Weekly review

The FTSE 100 ended the week down 163 points, or 2.14%, closing at 7,461.93 on Friday.

Equity view

Promotional merchandise maker 4imprint Group said it expected annual earnings to be slightly above forecasts after a strong trading performance during 2023. Group revenue was forecast to rise 16% to $1.33bn with pre-tax profit of at least $140m, slightly above the upper end of the current range of analysts' forecasts and 2022’s $104m.

Sébastien de Montessus, the former chief executive of Endeavour Mining who was abruptly sacked earlier this month for serious misconduct, is to miss out on $17.6m in bonuses and share awards, the FTSE 100 miner announced late on Thursday. Furthermore, the company said it is clawing back an additional $11.5m in share awards and bonuses paid in respect of the past three years' service.

Takeaway delivery company Deliveroo said annual earnings would be "slightly" ahead of guidance, with gross transaction value (GTV) up 7% year on year in the UK and Ireland, despite the cost-of-living crisis. Adjusted core earnings were previously guided to be in a range of £60 – 80m. Total GTV, a key metric of total order sizes, rose 3%, in line with forecasts, to £7bn as customers continued to order in meals.

Furniture retailer DFS has held on to full-year profit guidance despite a slight drop in first-half orders, as gains in market share and cost management has mitigated "challenging" trading conditions. However, the company did lower its revenue forecasts for the full year to June 2024, pointing to sales of £1,020m-£1,040m, down marginally from September's guidance of £1,060m-£1,080m, due to "weaker-than-expected demand". That's down from the £1,089m of sales generated last year.

Sainsbury has announced a "phased withdrawal" from its banking operations as it continues to pursue its so-called 'Food First' strategy. The supermarket giant said that, following a strategic review of the Financial Services (FS) division, FS products will now be offered through dedicated FS providers through a distributed model, like it already does with its insurance products.

Australia’s BHP Group said it may have to write down the value of its nickel operations after a price slump in the commodity. Prices fell last year after an increase in supply from Indonesia. Nickel is a key product used in manufacture of electric car batteries.

Electricals retailer Currys said on Thursday that full-year profit was set to be ahead of consensus expectations despite reporting a drop in sales. In an update for the 10 weeks to 6 January, the retailer said group sales declined by 4%, with sales in the UK and Ireland down 3%, while the international segment saw a 6% fall. The Nordics and Greece saw sales fall 6% and 4%, respectively.

Meat producer Cranswick said on Thursday that adjusted pre-tax profit for the year to the end of March 2024 was set to be ahead of the board’s previous expectations after stronger-than-expected trading in the third quarter. In an update for the 13 weeks to 23 December, the company said the strong revenue and earnings growth seen in the first half of the year had continued through the start of Q3. Trading during the quarter and particularly the key Christmas period was stronger than anticipated, it said.

BP has named its former chief financial officer Murray Auchincloss as its permanent chief executive, after having served in an interim capacity for the past four months. Auchincloss, who has been part of BP since its merger with Amoco in 1998, had been CFO since July 2020 until September 2023 when he took over the helm following the abrupt departure of former CEO Bernard Looney, who resigned after failing to disclose personal relationships with colleagues.

Copper miner Antofagasta on Wednesday said annual production rose 2% to 660,600 sonnes, on higher output at its Los Pelambres operation in Chile, due to improved water availability from its desalination plant. Fourth-quarter group production was 191,500 tonnes, 10% higher than the previous three months, primarily related to production increases at both Los Pelambres and the Centinela mine.

Distribution group Diploma has hailed a "strong start" to its financial year as recent acquisitions helped revenues rise by a tenth. The company, which operates three divisions which comprise Controls, Seals and Life Sciences, said acquisitions accounted for 8% of the reported 10% revenue growth in the three months to 31 December, slightly offset by a 4% impact from foreign exchange.

Just Eat Takeaway said on Wednesday that 2023 core profit was set to be ahead of guidance, following a strong fourth-quarter performance in Northern Europe and the UK and Ireland. Adjusted earnings before interest, taxes, depreciation and amortisation are expected to be around €320m, ahead of previous guidance for approximately €310m.

