year and initial estimated losses from Hurricane Ian would be $120m. It added that guidance for a combined ratio of high 80s remained in place.
AstraZeneca on Friday said its Imfinzi drug in combination with the Imjudo antibody and platinum-based chemotherapy has been approved in the US for the treatment of adult patients with stage IV non-small cell lung cancer. The approval by the Food and Drug Administration (FDA) was based on the results from the Poseidon Phase 3 trial.
Construction group Galliford Try said it is trading in line with expectations, against a backdrop of unsettled economic conditions. In a brief statement ahead of its annual shareholder meeting the company said it was confident of meeting its objectives for the current financial year and making good progress on its sustainable growth strategy.
Building materials distributor and DIY retailer Grafton announced another share buyback programme on Thursday as it backed its expectations for full-year operating profit and posted a rise in revenue. In an update for the 1 July to 31 October, the Woodie’s and Chadwicks owner said that group average daily like-for-like revenue was up 1.8% versus the same period a year earlier, and 17.3% higher compared to the same period in 2019.
Utilities firm National Grid said on Thursday that interim operating profits from continuing profits had shot up 50% on an underlying basis to £2.11bn, reflecting the "strength and resilience" of the business. National Grid said underlying pre-tax profits had risen 47% to £1.44bn, while earnings per share surged 193% on a statutory basis to 30.8p. Interim dividends were hiked 4% to 17.84p.
Discount retailer B&M European Value Retail reiterated its earnings guidance for the year on Thursday as it posted a rise in interim revenues but a drop in profit. In the 26 weeks to 24 September, group revenues increased 1.8% from the same period a year earlier to £2.3bn. B&M said this represents a step-up in second-quarter sales, which rose by 6.2%, compared to a 2.3% decline in the first quarter.
Defence technology specialist QinetiQ Group lifted its full-year guidance on Thursday after a spike in first-half revenues and profits. Underlying revenues for the six months to 30 September jumped 12% to £673.4m, while operating profits rose to £74.1m from £53.4m a year previously. Orders jumped 18% to £798.8m.
Taylor Wimpey reported a fall in its sales rate on Wednesday alongside a spike in cancellations as the mounting cost-of-living crisis dented demand. Updating on trading, the blue chip said it achieved a net private sales rate of 0.74 homes per outlet per week for the year to date, compared to 0.95 a year previously.
Watches of Switzerland lifted its full-year revenue guidance on Wednesday to reflect forex movements, as it posted a surge in first-half sales. In the 26 weeks to 30 October, group revenue rose 31% on a reported basis to £765m. In the UK and Europe, revenues grew 8% to £454m, but the US was the standout performer, with sales there up 86% to £311m.
Commercial UK broadcaster ITV reported a rise in sales for the first nine months of the year, as its production arm offset a fall in television advertising revenue. ITV said it expected annual advertising revenue to be 1-1.5% lower year on year as it warned of tough economic challenges ahead.
Flutter Entertainment boosted its forecasts for annual US revenues on Wednesday after a strong third quarter. The sports betting and gaming firm - which owns Paddy Power and Betfair, among other brands - said average monthly players jumped 23% year-on-year in the three months to 30 September, to 9.6m.
Sales and marketing firm DCC posted improved interim revenue and operating profits on Tuesday thanks to "strong growth" in its "seasonally less significant" first half. DCC said interim revenues had surged 44.1% to £10.83bn, while adjusted operating profits rose 11.9% to £221.2m and adjusted earnings per share were 6.7% higher at 146.4p.
Hilton Food Group warned on Tuesday that full-year operating profits would be below its expectations due to challenges in the UK seafood business and the wider macroeconomic environment. In its Autumn trading update, the company said volume and revenue have been in line with its expectations, with continued growth in revenue versus the same period a year earlier, although inflationary pressures are providing a headwind.
