Weekly review

The FTSE 100 ended the week up 88.63 points, or 1.07%, closing at 8,376.63 on Friday.

Equity view

STV Group announced the appointment of Rufus Radcliffe as its new chief executive officer on Friday, effective 1 November. The London-listed broadcaster said Radcliffe would join the board and take over from Simon Pitts, who was stepping down on 31 October.

Ryanair has announced that one of its non-executive directors has resigned after just six months on the board due to a potential conflict of interest in the coming months. Roberta Neri is currently an operating partner at Spanish investment fund Asterion Industrial Partners, which recently announced plans to invest in a number of large Italian airports starting in October.

Hutchmed China has voluntarily withdrawn its supplemental new drug application (NDA) in China for the use of fruquintinib in combination with paclitaxel for second-line treatment of advanced gastric or gastroesophageal junction adenocarcinoma, it announced on Friday. The AIM-traded firm said the decision followed an internal review and recent discussions with China's National Medical Products Administration (NMPA), which indicated that the current data package would likely not support approval.

Bigblu Broadband reported a decline in first-half revenue on Friday, to £11.2m from £13m in the same period last year, reflecting a strategic decision to migrate customers onto higher-value packages. The AIM-traded firm said the move was part of its ongoing effort to focus on more profitable customer segments, even as overall revenue decreased 8% compared to the prior year.

Shares in London & Associated Properties surged on Friday after the real estate group reported a return to profit in the first half, while the stock was boosted by its investment in South African coal miner Bisichi. As well as a number of retail and industrial properties in the UK, LAP owns a 41.6% interest in UK-listed Bisichi, which saw shares soar by 31% on Friday on the back of its own half-year results.

Ofgem has closed its probe into the biomass profiling data of Drax after investigating whether or not the power station group failed to meet sustainability criteria of so-called Renewable Obligation Certificates (ROCs). The investigation found that Drax had "process gaps" in how it reported profiling data for Canada in the period between April 2021 and March 2022.

Grafton Group has unveiled a £30m share buyback as the building materials distributor and DIY retailer shows confidence in its full-year outlook despite a dip in profits and cash flow in the first half of 2024. The company said it was launching a share purchase programme "on the strength of anticipated free cash flow generation in the current financial year and confidence in the group's prospects".

Hotels group PPHE posted a jump in half-yearly profits and held guidance despite supply chain issues holding up full openings of new art’hotel properties in London and Rome. Earnings before interest, taxes, depreciation, and amortisation for the six months to June rose 6.7% to £48.3m as revenue hit a record £191m, up 6.1%. However, revenue per available room – a key industry metric – fell 2.2% to £107.8 as prices normalised after the Covid pandemic.

Jefferies said late on Wednesday that Tom Sosnoff and Scott Sheridan had sold 6.5m IG Group shares in a placing to a limited number of institutional investors. The placing represents around 1.8% of the existing share capital in the company.

UK convenience food supplier Greencore Group said it was extending its current share buyback programme by £10m resulting in a total maximum of £40m being allocated. Greencore in May announced a plan to return £50m to shareholders by May 2025 with an initial buyback of up to £30m which is now largely complete.

Insurance giant Prudential said it is on track to hit its medium-term profit targets after a solid first half, and announced an acceleration in sales momentum since the period-end. New business profit totalled $1.47bn in the six months to 30 June, which was 8% higher than last year when excluding the effect of interest rate and other economic impacts.

Frasers Group said it had taken a 14.65% stake in Accent Group, a retail and distribution business in Australia and New Zealand’s performance and lifestyle market. Accent delivered AUD$1.6bn in fiscal 2024 of sales from nearly 900 stores and websites, consisting of multi-brand sports fashion stores, vertical owned brands, and global exclusively distributed brands such as Skechers, Hoka, UGG and Vans, Frasers said on Wednesday. No financial details were disclosed.

Americas-focused precious metals producer Hochschild Mining has reiterated its output guidance despite operations at its newly opened Mara Rosa mine running slowly, as it swung into profit for the first half on the back of rising commodity prices, lower costs and a reduction in impairment charges. The company also said it would "reevaluate the scope for capital returns" when it reports its full-year results early next year, as it expected to generate "substantial" cash flow in the second half.