Anglo-Australian mining giant Rio Tinto on Tuesday reported a rise in annual iron ore shipments as a ramp up of production at its Gudai Darri mine in Western Australia offset mine depletion. Shipments in 2023 were up 3% to 331.8 million metric tons, the mid-point of its guidance of 320 - 335 Mt and in line with analysts forecasts.

Vodafone has signed a 10-year strategic partnership with American software giant Microsoft which will see the UK-listed telecoms group invest $1.5bn over the next decade. The deal will "bring generative AI, digital services and the cloud to more than 300 million businesses and consumers", Vodafone said in a statement on Tuesday.

Experian has narrowed its full-year targets to the upper end of guidance after a strong third quarter with revenue growth accelerating from the first half. The data analytics and consumer credit reporting company said total revenues from ongoing activities were up 9% year-on-year in the three months to 31 December, up from 6% at the half-year stage.

Qinetiq backed its full-year expectations on Tuesday as it announced plans to launch a share buyback of up to £100m. In an update for the third quarter, the defence and security firm said it delivered a good operational performance, with continued organic revenue growth and operating profit margin in line with its expectations.

Home construction company Crest Nicholson has delivered a profit warning as a result of higher-than-expected costs as it announced an additional one-off charge from a legal claim. The group said that adjusted pre-tax profit for 2023 is now expected to be £41m, lower than the £45-50m range given in November. That would mark a 70% reduction from £137.8m in 2022.

Bakkavor has announced a board change after hedge fund Baupost sold its stake in the food manufacturing group to private equity firm LongRange Capital. Baupost, which had held over 116m shares in Bakkavor equal to a 20.1% stake, last week offloaded the shareholding to LongRange.

Avon Protection said on Monday that it has been selected by the German Navy to supply its multi-role rebreather for military diving operations.   The multi-million euro order includes the supply of Avon's rebreather and ongoing technical support. 

Specialist asset manager Ashmore Group reported an increase in its assets under management (AuM) for the quarter ended 31 December on Monday. The company said its AuM grew $2.3bn during the period, driven by positive investment performance, which contributed $3.9bn, partially offset by net outflows of $1.6bn.

Economic news

UK retail sales fell at the fastest pace since the start of 2021, official data showed on Friday, missing analyst expectations. According to the Office for National Statistics, retail sales volumes declined 3.2%, reversing an upwardly revised 1.4% increase in November.

The UK housing market showed signs of stabilising on Thursday, as mortgage rates continued to ease. According to the latest UK Residential Market Survey from the Royal Institution of Chartered Surveyors, the net balance of respondents reporting a rise in house prices over the three months to December was -30.

UK inflation unexpectedly edged higher in the year to December, driven by a rise in alcohol and tobacco prices, and tempering rate cut expectations. According to the Office for National Statistics, the consumer price index rose to 4% from 3.9% in November, versus expectations for a drop to 3.8%. This marked the first jump in inflation since February 2023.

UK wage growth eased in the three months to November, while the unemployment rate was unchanged, according to figures released on Tuesday by the Office for National Statistics. Total pay including bonuses rose 6.5%, down from 7.2% in the previous three-month period and in line with consensus expectations.

Train drivers' union Aslef announced a new round of strikes on Monday, in its ongoing pay dispute with 16 train operators. The strikes were scheduled to take place between 30 January and 5 February, with drivers at different operators walking out on different days.

International events

German producer prices fell sharply in December, office data showed on Friday, by more than expected. According to Destatis, the Federal Statistical Office, producer prices of industrial products were 8.6% lower year-on-year last month, compared to November’s 7.9% decline.

Japanese inflation slowed in December to its lowest in 17 months, according to figures released late on Thursday by the government, as energy prices fell and upwards pressure on core consumer prices eased. The consumer price index (CPI) for last month was 2.6% higher than December 2022, slowing from the 2.8% inflation rate seen in November, as food price inflation slowed to a 14-month low of 6.7% from 7.3%.

