Weekly review

The FTSE 100 ended the week down 6.61 points, or 0.08%, closing at 8,168.10 on Friday.

Equity view

Hargreaves Lansdown posted record assets under administration and a big increase in net new business for the full-year. The investment platform said that total assets under administration jumped by 16% to reach £155.3bn over the year ending on 30 June, while net new business flows increased by £4.2bn or 13% less than one year earlier.

UK house builder Bellway on Friday said it expected to return to growth in fiscal 2025 if market conditions remain stable, with signs of an upturn in the market after the recent cut in interest rates. The company said total housing completions fell to 7,654 homes in the year to July 31 from 10,945 a year ago at an overall average selling price of around £308,000 compared with £310,306 in 2023 - both slightly ahead of previous guidance.

Georgia-based TBC Bank reported robust second-quarter and first-half results on Friday, with significant year-on-year growth in profits and returns on equity (ROE). The FTSE 250 company said its second-quarter net profit reached GEL 329m (£95.64m), a 12% increase compared to the same period last year, with a return on equity of 27.1%.

Investment trust The Renewables Infrastructure Group said on Friday that its net asset value had fallen in the six months ended 30 June as lower prices and soft energy generation impacted its overall performance. The Renewables Infrastructure Group stated that net asset values had dropped from 127.7p to 123.4p in H1, principally due to lower near-term power price forecasts, lower forecast inflation and power generation that was 7% below budget.

Events organiser Ascential said it had signed a deal to buy the commercial assets of advertising awards owner Effie for an undisclosed sum. Effie will join Ascential's LIONS Division, which runs the Cannes Lions event - known as the Oscars of the ad business. The deal comes two weeks after sector giant Informa said it was buying rival Ascential for £1.16bn.

Real estate firm Savills held annual guidance as it reported a sharp jump in interim profits amid signs of a global recovery, although major markets were still "subdued". Pre-tax profits for the first six months of the year surged 48% to £9m as revenue rose 5% to £1.06bn.

Britain's competition regulator said its phase 1 review into Barratt's £2.5bn deal to buy smaller house builder Redrow had raised concerns around one Barratt development. The Competition and Markets Authority (CMA) said it was concerned about the development in Whitchurch, which includes nearby towns such as Nantwich, Ellesmere and Market Drayton.

Recruiter PageGroup posted a slump in first-half profit on Thursday as revenue fell in "challenging" market conditions. In the six months to the end of June, pre-tax profit tumbled 56.2% to £27.7m, with revenue down 13.1% at £898m. Basic earnings per share fell 61% to 5.3p.

Property portal Rightmove has announced that it is recruiting an internal replacement for its outgoing chief financial officer. Alison Dolan, who announced in May she was jumping ship to join Marks & Spencer, will be succeeded by Ruaridh Hook, currently head of commercial finance and financial planning and analysis.

Coca-Cola HBC, the UK-listed anchor bottler for the American beverage giant, has upgraded its guidance for 2024 after a strong first half with solid revenue growth and market share gains. The Switzerland-based bottler said it now expects organic revenue growth of 8-12% this year, ahead of its previous mid-term target range of 6-7%, while earnings before interest and tax are tipped to rise by 7-12%, above the previous 3-9% range.

Wealth management firm Quilter posted record interim adjusted profits on Wednesday as net inflows bounced back amid a recovery in global equity markets throughout the half.Quilter said adjusted pre-tax profits had surged 28% to £97.0m in the six months ended 30 June, while operating margins rose five points to 29%. Assets under management increased 7% to £113.8bn.

Financial services and asset management group Legal and General on Wednesday posted interim operating profit that beat analyst forecasts, driven by higher annuity sales. The company said profit for the half rose 1% to £849m, better than analyst forecasts of £834m and added that it expected 2024 core operating earnings to grow by mid-single digits year-on-year. It also lifted its interim dividend by 5% to 6p a share.

Crowne Plaza, Regent and Holiday Inn owner InterContinental saw its bottom line shrink by 10% in the first half due to the planned reduction of its so-called System Fund surplus, though underlying profits improved by 12% due to solid margin improvements and an acceleration in RevPAR growth in the second quarter. Reportable revenues rose 7% year-on-year to $1.11bn in the six months to 30 June, while gross revenues – which include revenues generated by franchised, managed and owned/leased hotels – improved by 6% to $16.1bn.