Associated British Foods reported a jump in full-year sales and profits on Tuesday, despite surging input cost inflation, after a bumper performance at its budget fashion brand Primark. Group revenues for the year to 17 September rose 22% on both a constant and actual currency basis, to £17bn, while adjusted operating profits rose 42% to £1.44bn.
Direct Line reported a decline in gross written premiums on Tuesday as it pointed to a challenging market backdrop for the motor and home segments. In the nine months to 30 September, total gross written premiums fell 3.5% to £2.3bn. Within that, motor premiums declined 8.9% to £1.1bn, while the home segment saw a 10.1% drop to £389.4m.
Energean said its Zeus-01 exploration well off the coast of Israel had made a commercial gas discovery of 13bn cubic metres of gas and it was now conducting post-well analysis of the find. It added that an audit of its Athena discovery had upgraded reserves by 3 bcm to 14.75bcm after post-well studies of drilling data.
Chemicals company Croda International said on Monday that group finance director Jez Maiden will retire from the group after eight years in the role. Maiden will be succeeded by former Meggitt chief financial officer Louisa Burdett following the group's full-year results on 13 March. Burdett served four years as Meggitt's CFO before it was acquired by Parker-Hannifin in September.
Drugmaker GSK said on Monday that its relapsed or refractory multiple myeloma drug candidate, Blenrep, had failed to meet its primary endpoint of progression-free survival in a recent phase III trial. GSK stated the main goal of its late-stage DREAMM-3 study was to show that the treatment was superior to the standard of care currently on the market. However, Blenrep failed to do so.
UK Commercial Property REIT maintained its dividend in its latest quarterly update on Monday, even after its net asset value fell 10.1% to 101.5p per share. The FTSE 250 real estate investment trust said its net asset value total return for the third quarter was -7.9%, while the first nine months of 2022 showed an overall net asset value reduction of 0.5%, and a total return of 3.7%.
Economic news
The British economy shrank by 0.2% in the last quarter, official data showed on Friday, leaving the UK on the brink of recession. According to the latest estimates from the Office for National Statistics, GDP fell by 0.2% in the three months to September end, compared to a rise of 0.2% in the second quarter.
UK consumer confidence fell in October to its lowest level since April 2020. The YouGov and Centre for Economics and Business Research (CEBR) consumer confidence index declined to 94.7 from 97.7 in September, falling for the third month in a row and marking the fourth-lowest score in the index’s 10-year history.
The UK housing market weakened further last month, a closely-watched survey showed on Thursday, as demand tumbled and house price growth came to a halt. According to the latest RICS Residential Market Survey, new buyer enquiries fell for a sixth successive month in October, to -55 from -36 in September. It was the lowest reading since the 2008 financial crisis after spring 2020, when the housing market was halted during the first Covid-19 lockdown.
Sterling was on the up near the end of the session on hopes of a breakthrough in talks between Brussels and London on Northern Ireland's border and trade. Citing people familiar with the matter, Bloomberg reported that the European Union had started testing the UK's live database tracking goods traffic between Northern Ireland and the rest of Britain.
Grocery inflation has soared to a fresh record of nearly 15%, industry data showed on Tuesday, adding hundreds of pounds to annual shopping bills. According to Kantar, grocery price inflation in the four weeks to 30 October reached 14.7%, the highest rate since the retail consultancy started tracking prices in 2008.
Retail sales growth slowed in October, industry research showed on Tuesday, as the mounting cost-of-living crisis curbed spending. According to the latest BRC-KPMG Retail Sales Monitor, total sales rose by 1.6% in October, compared to a rise of 2.2% in September. The figure was below both the three-month average of 1.7% and 12-month average of 2.7%.
The chief executives of Britain’s FTSE 100 companies have snared average pay increases of 23% in the past year, driven by record bonus payments, as most workers are battling for cost-of-living rises, according to research released on Monday. Research by accountancy firm PricewaterhouseCoopers (PwC) revealed CEO pay increased to £3.9m this year from £3.2m 12 months earlier.
