Weekly review

The FTSE 100 ended the week down 40.13 points, or 0.48%, closing at 8,280.63 on Friday.

Equity view

Virgin Wines said on Friday that it has agreed a strategic partnership with online supermarket Ocado, which will stock a selection of 50 wines from its portfolio. With effect from 2 October, Ocado has had access to the "exclusive selection" of wines, which Virgin said has been "carefully curated" by both it and Ocado’s buying teams.

AIM-listed renewable electricity supplier Good Energy Group has announced the acquisition of Lincolnshire-based solar installation company Amelio Enterprises for £6m. Amelio, which has a presence in the commercial solar sector and experience in education and public sector projects, expands Good Energy's decentralised energy services offering, as well as its geographical presence in the solar installation market.

JD Wetherspoon reported a 5.7% increase in full-year revenue on Friday, to £2.04bn, with a 73.5% rise in profit before tax to £73.9m before separately disclosed items. The FTSE 250 pub operator said like-for-like sales increased 7.6% for the 52 weeks ended 28 July. Operating profit before separately disclosed items also rose, by 30.2% to £139.5m, while the company’s diluted earnings per share saw a 77.3% rise to 46.8p.

AIM-listed energy investment firm Prospex Energy has officially expanded into its third European country after its subsidiary PXEN Tatra secured the qualification to apply for licences in Poland. PXEN Tatra, which was incorporated into Prospex in March, had applied to the Warsaw regulator in May for the pre-qualification to apply for onshore open acreage hydrocarbon exploration licences in the country.

Tesco has lifted its annual profit guidance despite a slight underlying slowdown in the second quarter, as growth remained resilient across its main retail operations. Due to stronger-than-expected volumes in UK retail in the first half, which the grocer put down to its ongoing investments in "value, quality and service", retail adjusted operating profit for the year ending 28 February is now expected to be £2.9bn, up from earlier guidance of at least £2.8bn and higher than last year's £2.76bn.

National Grid said it performed in line with expectations in its first half, though it registered an unexpected additional £70m contribution from the Electricity System Operator (ESO). The ESO, which was sold back to the government last month for £630m, put it back in public ownership for the first time in decades. It will now turn into the National ESO, or NESO.

British Land said on Thursday that it had raised £301m in an equity placing to help fund the acquisition of a portfolio of seven "high quality" retail parks. The company announced late on Wednesday that it had agreed to buy the retail parks from Brookfield for £441m. British Land said the remainder of the consideration would be financed from existing cash and in place facilities.

Venture capital firm Molten Ventures said on Thursday that it has acquired a majority secondary position in the first fund of Connect Ventures, a 2012 Vintage Fund containing a portfolio of eight minority positions in businesses across Europe. Molten Ventures said it had acquired approximately 97% of the fund for roughly £18.6m. Of the fund's eight assets, approximately 85% of the value was driven by Typeform, a platform for forms and surveys, and Soldo, a payment and spend automation platform.

Europe-focused building products and specialist insulation supplier SIG has reiterated full-year profit guidance after a sequential improvement in like-for-like revenue performance in the third quarter. LFL sales were down 4% in the three months to 30 September at £662m, compared with the 7% decline reported in the first half, with nearly all of its businesses seeing an improvement in LFL momentum.

Saga confirmed on Wednesday that it is in talks with Belgian insurer Ageas about a potential partnership arrangement for its insurance business. Responding to press speculation, the company - which specialises in products and services for over-50s - said there can be no certainty that any partnership agreement will occur. A further announcement will be made in due course, as appropriate, it added.

Household appliances retailer AO World is to take over struggling refurbished electrical and media reseller MusicMagpie for £10m. AO World is offering 9.07p in cash per share for the company, representing a 58% premium to the closing price of 5.75p on Tuesday and a 48% premium to the three-month average closing price of 6.12p.

Wizz Air reported a 3.9% year-on-year increase in passenger numbers for September on Wednesday, carrying 5.76 million passengers during the month. The FTSE 250 low-cost carrier said that despite engine-related groundings of its more efficient Airbus A321neo fleet due to issues with Pratt & Whitney GTF engines, it managed to increase seat capacity by 4.8%, though load factors dipped slightly to 91.7%, down from 92.4% in September last year.

British-Australian metals and mining titan Rio Tinto has announced a lithium supply chain commercial partnership with UK-based, lithium refinery developer Green Lithium. Green Lithium is a mineral processing company with plans to build and operate a large-scale lithium refinery in Teesside, providing lithium chemicals to the UK and EU markets.

