Weekly review

The FTSE 100 ended the week up 144.58 points, or 1.88%, closing at 7,844.07 on Friday.

Equity view

RHI Magnesita said it was buying a 65% shareholding in China’s Jinan New Emei for 293 million Chinese yuan (€40m). Based in Shandong province, Jinan New Emei Industries makes refractory slide gate plates and systems, nozzles and mixes for use in steel flow control, and employs more than 1,300 people.

Vodafone is reportedly planning to make its biggest round of job cuts in five years as it looks to rein in costs and revive its stuttering performance. The Financial Times cited people briefed on the discussions as saying that the telecoms group is looking to shed several hundred jobs, most of which are located at its London headquarters.

ITV said on Friday that ITVX, its new, free, ad-funded streaming service, performed strongly in the first month after its launch on 8 December. The service delivered a 55% jump in the broadcaster’s streaming hours versus the same period last year. During the launch month, ITV's online users rose by 65% on the same period a year earlier.

Bulmers cider maker C&C Group said annual results would be hit by the cost of living crisis affecting consumers. Despite year-on-year net revenue growth of around 20% in the key trading month of December, the company said it now expected operating profit in the year to February of €84-88m against consensus estimates of €95m.

Tesco reiterated full-year profit guidance on Thursday as the supermarket chain posted strong Christmas sales. The grocer, the UK’s largest by market share, said like-for-like sales excluding fuel in the UK and Ireland jumped by 7.8% in the six weeks to 7 January and by 7.2% in the UK.

Supermarket Income REIT said it had bought a 25.5% stake in the Sainsbury's Reversion Portfolio (SRP) for £196m from British Airways Pension Trustees, taking its holding to 51%. The real estate investment trust’s holding in the SRP is now 51% with the rest held by Sainsbury's.

Premier Inn owner Whitbread posted a jump in third-quarter sales on Thursday as it highlighted a strong performance in the UK and further progress in Germany. In the 13 weeks to 1 December, total sales rose 22.9% from the same period a year earlier, with sales in the UK and Germany up 19.2% and 158%, respectively.

Hilton Food Group said on Thursday that full-year trading was in line with its expectations as it hailed a "pleasing" performance in the run-up to Christmas. In an update for the year to 1 January 2023, the food packaging business pointed to continued revenue growth versus a year earlier.

J Sainsbury increased full-year profits guidance on Wednesday after "record" Christmas trading. The supermarket chain said sales in the 16 weeks to 7 January 2023 rose by 5.2%, excluding fuel, or by 5.9% on a like-for-like basis. In the Christmas trading period - the six weeks to 7 January - sales jumped 7.1%.

UK cybersecurity company Darktrace lowered annual revenue forecasts as potential customers baulked at trialling the company’s products amid the tougher macro-economic environment. The company on Wednesday said it now expected its constant currency annual recurring revenue to increase by 29-31.5% in the year to June 30, down from a previous forecast of 31-34%.

Recruiter PageGroup downgraded its full-year profit expectations on Wednesday as it highlighted a slowdown in the fourth quarter. The company now expects 2022 operating profit of around £195m. It had said in October that profit would meet consensus expectations of £204m.

Builders merchant Grafton said it expected annual profit to beat analysts’ forecasts after a 9% rise in revenues during 2022. In a trading update on Wednesday, the group said over half of its revenue was generated in Ireland, the Netherlands and Finland.

RS Group said it expected full year profit to be towards the top end of consensus estimates after third quarter revenues grew 8% despite a tough economic backdrop. The distributor of industrial and electronic products said strong trade in EMEA and the US offset an 8% fall in Asia-Pacific sales due to the shortage of computer parts.

Morgan Advanced Materials said it had been the victim of an attempted cyber hack on its computer network. The specialist product maker did not reveal the extent of the attack or whether any systems had been compromised, other than revealing that measures had been taken to contain the incident and "remediate and restore systems".

Online electrical retailer AO World lifted its profit guidance for the year to March 2023 as it said profitability was running ahead of its previous expectations, having taken actions to cut costs and improve margins. In an unscheduled update for the third quarter, AO said that since the beginning of the current financial year, it has been focussed on profitability, prioritising more profitable cash generative sales and reducing costs.

Student accommodation provider Unite said annual earnings would be at the top end of guidance as higher than expected rental income in term 1 of the 2022/23 academic year more than offset the impact of higher interest costs in the second half of the financial year. Unite said demand for the group's accommodation has been strong in the first part of the sales cycle. 70% of rooms are now sold for the 2023/24 academic year, significantly ahead of the prior year and pre-pandemic levels (2022/23: 60%).

Airtel Africa said its Nigerian subsidiary had bought 4G & 5G spectrum from the Nigerian Communications Commission for $316.7m. The company said it had acquired 100 MHz of spectrum in the 3500MHz band and 2x5MHz of 2600MHz.

Upstream energy company Capricorn Energy has convened a general meeting at the request of investor Palliser Capital Master Fund in order to discuss the potential removal of multiple board members. Capricorn, formerly known as Cairn Energy, said on Monday that it will hold a general meeting on 1 February, with the firm set to consider resolutions to remove seven of its current directors and to appoint six new directors, selected by Palliser.

BATM Advanced Communications said on Monday that it has received a "substantial" government cyber security order with a value of $26m. The order is to be delivered within a maximum period of five years and will begin this year.