The Philadelphia Federal Reserve's manufacturing index rose 2.2 points in January to a reading of -10.6, an 18th negative reading in the past 20 months, worse than market estimates for a print of -7. The indices for current new orders and current shipments both rose in January but also remained in negative territory, with the new orders index rising from -22.1 to -17.9, and the shipments index increasing five points to -6.2.

Car sales in Europe fell year-on-year in December after 16 straight months of growth with new battery-electric car sales declining for the first time since the onset of the Covid pandemic. New car registrations across the European Union totalled 867,052 last month, 3.3% below December 2022, which the European Automobile Manufacturers’ Association (ACEA) put down to a strong baseline comparator the year before.

US housing starts in the US fell less than expected in December while building permits rose strongly, according to data released on Thursday by the Census Bureau. On a seasonally adjusted annual rate, privately‐owned housing starts fell 4.3% over the month to 1.460m, reversing sharply after 10.8% growth in November.

Americans lined up for state assistance at a decelerated pace in the week ended 18 January, according to the Labor Department. Initial jobless claims fell by 16,000 week-on-week to 187,000 for the lowest reading since September 2022 and well below market expectations for a print of 207,000.

Construction output in the eurozone fell again in November, registering its biggest annual drop in nearly three years, according to data released on Thursday by Eurostat. Seasonally adjusted production in the construction sector decreased by 1.0% during the month of November, with the downturn accelerating from a revised 0.6% in October.

OPEC reaffirmed its projection of robust growth in global oil demand for 2024 on Wednesday, as well as offering an early outlook for 2025, highlighting China and the Middle East as the driving forces behind the surge. In its monthly report, the Organization of the Petroleum Exporting Countries said global oil demand was expected to increase by 2.25 million barrels per day in 2024 - a figure consistent with last month's forecast.

China’s economy continued to struggle at the end of last year as it recorded another decline in population and fourth-quarter gross domestic product expanded at 5.2%, just missing estimates of 5.3%. The population fell to 1.4 billion in 2023, with 11 million deaths and 9 million births as the impact of China’s “one-child” policy continued to filter through and add to pressures from deflation and a property sector slowdown.

The New York Empire State manufacturing index fell to -43.7 in January, according to the Federal Reserve, the lowest reading since May 2020, pointing to a sharp drop in manufacturing activity in the state. New orders fell to -49.4 and shipments dropped to -31.3, down from -11.3 and -6.4, respectively, while unfilled orders continued to shrink significantly. Delivery times shortened to -8.4 from -15.6, inventories edged lower to -7.4 from -5.2, while employment and the average workweek declined modestly.

German business sentiment improved in January, according to a survey released on Tuesday by the ZEW Center for European Economic Research in Mannheim. The headline ZEW investor expectations index rose to 15.2 from 12.8 in December, coming in above consensus expectations for a reading of 12.0.

German inflation rose in December to 3.8%, in line with preliminary data, the federal statistics office said on Tuesday. Excluding volatile food and energy prices the consumer price index rose 5.1% on an annual basis. Food prices rose 12.4% year on year., while energy prices were up 5.3% compared to the same period last year.

Eurozone industrial production fell 0.3% in November on a monthly basis, as the single currency bloc continued to struggle amid inflationary pressures, according to official data published on Monday. On an annual basis, industrial output fell by 6.8% in the eurozone and 5.8% in the 27-member European Union, the bloc's statistics agency Eurostat said on Monday.

The German economy contracted in 2023 as price pressures impacted economic activity, according to the first calculations of the Destatis, the country's federal statistical office. Price-adjusted gross domestic product fell by 0.3% last year, marking the first contraction since the Covid-impacted year of 2020, Destatis said on Monday. The outcome was in line with analysts' forecasts.

The People’s Bank of China surprised markets on Monday by keeping its one-year medium-term lending facility on hold at 2.5%. Analysts were expecting the Bank to announce a 10 basis points cut to 2.4%.

Reporting by Sharecast.com staff and contributors.