Wood Group said on Wednesday that it has agreed the sale of two businesses for around $165m as part of its programme to dispose of non-core businesses. The company said it had signed deals for the sale of its stake in EthosEnergy, a joint venture focused on rotating equipment, and CEC Controls, which is an industrial and process control systems business in the automotive market.

GSK announced a number of developments on Wednesday, firstly welcoming a decision from the Delaware Supreme Court to review a lower court ruling that allowed the introduction of expert evidence in the ongoing litigation over ‘Zantac’, or ranitidine. The FTSE 100 pharmaceuticals giant said the interlocutory review, granted under exceptional circumstances, was seen as a positive step, as it continued to defend itself against claims that its now-discontinued heartburn drug increased cancer risk.

Online grocery and food logistics group Ocado has announced that operations have finally started at two customer fulfilment centres in Australia a year later than planned, as part of its partnership with retail chain Coles. The two robot-operated facilities in Sydney and Melbourne, first announced in 2019, were originally scheduled to go live last year, but the companies faced numerous delays during construction.

Mining titan BHP reported a bigger-than-expected increase in full-year underlying profits, helped by record volumes of iron ore and higher copper output, but warned of an "uneven" recovery in China. The world's largest miner said underlying profits for the 12 months to 30 June were $13.7bn, up 1.8% on last year and well ahead of the $13.49bn projected by analysts.

Bunzl shares were surging on Tuesday morning after it upgraded its full-year guidance and launched a share buyback programme, even after first-half revenue slipped 3.3% to £5.71bn. The FTSE 100 firm said that at constant exchange rates, the revenue decline was a marginal 0.4%.

Exploration and production firm Woodside Energy shares advanced on Tuesday despite posting a decline in interim profits as a result of lower prices for liquefied gas. Woodside said underlying net profits after tax had fallen 14% year-on-year to $1.63bn, while operating revenues and net cash from operating activities both dropped 19% to $5.98m and $2.39m, respectively.

Harbour Energy surged on Tuesday after saying that its acquisition of the Wintershall Dea asset portfolio was set to complete earlier than expected. The deal is now expected to close early next month, versus previous guidance of early in the fourth quarter.

Economic news

Approvals and borrowing for mortgages in the UK rose to their highest levels in nearly two years in July, according to data from the Bank of England on Friday. Net borrowing of mortgage debt by individuals increased to £2.8bn last month, the highest since November 2022, and up from £2.6bn in June.

UK house prices unexpectedly dipped on the month in August, but rose at their fastest annual pace since December 2022, according to figures released by Nationwide on Friday. On the month, prices were down 0.2% following a 0.3% increase in July, and versus expectations for a 0.2% rise.

Retail footfall across the UK experienced a slight decline of 0.4% year-on-year in August, according to fresh BRC-Sensormatic IQ data released on Friday morning. That represented a significant improvement from July's 3.3% drop, indicating a degree of resilience in the sector despite disruptions caused by riots earlier in the month.

UK car production slumped 14.4% in July, according to the Society of Motor Manufacturers and Traders, with a total of 65,478 vehicles rolling off factory lines last month as model changeovers and temporary supply chain bottlenecks disrupted output. However, despite the overall reduction, the production of electrified vehicles remained relatively stable and accounted for 37.5% of the total output in July, only slightly down from 39.5% at the same time a year earlier.

Britain’s financial watchdog has started a probe into so-called “pure protection” insurance policies over concerns that companies may be ripping off vulnerable customers. The Financial Conduct Authority (FCA) said it would launch a market study into products designed to help people and their families with their finances should a policyholder die or be unable to cover financial commitments.

UK house prices bounced back in July following a drop in June, according to property website operator Zoopla, aided by a continued jump in demand and increased home stock. Zoopla said its UK house price index registered a 20% jump in buyer demand and a 23% surge in year-to-date sales, leading to a 1.4% rise in house prices across Britain so far this year. Year-on-year, however, July's growth rate was a much more modest 0.5% due to a fall in prices during late 2023.

Shop prices in the UK in August experienced deflation for the first time since October 2021, according to fresh data released on Tuesday, with a decrease of 0.3%. That marked a significant shift from the prior month's slight inflation of 0.2%.