Expensive handbag maker Mulberry has rejected an £83m takeover offer from Mike Ashley’s Frasers Group saying it failed to recognise the company’s “substantial future potential value”. Frasers, which already holds a 37% stake in Mulberry, on Monday offered a 130p a share in cash in an angry response to an emergency £10.75m placing of shares in the luxury group late on Friday to support its balance sheet after slumping to a £34m full-year loss.

London-focused property group Great Portland Estates has leased nearly 7,000 square feet of retail space at Orchard Court in Marylebone to luxury home appliances brand Gaggenau. Gaggenau, has taken 6,900 sq ft of retail space on a 10-year lease, doubling its footprint from its current location, to create a new flagship store for the brand at 6/7 Portman Square, just behind Selfridges in Central London.

Endeavour Mining announced the appointment of Sonia Scarselli as its executive vice-president of exploration on Tuesday, effective from December. The FTSE 100 company said Scarselli was joining from BHP, where she most recently held the role of vice-president of exploration since September 2023, and vice-president of the BHP Xplor programme since June 2022.

Mining technology group Weir said it had won a £25m contract to provide services on the next phase of OCP’s Benguerir and Louta greenfield phosphate projects in Morocco. The order will support the continued construction of the Louta project and trebling of production from the Benguerir project, where Weir has previously provided similar separation and desliming solutions, the company said on Monday, adding that the contract award will be recognised in the order book during the remainder of the third quarter.

Aston Martin has revealed that full-year profits are now expected to decline as a result of a cut to wholesale volume guidance due to supply chain disruption and weak demand in China. The luxury carmaker, officially known as Aston Martin Lagonda Global, said on Monday it was reducing wholesale volume forecasts for 2024 by 1,000 units due to tough market conditions. It also said it needed to "smooth the cadence of wholesale volumes over the coming quarters to deliver on its demand-led approach and maximise production efficiencies".

QinetiQ Group announced the sale of its 407-acre freehold site at Cody Technology Park (CTP) in Farnborough on Monday, to a fund managed by Tristan Capital Partners, for £112m. The FTSE 250 company said the deal was expected to complete within eight weeks, at which point it would receive a cash payment of £112m and enter into a 15-year leaseback agreement for its current footprint at the site.

Bookmaker Entain revealed on Monday that Stella David will take over from Barry Gibson as chair, effective immediately. Entain also said David had been appointed as chair of the group's people and governance and capital allocation committees, and a member of its sustainability and compliance committee with immediate effect. Separately, Entain said Helen Ashton had been appointed as chair of the audit committee, succeeding Pierre Bouchut, who will stay on as a member of the committee.

Economic news

Bank of England economist Huw Pill urged caution on interest rate cuts on Friday, in contrast to more dovish comments from governor Andrew Bailey. In a speech at the Institute of Chartered Accountants of England and Wales’ annual conference, Pill - the BoE’s chief economist - said there was still "ample reason for caution" when assessing inflationary persistence.

The UK construction sector grew in September at its fastest pace in two-and-a-half years, according to a survey released on Friday. The headline S&P Global construction purchasing managers’ index rose to 57.2 in September from 53.6 in August. It remained above the 50.0 mark that separates contraction from expansion for the seventh month in a row and signalled the steepest rate of growth for 29 months.

Retail footfall rose for the first time in over a year in September, industry data showed on Friday, as shoppers made the most of the mild weather. According to the latest data from the British Retail Consortium and Sensormatic, total UK footfall jumped 3.3% in September, a notable improvement on August’s 0.4% dip. It was also the first year-on-year increase since July 2023.

Topps Tiles updated the market regarding its recent acquisition of CTD Tiles, which included 30 stores, selected stock, and intellectual property for £9m, on Thursday. The London-listed firm said the Competition and Markets Authority (CMA) had issued an initial enforcement order (IEO) under the Enterprise Act in relation to the acquisition. It said the IEO - a standard measure in cases involving completed transactions under CMA review - required Topps and its subsidiary, Tiles4Less, to maintain the CTD business as a separate entity and refrain from any further integration until the review was concluded.

Business activity growth eased to a three-month low in September, according to a survey released on Thursday, but prices charged inflation slowed. The S&P Global services purchasing managers’ index fell to 52.4 from 53.7 in August, coming in below the flash estimate of 52.8. Still, it remained above the 50.0 mark that separates contraction from expansion.

Sterling took a hit on Thursday after Bank of England governor Andrew Bailey told the Guardian that the central bank could become a "bit more aggressive" in cutting interest rates as long as news on inflation continued to be good. Bailey told the Guardian he has been encouraged by the fact that cost of living pressures had not been as persistent as the BoE thought they might be.