Restaurant group Tortilla Mexican Grill said on Monday that its trading performance had remained "highly resilient" throughout 2022 despite "ongoing macroeconomic challenges". Tortilla stated group revenues rose 20% year-on-year to £57.7m, driven by the "ongoing strength" of its customer proposition and demand for its sector-leading brands, as well as the continued expansion of its site portfolio. Like-for-like revenue was up 16.4%.

Economic news

The UK economy unexpectedly grew in November, official data showed on Friday, easing recession fears. According to the Office for National Statistics, monthly gross domestic product nudged 0.1% higher in November, following growth of 0.5% in October. Analysts had been expecting a 0.2% decline.

Rail unions have warned MPs that there is no immediate end in sight to their increasingly bitter dispute over pay and working conditions. Representatives from the three main unions - Aslef, RMT and TSSA - were appearing before the transport committee on Wednesday following weeks of industrial action.

Struggling ‘gourmet’ burger chain Byron is considering the closure of almost half of its remaining restaurants, it emerged on Tuesday. According to Sky News, up to 10 of Byron’s 21 locations could close permanently as part of a pre-pack administration being planned by its owner, the Mayfair-based private investment outfit Calveton.

Grocery sales jumped in December, industry research showed on Tuesday, as shoppers splashed out on last-minute festive treats. According to NielsenIQ, total till value growth increased to 10.9% from 7.6% in November, boosted largely by high food inflation and weak comparatives but also especially strong trading in the seven days leading up to Christmas Eve.

UK retail sales jumped in December, industry data showed on Tuesday, as shoppers splashed out on Christmas food and gifts. Many in the sector had been concerned that the cost-of-living crisis, widespread rail strikes and the cold snap would weigh on sales during December, one of the most important months of the year for retailers.

Electric car battery startup Britishvolt is in talks to sell a majority stake, it emerged on Monday, in a bid to ensure its future. According to a number of press reports, including from the Telegraph and the Financial Times, the company said it was “in discussions with a consortium of investors concerning the potential of a majority sale of the company”.

The government is poised to cut the amount of support it provides to help businesses with soaring energy costs. The energy relief scheme, which was introduced last autumn to help public sector organisations and charities as well as businesses, expires at the end of March.

The UK’s manufacturing sector is at risk of increased job losses and reduced output, an industry survey warned on Monday, as surging energy costs and political instability take their toll. According to a survey by Make UK, the sector’s trade body, and PwC, 70% of respondents expect energy costs to rise this year, despite government support, with two thirds saying they expected to cut jobs or reduce production in response.

International events

US central bank survey data published the day before suggested that wage growth decelerated "notably" at the end of 2022. The Federal Reserve Bank of Atlanta's Fed Wage Tracker's year-on-year rate of increase slowed from 6.5% for November to 5.5% in December in unweighted terms - the second largest drop going back to 1983.

Consumer confidence in the US improved for a second month from a low base at the start of 2023, the results of a closely followed survey revealed. Inflation expectations one year ahead on the other hand decreased notably, even as those for over the longer-term ticked higher.

Industrial production unexpectedly pushed higher in the Eurozone in November, official figures showed on Friday. According to Eurostat, the statistical office of the European Union, seasonally-adjusted industrial production rose 1%, and by 0.9% across the wider bloc. In October, industrial production fell by 1.9% in both the Eurozone and EU.

The German economy grew a touch more than expected last year but growth likely stagnated in the final quarter, according to an initial estimate released on Friday by Destatis. The economy grew 1.9% on the year in 2022, down from 2.6% in 2021 and versus expectations of 1.8% growth.

Both exports and imports plunged in China last month, official data showed on Friday, as Covid tore through the economy and global demand weakened. Exports contracted by 9.9% in December year-on-year, following an 8.7% fall in November. December’s decline was the worst since February 2020, although it was ahead of forecasts for a 11.1% slide.

The cost of living in the US slipped by a tad more than expected last month. According to the US Department of Labor, the annual rate of headline consumer prices fell from 7.1% for November to 6.5% in December (consensus: 6.6%).

Americans filed unemployment claims at a decelerated clip in the seven days ended 7 January, hitting their lowest level in more than three months. According to the Labor Department, weekly initial jobless claims fell by 1,000 to 205,000, well and truly short of the 215,000 figures expected on the Street, adding to recent evidence of a tight labour market. The main increases were seen in California and New York.

France's CGT trade union on Thursday called for strikes in the refinery sector over plans to raise the state retirement age, while unions representing Paris metro workers said they would also take action. France President Emanuel Macron wants to increase the retirement age by two years to 64. All unions have already announced a nationwide day of strike and protests for January 19, but have also warned that more action will follow in different sectors.

Inflation in China pushed higher last month, official data showed on Thursday, driven by rising food prices. According to the National Bureau of Statistics, the consumer price index rose 1.8% year-on-year, in line with consensus and following a 1.6% increase in November.

All US flights were grounded early on Wednesday as a result of a glitch within the Federal Aviation Administration's computer system. The FAA ordered airlines to halt all domestic departures until 1400 GMT in order to allow it to "validate the integrity of flight safety information" and restore its Notice to Air Missions system, which alerts pilots of potential hazards along their flight path.

Mortgage applications rose 1.2% to kick off 2023, according to the Mortgage Bankers Association of America. The rise in applications follows a 10.3% nosedive to wrap up 2022 - the biggest decline in three months.

Small business confidence in the US fell back to its June lows at the end of 2022, alongside declines in gauges for price pressures and hiring, the results of a survey showed, although salary pressure remained. The National Federation of Independent Business's small business optimism index slipped from a November reading of 91.1 to 89.8 in December.

Reporting by Sharecast.com staff and contributors.