Weekly Review

The FTSE 100 finished up 22.52 points on the week at 6,567.24p.

Equity view

HSBC reported a 2% rise in reported third-quarter pre-tax profit to $4.6bn but said underlying pre-tax profit was down 12% to $4.4bn against the same period last year.

Ryanair's first-half net profits flew 32% higher to €795m on Monday thanks to a strong summer and the budget airline's customer charm offensive.

Diageo has agreed on an asset-swap deal with Casa Cuervo, which will see the UK spirits group take full control of tequila label Don Julio in exchange for selling its Bushmills whisky brand.

Cigarette maker Imperial Tobacco hailed rising demand for key brands such as Davidoff, JPS and Lambert & Butler as full-year revenues rose 1% at constant currency to £12.9bn, though operating profits were flat.

Insurance and pensions group Legal & General racked up record annuity sales of £3.9bn in the first nine months of 2014 despite British government changes that have relaxed obligations on people to buy annuities to save for their retirement.

Full-year earnings and dividends from Associated British Foods were up 6% on the prior year on the back of a "magnificent" performance from retail arm Primark.

Balfour Beatty finance chief Duncan Magrath said he was quitting just over a month since the civil engineer issued its fifth profit warning in two years.

Rolls-Royce chief financial officer Mark Morris stepped down as the company announced plans to accelerate its cost-cutting programme with 2,600 job cuts over the next 18 months.

Marks & Spencer unexpectedly increased its interim dividend as first-half results were much better than feared, a surprise 2.3% increase in underlying pre-tax profit after improved margins in the clothing division.

Engineering group Meggitt said organic growth will slow towards the end of the year but the stock rose strongly on Wednesday after the announcement of a share buyback.

Randgold Resources said it experienced a "robust" third-quarter performance and is confident of delivering a record year with quarterly gold output at all-time highs and costs being well contained.

Drug group Astrazeneca increased its full-year revenue and earnings guidance after good performances by its flagship drugs in the third quarter.

Increasing volume pressure, weak macro conditions and unfavourable weather led to a fall in third-quarter profits at Coca-Cola HBC.

First-half profits and cash flow from credit information group Experian hit the top end of expectations despite a decline in US consumer revenue due to rebranding.

Supermarket chain Wm Morrison saw like-for-like sales slip 6.3% in the third quarter but was optimistic about the Christmas trading period after price cuts and a new Match & More loyalty card that was proving "extremely popular" with customers.

IAG pledged to launch a dividend payment to shareholders in 2015 after saying it was confident of hitting its targets for the year.

Economic news

The UK manufacturing purchasing managers' index (PMI) unexpectedly increased to 53.2 in October from 51.6 in September, ahead of the 51.4 consensus forecast.

The UK construction PMI fell to a five-month low of 61.4 in October from 64.2 in September, below the 63.5 consensus forecast.

The UK services PMI declined to a 17-month low of 56.2 in October from 58.7 in September, below the 58.5 consensus forecast.

UK economic growth will register a marginal slowdown in 2015 to 2.5%, according to a new report by the National Institute Economic Review (NIESR), from an estimated 3% expansion in 2014.

UK food inflation fell to 0.1% in October after three consecutive months at 0.3%. This was the lowest recorded rate since the series began in December 2006, according to the Shop Price Index from the British Retail Consortium (BRC) and retail researchers Nielsen.

The Bank of England decided to keep interest rates at 0.5% and asset purchases at £375bn, as predicted by analysts.

The UK balance of trade worsened last month as the strong pound, weakness in the Eurozone and UK economic imbalances took their toll. The UK’s seasonally adjusted deficit on trade in goods and services was estimated to have been £2.8bn in September 2014, compared with £1.8bn in August 2014, according to the Office for National Statistics.

International events

The Chinese manufacturing PMI unexpectedly declined from 51.1 to a five-month low of 50.8, while the non-manufacturing PMI fell from 54 to a nine-month low of 53.8.

Banco Santander reported third-quarter earnings on Tuesday that beat the consensus forecast after profit reached its highest level in 10 quarters.

Virgin America, the airline partly owned by Richard Branson, is set to price shares for its initial public offering in New York at between $21 and $24 a share, valuing the company over $1bn.

The European Commission significantly reduced its forecasts for growth in the Eurozone this year and next. GDP is expected to expand by 0.8% and 1.1% in 2014 and 2015, lower than its spring forecasts of 1.2% and 1.7% growth, respectively.

Hugo Boss shares slumped after the fashion house issued a profit warning thanks to "increasing challenges posed by macroeconomic conditions and the recent substantial slowdown in industry growth in Europe".

Republicans won control of the Senate in the US mid-term elections on Tuesday, strengthening their power in the House of Representatives. They now control both chambers of Congress for the first time since 2006, raising hopes amongst investors for less political gridlock and more pro-business policies.

US banking giant JP Morgan has increased the amount of money set aside for potential litigation costs by $1.3bn (£813m), after revealing its currency trading operations were under investigation by the US Department of Justice.

The central bank of Iceland, Sedlabanki, unexpectedly cut its main policy rate by 25 basis points to 5.75% on Wednesday, its first change in two years, after it lowered its inflation and growth forecasts.

European Central Bank president Mario Draghi said that policymakers were "unanimous" in their readiness to take more action on monetary easing to maintain price stability and curb a slowdown in economic growth, "if necessary". The comments came as the ECB kept interest rates unchanged.

US non-farm payrolls increased by a less-than-expected 214,000 in October, but economists weren't too disappointed with the data on Friday as the unemployment rate nudged down to a six-year low of 5.8%. The headline payrolls figure missed the consensus forecast of 235,000, but estimates for September and August were both revised up by a combined 31,000.