Abrdn beat analysts' estimates for revenues and profit at the half-year stage. Management also sounded an upbeat note on the outlook and the scope for cutting costs. Furthermore, according to abrdn boss, Jason Windsor, "in the first half of the year we have made an encouraging start as we become more efficient, and we enhance our propositions to lay the foundations for growth.

Travis Perkins posted a drop in first-half profit on Tuesday as it pointed to continued weak demand across its end markets and cut its profit outlook for the full year. In the six months to 30 June, adjusted operating profit fell 33% to £75m, while pre-tax profit was down to £15.6m from £85.7m. Revenue declined 4.4% from the same period a year earlier to £2.36bn.

GSK was upbeat after securing a legal victory in a case in the ongoing litigation surrounding its discontinued heartburn drug Zantac. The FTSE 100 pharmaceuticals giant said a jury in an Illinois state court ruled in its favour, finding it not liable for a plaintiff's colorectal cancer.

Shipping services firm Clarksons reiterated its expectations for the full year on Monday even as it posted a drop in interim profit and revenue. In the six months to 30 June, underlying pre-tax profit fell to £51.5m from £53.1m in the same period a year earlier, with revenue down to £310.1m from £321.1m.

Societe Generale said on Monday that it has agreed to sell its Swiss and UK private banking arms to Union Bancaire Privée (UBP), a Swiss bank specialised in wealth and asset management, for around €900m (£770.50m). The sale is part of the execution of the French bank’s "strategic roadmap targeting a streamlined, more synergetic and efficient business model, while strengthening the group’s capital base".

Senior reported what it called a “robust” set of interim results on Monday, despite mixed performances across some metrics. The FTSE 250 engineering solutions provider saw revenue increase 4% year-on-year to £504.1m in the six months ended 30 June, supported by strong trading performance and a growing order book with a book-to-bill ratio of 1.15.

UK Oil & Gas tumbled on Monday after it conditionally raised gross proceeds of £1m in a discounted share placing to fund hydrogen storage projects. The shares were placed at 0.05p each, which is a discount of about 37% to the closing share price on 2 August. The company said it also plans to offer its existing retail shareholders a retail offer of new ordinary shares at the same issue price as the placing.

Economic news

The UK house sales market turned a "bit sunnier" last month, according to the latest UK Residential Survey by the Royal Institution of Chartered Surveyors (RICS), with near-term sales expectations now at their strongest in four and a half years. The monthly RICS survey found that falling mortgage rates during July improved positivity in the sector, with net new buyer enquiries picking up 2%, after a 6% drop in June. This was the first time in four months that buyer numbers have grown.

Ofwat said on Wednesday that it was looking to appoint a monitor to report on Thames Water’s progress in turning the business around after the water company lost two investment grade credit ratings. Thames Water’s credit rating was downgraded by Moody’s on 24 July and by Standard & Poor’s on 31 July.

UK house prices rose in July after three flat months, according to figures released on Wednesday by Halifax. Prices were up 0.8% on the month, coming in comfortably ahead of expectations for 0.3% growth. On the year, house prices rose 2.3% in July following a 1.9% increase in June. This marked the highest annual growth rate since January 2024.

Activity in the UK construction sector grew in July at the fastest pace in 26 months, according to a survey released on Tuesday. The headline S&P Global UK construction purchasing managers’ index rose to 55.3 from 52.2 in June. This marked the fastest rate of expansion since May 2022. A reading above 50.0 indicates growth, while a reading below signals contraction.

Thames Water, Yorkshire Water and Northumbrian Water were all the subjects of Ofwat's ire on Tuesday as the water regulator looks to clean up the industry amid historic sewage spills. The trio will face a total of £168.0m in fines as it launches its largest-ever proposal into water company performance as public outrage grows over the environmental and financial performance of many of the industry's biggest names, with many Britons complaining that money from their bills is not being sufficiently invested in upgrades.

