Weekly review

The FTSE 100 ended the week down 97.19 points, or 1.18%, closing at 8,155.72 on Friday.

Equity view

A joint venture half-owned by Segro has sold a portfolio of logistics warehouses in Italy for €327m (£275m), the company said on Friday. The portfolio consists of four warehouses, two located in Milan and two in Rome, and has a total floor space of 338,745 sq m generates a passing rent of €19m.

The deadline for a potential £5.4bn takeover of Hargreaves Lansdown has been pushed back, the fund supermarket confirmed on Friday. The FTSE 250 firm said last month it was minded to recommend a 1,140p per share offer from a private equity consortium led by CVC Capital Partners, after it rejected an earlier approach.

United Utilities Group reported sustained strong operational performance in an update on Friday, affirming its financial guidance for the 2024-2025 period remained unchanged. The FTSE 100 water company expressed confidence in achieving a four-star rating from the Environment Agency's annual environmental performance assessment (EPA) for 2023, with official confirmation expected soon.

Virgin Money UK announced on Friday that its has received unconditional approval from the Competition and Markets Authority (CMA) for its acquisition by Nationwide Building Society. The FTSE 250 bank and Nationwide initially agreed to the terms of the recommended cash acquisition on 21 March, involving Nationwide purchasing the entire issued and to-be-issued share capital of Virgin Money through a scheme of arrangement.

Private equity and infrastructure investment firm 3i Group said it had an "encouraging start" to the new financial year, with net asset value (NAV) rising 4% over the first quarter. NAV per share totalled 2,167p by 30 June, up from 2,085p on 31 March, despite a negative FX translation impact of £113m or 12p per share.

Self-storage specialist Big Yellow reported a rise in like-for-like revenue for the first quarter, despite a slight fall in occupancy, as demand momentum continued. The company on Thursday said like-for-like sales for the three months to June 30 were up 4% to £49.1m. Closing occupancy was down 0.6 percentage points to 82.4%.

Mike Ashley’s Frasers Group posted annual profits at the top of guidance on Thursday, despite a dip in revenues. The FTSE 100 retailer, which owns Sports Direct, House of Fraser and Evans Cycles, among others, said group revenues in the 52 weeks to 28 April fell 0.9% to £5.5bn.

Distribution group Diploma on Thursday held guidance as revenue grew 13% in the nine months to June 30. Organic revenue growth in the year to date rose 6%, driven by volume-led growth across the group, the company said in a brief trading statement.

Multinational consumer goods group Reckitt Benckiser on Wednesday forecast a short-term hit to sales in the US after a said a key warehouse for its Mead Johnson Nutrition business was put out of action by a tornado on July 9 which caused "significant" damage. The company on Wednesday said the warehouse in Mount Vernon, Indiana "is an important site for the Mead Johnson business, containing a mix of raw materials and finished products".

HSBC has announced that its finance chief George Elhedery will move into the chief executive officer position in September, replacing outgoing boss Noel Quinn. Elhedery, who joined HSBC in 2005 and was appointed chief financial officer in January 2023, will be the bank's third CEO over the past years.

Rio Tinto has appointed Katie Jackson from National Grid to lead its copper business, succeeding Bold Baatar who is moving up to become chief commercial officer at the mining giant later this year. Jackson is currently president of National Grid Ventures, responsible for the development and operation of large-scale infrastructure energy assets. She will join Rio on September 1 and be based in London.

Mitie said on Wednesday that it has agreed to buy ESM Power, a high voltage electrical engineering business specialising in grid and power connections, for up to £8.5m. The consideration comprises an initial payment of £5.5m and performance-linked deferred payments of up to £3m over two years.

Precision measurement tools group Spectris is spending $630m to buy US-based Micromeritics Instrument Corporation to bolster its offering in particle characterisation for advanced materials analysis. Micromeritics, headquartered in Norcross, Georgia, is said to be a high-growth, high-margin business which will be immediately accretive to Spectris's earnings and highly complementary to the Malvern Panalytical division.

Vanquis Banking Group warned on Tuesday that it does not expect to meet its FY24 guidance of low single digit return on tangible equity due to additional write-downs. In an update ahead of its results for the six months to 30 June, the company said it has been carrying out a comprehensive review of its balance sheet which has led to the revaluation of some historic balances.

