Weekly review

The FTSE 100 ended the week down 274,59, or 3.65%, at 7,256.94.

Equity view

Coca-Cola HBC on Friday upgraded full year earnings guidance after a stronger than anticipated finish to the first half of the year. The soft-drink bottler said performance in June, "one of our most significant months, was very good overall". As a result, it expects to deliver strong organic earnings before interest and tax growth for 2023 of 9-12%, from prior guidance of the top end of a -3 to +3% range.

UK sportswear retailer JD Sports Fashion said it was buying the minority holding in Iberian Sports Retail Group currently held by Balaiko Firaja Invest and Sonar Holdings for €500.1m. ISRG currently operates more than 460 stores across Europe including JD in Iberia, Sprinter in Spain, Sport Zone in Portugal and Aktiesport and Perry Sport in the Netherlands.

CMC Markets said on Friday that chief financial officer Euan Marshall has resigned with effect from January 2024, to assume the position of CFO at IntegraFin. Over the next six months, Marshall "will remain focused on the effective and orderly handover of his responsibilities".

Shell warned of a significant decrease in its second-quarter gas trading results compared to the prior quarter on Friday. The revelation came after a similar one from US rival Exxon Mobil overnight, as Shell disclosed that it expected to record $3bn in writedowns for the quarter.

LondonMetric Property said it has sold five assets for £42.8m, reflecting a net initial yield of 4.5%, the company said on Thursday. The combined sales are in line with the 31 March 2023 book value.

Office provider Workspace reported a rise in first-quarter rents, driven by resilient demand. The company on Thursday said 260 new lettings were completed in the three months to June 30 with a total rental value of £7.0m a year.

Just Group said on Thursday that it has appointed Mark Godson as its new chief financial officer. Godson, who succeeds Andy Parsons, will join the board with effect from 1 January 2024.

Ukraine-based iron ore pellet producer Ferrexpo reported a jump in second-quarter production on Thursday. The company said total iron ore pellet production in the quarter was 1,066 million tonnes, up 18% on the previous quarter. For the first half, meanwhile, production was 1,967m tonnes, up 57% on the second half of 2022.

Keller Group upped its full-year earnings outlook on Wednesday, on the back of strong first half trading and a “robust” order book. The specialist geotechnical contractor said it expected to deliver a “record” first half performance. Combined with a “robust” order book, it now expects full-year underlying operating profits to be “materially” ahead of market expectations, although the increase in earnings was likely to tempered moderately by interest rate rises.

Topps Tiles reiterated its full-year guidance on Wednesday on the back of solid third-quarter trading. The tile specialist said total sales rose 4.4% in the third quarter, with sales up 7.6% in the 39 weeks to 1 July.

Shares in Sig fell sharply in early trading on Monday, after the building materials specialist warned that full-year profits would come in at the lower end of expectations. The UK group, which supplies specialist insulation and other building products across Europe, said group revenues in the six months to 30 June were flat on a like-for-like basis, at £1.4bn, with input price inflation offset by lower volumes.

Electricals retailer AO World reported a robust performance in its full-year results on Wednesday, as it made progress in its strategy to pivot the business towards profit and cash generation. The company said its revenue fell 17% year-on-year to £1.14bn, while adjusted EBITDA rocketed 102% year-on-year for the 12 months ended 31 March to £45m.

Hungary-based budget airline Wizz Air reported a 22.5% rise in passengers last month. The carrier on Tuesday said it carried 5,314,584 passengers at a load factor of 92.2%, up 6.1 percentage points.

Industrial thread maker Coats Group said on Tuesday that it has agreed to sell its European Zips business to Aequita, a German family office, for $1m. Coats said an exit from European zips is in line with its strategic initiatives, announced in March 2022, "to optimise the company's portfolio and footprint, and improve the overall cost base efficiency".

Road transport payments and mobility platform specialist Eurowag has exercised its call option to acquire an additional 18.01% stake in JITpay, it announced on Tuesday. The FTSE 250 company, officially called WAG Payment Solutions, described JITpay as a Germany-based payment service provider that specialises in digitalising billing, receivables management, and financing for the logistics sector.

Financial services provider OSB Group announced the completion of the latest repurchase of its own shares on Tuesday. The FTSE 250 company said that on 3 July, it purchased a total of 313,850 of its shares through the London Stock Exchange, CBOE CXE, and CBOE BXE, via Citigroup Global Markets as its broker.

IG Group said chief executive June Felix is taking a short period of medical leave from the business. Charlie Rozes, chief financial officer, will be taking over her day-to-day responsibilities as acting CEO, in addition to his current role, the derivatives trader added on Monday.

Vending machine company ME Group said it was buying Fujifilm’s automated-photobooth business in Japan for up to £5.5m. Formerly Photo-Me International, the company on Monday said the deal amount could reduce subject to an adjustment mechanism and expected to fund the transaction via a new local loan facility on “commercially advantageous terms” or existing cash resources if that was not secured.

Wood Group said on Monday that it has secured a $250m contract extension from Brunei Shell Petroleum, Brunei's largest energy producer. The two-year extension will focus on the continued rejuvenation of BSP's offshore energy asset portfolio to maximise production capacity and efficiency, it said.

UK IT group Kainos said it had bought US-based RapidIT-Cloudbera for an undisclosed sum. Established in 2017, RapidIT-Cloudbera is the creator of Genie, a workday-focused automated testing product.

Economic news

UK house prices fell in June at the steepest annual pace in 12 years as the mortgage crisis took its toll, according to figures released by Halifax on Friday. Prices declined by 2.6% following a 1.1% fall in May. This was the worst drop since June 2011 and leaves the average price of a UK home at £285,932, versus a peak of £293,992 last August.