Profitability across the UK’s financial services sector tumbled in the last quarter, an industry survey showed on Thursday, as growth slowed ahead of this month’s Budget. According to the latest CBI Financial Services Survey, profitability in the three months to September fell at the fastest rate since March 2009, with the weighted balance tumbling to -49 from -5 in the second quarter. Volumes growth also slowed notably, with the balance falling to 6 from 22.

Growth in the UK manufacturing sector slowed in September, while business confidence deteriorated amid concerns about the upcoming Budget and geopolitical tensions. The S&P Global purchasing managers’ index printed at 51.5, down from August's 26-month high of 52.5 and in line with the flash estimate. The PMI has remained above the 50.0 mark that separates contraction from expansion for five months in a row.

Confidence among business leaders in the UK dropped in September to its lowest level in nearly two years, with uncertainty ahead of the Autumn Budget holding back investment decisions. The Institute of Directors (IoD) monthly Economic Confidence Index plunged to -38 last month, from -12 in August, marking the lowest level for the index since December 2022.

Shop prices continued to move into deflation in September, with a year-on-year decline of 0.6%, according to the British Retail Consortium-NielsenIQ Shop Price Index on Tuesday. That marked a further fall from the 0.3% deflation recorded in August, and was below the three-month average of -0.3%. The latest figures indicated the sharpest drop in shop prices since August 2021.

International events

The US economy added far more jobs than expected in September while the unemployment rate unexpectedly fell, dashing any expectations of a potential 50 basis points rate cut by the Federal Reserve next month. Figures released by the Labor Department showed that total non-farm payrolls rose by 254,000 from August, versus expectations for a 140,000 increase. The figure for August, meanwhile, was revised up to a 159,000 gain from 142,000.

The European Union is to impose steep tariffs on imports of Chinese electric vehicles, it was confirmed on Friday, after a majority of member states voted in favour. Despite vocal opposition from some countries, including Hungary and Germany, the vote means tariffs of up to 35.3% will be imposed on imports of battery EVs, on top of an existing 10%.

Shares in shipping firms were in the red on Friday, with Maersk particularly affected, following the resolution of a US port strike that had initially raised hopes for a boost in global shipping demand for European operators. The strike, which impacted ports on the US East Coast and Gulf Coast, had caused significant disruptions in supply chains stateside, with goods like fruits, pharmaceuticals, and automobiles left anchored offshore.

The decline in construction across the eurozone eased slightly in September, but the downturn remained firmly entrenched, with every member state reporting a contraction in activity. The eurozone construction purchasing managers' index (PMI), compiled by S&P Global and Hamburg Commercial Bank, increased to 42.9 last month, after hitting a six-month low of 41.4 in August.

Americans lined up for unemployment benefits at an accelerated clip in the week ended 28 September, according to the Department of Labor. Initial jobless claims rose by 6,000 to 225,000, above market expectations for a reading of 220,000 for a new three-week high, supporting the belief that the Federal Reserve will implement interest rate cuts at every remaining meeting this year.

The eurozone economy faltered in September, a closely-watched survey showed on Thursday, weighed down by slowing growth in the bloc's dominant services sector. The latest seasonally-adjusted HCOB eurozone composite PMI output index was 49.6, down on August’s 51.0 and the first time it has fallen into contraction since February. It was, however, above the flash estimate of 48.9.

US mortgage applications fell by 1.3% week-on-week in the seven days ended 27 September, according to the Mortgage Bankers Association of America, the first drop in more than a month. Applications to refinance a mortgage fell 3% but remained 186% higher than at the same time a year earlier, while applications to purchase a home ticked up 1% week-on-week.

Private sector employment in the US rose more than expected in September, according to figures released on Wednesday by ADP. Employment increased by 143,000 from August, versus expectations for a 125,000 jump. Meanwhile, August’s gain was revised to 103,000 from 99,000. Small businesses with fewer than 50 employees shed 8,000 jobs, while medium businesses with between 50 and 499 employees added 64,000 jobs.

Unemployment across the eurozone held steady in August at the record-low rate of 6.4%, according to figures from Eurostat on Wednesday. The jobless rate, which fell to the current level in July, was in line with economists' predictions. Eurozone unemployment, which surged to a peak of 8.6% during the height of the Covid-19 pandemic in September 2020, has been on a steadily declining path since mid-2021. It has remained below the 7.0% mark for the past 20 months.

The Institute of Supply Management's manufacturing index, as market participants tried to gain fresh insight into the state of the US economy amid ongoing fears surrounding a potential US recession. The ISM's manufacturing PMI was flat month-on-month in September at 47.2, falling slightly short of expectations for a reading of 47.5 and continuing to point to a contraction in the manufacturing sector as demand continued to be weak and output fell.