Mining giant Rio Tinto said it was starting to see a "step-change" in production with output of iron ore, bauxite and aluminium all growing in the second quarter, though iron ore shipments were worse than expected due to a train derailment during the period. Iron ore shipments from the company's projects in the Pilbara region of Western Australia totalled 80.3m tonnes during the three months to 30 June, up 3% on the first quarter but short of the 82.1Mt consensus forecast.

Global money transfer service Wise has reported a rise in customer numbers and volumes as it continued to cut transaction fees. The company, which offers low-cost transfers and banking in multiple currencies, said active customers grew 6% year on year to 8.4 million, driven by strong retention and new clients joining as a result of recommendations.

Recruitment company Robert Walters saw a continued decline in net fee income in its second quarter as it continues to battle with "muted" client and candidate confidence, saying that challenging market conditions are lasting longer than initially expected. Net fee income for the three months to 30 June was 12% lower than last year in constant currency at £84.8m, with sharp declines across all major regions.

Baltic Classifieds said on Monday after Antler, which is controlled by funds advised by Apax, has sold off its remaining 13% stake in the company in a placing. Antler sold around 63 million shares at 247p each, raising gross proceeds of approximately £156m. The sale comprised around 59m ordinary shares sold by Antler to institutional investors, which raised about £146m and 4.2m ordinary shares sold by Antler to the company, raising gross proceeds of about £10m.

Instant-service equipment specialist ME Group International reported a robust set of interim results on Monday, with a 4.6% increase in revenue to £150.4m and an 11.1% rise in EBITDA to £51.2m. The FTSE 250 company said profit before tax climbed 10.3% to £30m for the six months ended 30 April, driven by strong performances in the company's core laundry and photobooth segments, despite adverse foreign currency effects.

Gore Street Energy Storage Fund reported a strong set of audited results for the financial year ended 31 March on Monday, with robust revenue generation, increased operational capacity, and a solid balance sheet. The London-listed company’s net asset value (NAV) stood at £541m as of the end of March, translating to a NAV per share of 107p, down from 115.6p a year earlier. That represented a NAV total return of 48.4% since its initial public offering.

Economic news

Consumer confidence remained subdued in July, a long-running survey showed on Friday, as people adopted a "wait and see" approach following the general election result. The latest consumer confidence index from GfK was -13, up just one point on June. Within that, people’s perception of their personal finances over the year improved two points, to -8. But perceptions about their finances going forward eased one point, to 3.

UK retail sales fell by more than expected in June, official data showed on Friday, partially reversing May’s jump. According to the Office for National Statistics, retail sales volumes fell 1.2% last month, compared to a 2.9% rise in May. Most analysts had pencilled in a far smaller decline, of around 0.4%.

Public sector borrowing came in higher than expected in June, official data showed on Friday. According to the Office for National Statistics, government borrowing – the difference between public sector spending and income – was £14.5bn, excluding public sector banks. That was £3.2bn less than June 2023, and the lowest June borrowing figure since 2019.

The Bank of England said on Thursday that its CHAPS service has been hit by a global payments issue, delaying some high value and time-sensitive payments, including house purchases. "We are mindful of the impact this is likely to have and are working closely with a third party supplier, industry and other authorities to resolve the issue as promptly as possible," the BoE said.

UK wages grew at their slowest pace in nearly two years in the three months to May, according to figures released on Thursday by the Office for National Statistics. Annual pay excluding bonuses was up 5.7%, down from 6% growth in the previous three-month period. This was in line with economists’ expectations and marked the slowest pace of growth since September 2022. Including bonuses, total earnings rose 5.7%, down from 5.9% and also as expected.

The annual increase in UK house prices accelerated sharply in May, while rent inflation stayed close to multi-year highs, according to the latest data released on Wednesday by the Office for National Statistics. The ONS said that home prices averaged £285,000 across the UK in May, up 2.2% on May 2023, picking up from the 1.3% revised growth registered in the 12 months to April. This was the third straight month of annual increases following eight consecutive months of falling prices.