UK retail footfall fell in June, industry research showed on Friday, as the heatwave kept shoppers at home. According to the latest BRC-Sensormatic IQ Footfall Monitor, total UK footfall fell by 1.9% in the five weeks to 1 July, although that was an improvement on May’s 2.8% decline.

Construction output fell sharply in June, a closely-watched survey showed on Thursday, as higher mortgage rates hit house building. The S&P Global/CIPS UK Construction Purchasing Managers’ Index came in at 48.9 in June, down from 51.6 in May and below consensus, for 51.0. It was the first time the index had registered below the neutral 50 threshold in five months.

The Competition and Markets Authority (CMA) issued a fine to Leicester City FC on Wednesday, after finding that the football club and retailer JD Sports had engaged in an arrangement that restricted competition in the sales of Leicester City-branded clothing, including replica kits. It said Leicester City FC, along with its parent companies, acknowledged its participation in the anti-competitive arrangement.

The recovery in the UK service sector lost momentum in June, a closely-watched survey showed on Wednesday, as rising interest rates weighed on demand. The latest S&P Global/CIPS UK services PMI business activity index came in at 53.7, still indicating growth but down on May’s 55.2. It was in line with both the flash estimate and consensus.

UK new car sales surged by 25.8% year-on-year in June, driven by solid demand for electric vehicles (EV) from firms and fleet buyers, according to industry figures released on Wednesday. New car sales rose to 177,266 units last month, the 11th month of consecutive growth, although volumes were still below 2019 pre-pandemic levels, the Society of Motor Manufacturers and Traders (SMMT) said.

The Financial Conduct Authority (FCA) has called on the chief executives of major banks to address concerns over the low savings rates being offered to customers, it emerged on Tuesday. According to the Financial Times on Monday evening, the city regulator had summoned top bankers from NatWest, Barclays, HSBC, and Lloyds to a meeting on Thursday to discuss the pricing of cash savings, and how banks communicate with their customers about rates.

The Financial Conduct Authority (FCA) issued a warning to home and motor insurers on Monday, urging them to improve their treatment of vulnerable customers and enhance their claims handling processes. In response to a surge in complaints regarding insurance claims, the FCA conducted a review that revealed instances of lengthy complaints handling times and inadequate settlements.

The Competition and Markets Authority (CMA) put forth a plan to help drivers access more competitive fuel prices on Monday, in a bid to address weakening competition in the retail petrol market. Its proposal included the introduction of a fuel finder scheme, which would provide drivers with real-time, station-by-station fuel prices on their smartphones or GPS navigation systems.

The downturn in the UK manufacturing sector deepened in June, according to data released on Monday. The S&P Global/CIPS manufacturing purchasing managers’ index declined to a six-month low of 46.5 from 47.1 in May. This marked the 11th month of contraction, although it was above the flash estimate of 46.2.

International events

Tightness in the US jobs market eased during the previous month, as companies took on the fewest workers since December 2020. In seasonally adjusted terms, the Department of Commerce reported a 209,000 person increase in hiring. Economists had forecast a reading of 200,000.

German May industrial production fell by more than expected in a further sign that a key sector of Europe's biggest economy was stagnating. Industrial production fell by 0.2% month-on-month, and from expectations of a 0.1% fall. On a yearly basis industrial production was up by 0.7% but still 5% below pre-Covid pandemic levels.

The number of job openings at US companies fell further in May, yet Americans were confident enough to risk switching jobs at an increased pace. According to the Department of Labor, in seasonally adjusted terms, the number of job openings fell at a month-on-month pace of 4.8% to reach 9.824m.

Jobless claims in the US rose as expected during the previous week. According to the Department of Labor, in seasonally adjusted terms, initial unemployment claims increased by 12,000 to reach 248,000 during the week ending on 1 July. Economists had pencilled in a rise of 245,000.

Layoff announcements in the States fell sharply last month with job cuts slowing especially sharply among automotive, entertainment and technology companies, the results of a closely followed survey showed. According to Challenger, Gray, & Christmas, US-based firms unveiled 40,709 new job cuts in June.

Hiring in America's private sector surged last month, the results of a survey showed. Consultancy ADP reported a 497,000 surge in hiring for the month of June. Economists polled by Dow Jones Newswires had anticipated a rise of 220,000.

Eurozone retail sales stagnated in May, European Union statistics agency Eurostat said on Thursday, with higher spending on non-food items offsetting falls foodstuffs and petrol. Retail sales volumes in the single currency bloc were unchanged from April and 2.9% lower year-on-year. Economists had forecast a 0.2% monthly rise and a 2.7% annual decline.

The eurozone construction sector contracted at a stronger pace at the end of the second quarter of 2023 according to the latest S&P PMI survey data, as overall activity and new orders fell at the steepest rates in the year so far. The eurozone construction total activity Index — a seasonally adjusted index tracking monthly changes in total industry activity — fell slightly from 44.6 in May to signal a reduction in overall construction activity for the fourteenth consecutive month.

China post-Covid pandemic recovery showed more signs of slowing on Wednesday as a private sector survey showed services activity expanded at its slowest pace in five months in June. The Caixin/S&P Global services purchasing managers' index (PMI) fell to 53.9 in June from 57.1 in May, the lowest reading since January.

Germany's seasonally adjusted trade surplus fell to €14.4bn in May, from a revised €16.5bn and well below the consensus of €17.5bn, according to official data published on Tuesday. Exports in May rose 0.1% month-on-month, but were down 0.7% on an annual basis. Imports increased 1.7% compared with April, contributing to a narrower trade balance.

Reporting by staff and contributors for Sharecast.com.