International events

Inflation in the eurozone inflation fell sharply to a three-year low in August, boosting hopes that the European Central Bank will cut interest rates at its next monthly meeting. Inflation plunged to 2.2%, in line with forecasts and down from July's 2.6%. The news came as Germany and Spain both reported bigger than expected reductions on Thursday.

Pending home sales in the US unexpectedly dropped in July to a record low, as elevated interest rates continued to limit affordability. Pending sales of existing homes, which are used as indicators of upcoming sales closings, declined by 5.5% last month, the National Association of Realtors reported on Thursday.

German inflation dropped its lowest level in more than three years this month, unexpectedly falling below the 2% target set by the European Central Bank. According to the Federal Statistical Office, the annual growth rate of consumer prices slowed to just 1.9% in August, down from 2.3% in July. This was the lowest level recorded since March 2021, and well below the 2.1% expected by economists.

Americans lined up for unemployment benefits at a decelerated pace in the week ended 24 August, according to the Department of Labor, but remained well above the average seen earlier in the year. Initial jobless claims fell by 2,000 to 231,000, broadly in line with market expectations for a reading of 232,000, supporting the belief that the US labour market was softening, as highlighted by a marked downward revision to nonfarm payrolls for the year ended 31 March.

The annual rate of economic growth in the US more than doubled in the second quarter, according to revised estimates from the Bureau of Economic Analysis on Thursday. The secondary reading of GDP data for the April-June period showed that year-on-year economic expansion accelerated to 3.0%, up from 1.4% growth in the first quarter.

The eurozone's August Economic Sentiment Indicator recorded a surprise jump month on month, according to official data published on Thursday, beating expectations of no gain. The ESI jumped to 96.6 from 96 in July, with services, industry and retail trade confidence driving the rise, while confidence among consumers and in construction remained broadly stable.

US-listed shares of Birkenstock plunged on Thursday after the German sandal maker underwhelmed investors with a record third-quarter performance, as it narrowly missed consensus forecasts with its top line. The company, which debuted on the New York Stock Exchange last October, reported a 19% year-on-year increase in revenue to €565m for the fiscal third quarter ended 30 June, around €1m shy of analysts' forecasts.

Best Buy hiked its profit forecast for the year on Thursday, amid a positive shift in consumer demand for electronics. The US retailer said it now expected adjusted earnings per share to reach as high as $6.35, up from a previous estimate of $6.20, citing stronger-than-anticipated profitability in the first half of the year.

Shares in Dollar General were sliding in early trade on Thursday, after the retailer revised its annual sales and profit forecasts downward, citing a reduction in consumer spending on discretionary items. The US rural-focussed general store chain said cost-conscious shoppers were increasingly focusing on essential purchases such as groceries, at the expense of higher-margin products like home goods, electronics, toys, and apparel.

Pernod Ricard said it expects to return to organic growth this new financial year after a small dip in sales in the 12 months to 30 June, but that first-quarter trading would be held back by inventory reductions and a "very weak" environment in China. The French distiller, which owns 240 brands including Absolut Vodka, Beefeater, Havana Club and Jameson, reported net sales of €11.6bn for the year just gone, representing an organic decline of 1%. Reported sales were down 4%, held back by a €784m negative impact from currency movements.

Consumer confidence in the US rose more than expected this month, but still remained within a narrow range that has prevailed over the past two years. According to a closely watched survey from The Conference Board on Tuesday, the Consumer Confidence Index rose to 103.3 from an upwardly revised 101.9 in July. This was ahead of the 100.7 consensus forecast.

US home price growth continued to outpace inflation in June, according to the S&P/Case Shiller US home price index, rising 0.4% month-on-month. However, the report also revealed that home prices in the 20 major US metropolitan markets were up 6.5% year-on-year, cooling from May's 6.9% increase but ahead of expectations for a reading of 6.3%.

German consumer sentiment is expected to deteriorate sharply in September, according to a survey released on Tuesday by GfK and the Nuremberg Institute for Market Decisions (NIM). The consumer sentiment index fell to -22 from a revised -18.6 in August, coming in below expectations for a reading of -18.2.