UK inflation was unchanged in June, official data showed on Wednesday, in line with the Bank of England’s target. According to the Office for National Statistics, the consumer price index grew by 2% in the year to June. Some analysts had expected it to soften slightly, however, to 1.9%.

Take-home sales at supermarkets rose by 2.2% over the four weeks ended 7 July, according to fresh industry data released on Tuesday, driven by summer events and evolving consumer preferences. The men's UEFA European Football Championship significantly influenced the increase, according to Kantar, with fans purchasing more beers, crisps and snacks on matchdays.

Ofwat announced on Tuesday that it was expanding its investigation into how water companies manage their wastewater treatment works and networks to include United Utilities and Severn Trent. The regulator has also served formal notices on Dŵr Cymru Welsh Water and Hafren Dyfrdwy.

UK house prices dipped in July, industry data showed on Monday, as the general election, international sporting events and the start of the summer holidays unsettled the market. According to the latest house price index from Rightmove, house prices eased 0.4% in July month-on-month, compared to June, when growth was flat. On an annual basis, prices ticked up 0.4%. The national average asking price now stands at £373,493.

International events

A major outage caused by a software update from cybersecurity firm Crowdstrike on Friday has led to Microsoft systems crashing at businesses around the world, including airlines, banks, hospitals and the London Stock Exchange's Regulatory News Service. After hours of confusion, Crowdstrike chief executive George Kurtz said customers had been "impacted by a defect found in a single content update for Windows hosts".

Americans lined up for unemployment benefits at an accelerated pace in the week ended 13 July, according to the Labor Department. Initial jobless claims rose by 20,000 to 243,000, above market expectations for a print of 230,000 to register a fresh weekly high, indicating that the US labour market continued to soften throughout the period.

Euro area monetary policy makers kept rates unchanged on Thursday while keeping the door open to a possible rate cut in September. But its bias appeared to be one of caution. In its policy announcement, the ECB said: "While some measures of [underlying inflation] ticked up in May owing to one-off factors, most measures were either stable or edged down in June."

Manufacturing activity in Philadelphia rose to a three-month high in July, with new orders and shipments rising to their highest levels in more than two years, according to data released by the region's Federal Reserve Bank on Thursday. The index for general activity in July's Manufacturing Business Outlook Survey increased to 13.9 this month with 39% of firms reporting growth in activity, compared with 25% reporting decreases and 29% experiencing no change.

Construction output in the eurozone declined for the third month in a row in May, with the annual change showing its steepest rate of decline in more than three years, according to figures released on Thursday by Eurostat. Construction output was down 0.9% over the month, worsening from the 0.4% decline in April, as building construction fell 1.0%, civil engineering production slipped 0.6% and specialised construction activities decreased 1.1%.

Industrial production in the States jumped in June, led by a surge in output from utilities. According to the Department of Commerce, in seasonally adjusted terms industrial output was ahead by 0.6% month-on-month. Economists had pencilled in a rise of 0.3%.

Homebuilding activity in the US picked up last month, but the details of the report were not as strong as it might appear at first hand. According to the Department of Commerce, in seasonally adjusted terms the number of housing starts grew at a month-on-month pace of 3.0% in June to reach an annual rate of 1.353m. Economists had forecast 1.31m.

Inflation in the eurozone fell to 2.5% in June from 2.6% in May, in line with the flash estimate published on July 2, according to official data published on Wednesday. The figure compares with a rate of 5.5% a year ago. Across the entire European Union annual inflation was 2.6% in June 2024, down from 2.7% in May. A year earlier, the rate was 6.4%.

The International Monetary Fund has lifted its estimate for economic growth next year but warned that inflationary pressures have increased, meaning central banks will likely have to keep interest rates elevated for longer. In its quarterly World Economic Outlook report, the IMF held its projection for global GDP growth this year at 3.2% but now expects economic activity to expand by 3.3% in 2025, up from its April forecast of 3.2% growth.

Retail sales in the United States were unchanged in June, according to the Census Bureau, in line with economists' expectations. The advance estimate of total monthly sales was $704.3bn last month, more or less flat on May's revised total of $704.5bn, which was 0.3% higher than April. However, compared with June 2023, sales were up 2.3%, slowing from the 2.6% annual growth seen in May.