UK retail footfall fell in the week ended 5 November as schools returned from the half-term break. According to retail experts Springboard, UK footfall fell 7.5% last week, following a rise of 8.2% in the week prior, as footfall dropped 10.1% on high streets, 7.7% in shopping centres, and 1.8% in retail parks.
Grant Shapps appeared to hint further windfall taxes on energy companies could be included in the November budget, it was reported on Monday. Speaking to Sky News, the business secretary said: "I mean, it is the case that because fuel prices have been so high, there have been unexpected profits, of course.
House prices in the UK fell in October at the fastest monthly rate since February 2021 amid rising mortgage rates and a downbeat outlook, according to data released on Monday by mortgage lender Halifax. Prices declined by 0.4% on the month following a 0.1% dip in September. On the year, meanwhile, house prices were down 8.3% in October following a 9.8% fall a month earlier.
International events
America's top general believes he sees scope for diplomatic talks between Kyiv and Moscow. In an interview with broadcaster CNBC, on Thursday, the chairman of the Joint Chiefs of Staff, Mark Milley, reportedly said that: "we don't know what the future holds, but we think there are some possibilities here for some diplomatic solutions."
Chinese stocks and the country's currency pushed higher after the Politburo Standing Committee issued new guidance aimed at better implementing its Zero-Covid policy. The 20 new guidelines issued by what is the Chinese equivalent of the presidential cabinet, put the onus on vaccinations and treatments, calling on government officials to be precise when implementing rules and to avoid overlapping measures.
The European Commission has upgraded its forecast for eurozone growth this year, but downgraded the forecast for 2023, citing the impact of the war in Ukraine. The EC said in its Autumn economic forecast that the bloc will grow 3.2% this year, up from a forecast of 2.7% in July. However, growth next year is now predicted to slow to 0.3% from a previous forecast of 1.4%.
Inflation in Germany continued to mount in October, official data showed on Friday, reaching the highest rate since reunification. According to Destatis, the Federal Statistical Office, the consumer price index rose 10.4% year-on-year last month, compared to 10.0% in September, confirming an earlier provisional forecast and matching consensus.
The cost of living in the US slipped by more than expected last month, leading traders to pare their expectations for interest rate hikes - at least for now. According to the US Department of Labor, the annual rate of increase in consumer prices declined from 8.2% for September to 7.7% in October.
First-time jobless claims rose by 7,000 in the week ended 5 November, according to the Labor Department, with the advance figure for seasonally adjusted initial claims hitting 225,000. The previous week's level was revised up by 1,000 to 218,000, while the four-week moving average dropped by 250 to 218,750.
Bank lending in the People's Republic of China plumbed its lowest level in five years last month amid ongoing Covid-19 restrictions and a slump in mortgage demand. According to the country's central bank, lending fell to 615bn yuan (£74.6bn) in October, down from 2.5trn yuan during the month before and the lowest since December 2017.
China’s factory gate prices fell into negative territory in October, official data showed on Wednesday, while consumer inflation softened, as rolling lockdowns and weakening global demand weighed heavily. According to the National Bureau of Statistics, the producer price index fell 1.3% year-on-year, reversing a 0.9% gain in September and the lowest since December 2020. It was, however, marginally better than consensus expectations for a 1.5% decline.
Small business optimism fell to a three-month low in October, according to the National Federation of Independent Business. The NFIB's small business optimism index fell to 91.3 in October, down 92.1 in September, as 33% of owners stated inflation was their primary concern when it came to operating businesses - up three points from the previous month to make up the highest percentage since the fourth quarter of 1979.
Investor sentiment has strengthened in the Eurozone, a closely-watched survey showed on Monday, as the mild autumn raised hopes for a better-than-feared winter. The latest Sentix economic index came in at -30.9, a notable improvement on October’s -38.3 and above expectations; most analysts had forecast a print closer to -35.0. It was the first increase in three months.
Reporting by Sharecast.com staff and contributors.