UK retail sales returned to growth last month, following a slight dip in June, as increased food purchases and improved weather gave consumer spending a boost. According to the latest BRC-KPMG retail sales monitor, total retail sales were up 0.5% on last year in July. This was against a solid comparative of +1.5% in July 2023 and followed a 0.2% annual decline in sales in June.

Growth in the UK services sector accelerated in July, with the strongest upturn in demand since May 2023, according to a survey released on Monday. The S&P Global services PMI business activity index edged up to 52.5 from 52.1 in June, coming in a touch higher than the flash estimate of 52.4 and marking the first time since April that growth has accelerated.

International events

German inflation rose to 2.6% in July, according to official data published on Friday, confirming flash data. Consumer prices in Europe's biggest economy, harmonised to compare with other European Union countries, had risen by 2.5% year-on-year in June.

Consumer price inflation accelerated more than expected in July, according to figures released on Friday by the National Bureau of Statistics. The consumer price index ticked up to 0.5% year-on-year, from 0.2% in June, coming in ahead of consensus expectations of 0.3% growth. On a monthly basis, CPI was up 0.5% in July following a 0.2% decline a month earlier and versus expectations of 0.3% growth.

Americans lined up for unemployment benefits at a decelerated pace in the week ended 3 August, according to the Labor Department. Initial jobless claims fell by 17,000 to 230,000, below market expectations for a print of 240,000, easing from their post-Covid peak but remaining significantly above this year's average. Continuing claims increased by 6,000 to 1.875m, while the four-week moving average, which aims to strip out week-to-week volatility, increased by 2,500 to 240,750.

Industrial production in Germany jumped in June, led by a partial rebound in output from the auto sector. In calendar and seasonally adjusted terms, total output advanced at a month-on-month pace of 1.4%, according to Destatis. Economists had pencilled in a rise of 0.9%.

Bank of Japan deputy governor Shinichi Uchida said the central bank would not lift interest rates when the markets are unstable, in response to this week's volatility that saw a massive sell-off in equities. The yen weakened by more than 2% against the dollar while bond futures rose and equities rallied after Uchida's comments.

The US trade deficit narrowed in June, pulling back from its highest level in 20 months, according to the Bureau of Economic Analysis, but still came in above market forecasts. The goods and services trade balance was -$73.1bn, $1.9bn less than the revised -$75.0bn in May which was the highest deficit recorded since October 2022, the BEA reported on Tuesday. However, this was still slightly higher than the -$72.4bn consensus estimate.

An already deep downturn in euro area construction intensified slightly more last month, the results of a survey revealed. The HCOB Purchasing Managers' Index for the sector dipped from a reading of 41.8 for June to 41.4 in July. That marked the quickest pace of decline in activity for six months and was led by a "robust" drop in new business.

Retail sales inside the single currency bloc slipped by a tad more than expected in June. According to Eurostat, in seasonally adjusted terms, retail sales volumes in the single currency bloc fell at a month-on-month clip of 0.3% in June (consensus: -0.1%). Sales of food, drinks and tobacco dropped 0.7%, while non-food sales edged lower by 0.1%.

Factory orders in Germany in June rose for this year, smashing forecasts following a decline the previous months, according to data from the Federal Statistical Office on Tuesday.Orders were up 3.9% over the month, Destatis reported, well ahead of the 0.8% increase expected by economists. This was the first monthly increase since December 2023.

Rate-setters Down Under kept policy unchanged but sounded a hawkish note on the outlook for rates. The Cash Rate was kept at 4.35%, as anticipated by economists. However, policymakers said underlying inflation was "too high", pointing out that it would be some time yet before it was sustainably in the target range.

The eurozone economy stalled in July as demand for goods and services deteriorated, according to a survey released on Monday. The HCOB composite PMI output index fell to a five-month low 50.2 from 50.9 in June. A reading above 50.0 indicates expansion, while a reading below signals contraction. Meanwhile, the services PMI business activity index printed at 51.9 in July, down from 52.8 a month earlier and marking a four-month low.

Activity in China’s services sector picked up in July, according to a survey released on Monday. The Caixin/S&P Global purchasing managers’ index rose to 52.1 from 51.2 in June. This marked the 19 month of expansion in a row and was ahead of consensus expectations for a reading of 51.4. A reading above 50.0 indicates expansion, while a reading below signals contraction.