terling continues to trade in its lowest level since December after stagflation fears sparked by the recent spike in energy prices helped accelerate the run towards the US dollar.
The pound is now at 1.34 against the dollar, and the greenback is increasingly seen as a safe haven for investors concerned about recent economic developments.
Slightly higher FTSE at lunchtime
The FTSE 100 is up 11 points, or 0.1%, this lunchtime to 7119.
The index is backed by commodity stocks, with Anglo American and Evraz leading the index with gains of more than 2%. Diageo is not far behind after a cheerful statement from the AGM.
Chief Executive Officer Ivan Menezes told investors that the FTSE 100 firm is seeing its North American business “perform strongly, despite some supply chain constraints.”
Menezes expects the organic operating margin to benefit from a greater recovery in sales figures.
Fashion firm H&M reports better sales
Fashion firm H&M said that September sales improved from the previous month, even as the disruption and delays affected some products.
The Stockholm-based retailer said sales this month were “slightly higher” in local currencies.
The growth occurred “despite the fact that demand could not be fully met due to interruptions and delays in the flow of products.”
H&M gave the update when it released results for the third quarter to August 31, which showed the group’s sales in local currencies were up 14% from the same period last year. Online sales increased 22% and gross profit was 19% higher.
FirstGroup falls despite funding from US Greyhound.
Shares of transportation operator FirstGroup are down 1% despite new funding in the US.
FirstGroup’s long-distance bus business, Greyhound, was awarded a $ 84.6 million grant from the U.S. Department of the Treasury’s Financial Assistance for Transportation Services (CERTS) scheme. Financing can be used to keep key trucking companies running and can be spent on payroll and things like maintenance.
“As noted above, Greyhound remains a non-core asset to the Group and the Board continues to pursue all exit options for the business with ongoing sales discussions,” FirstGroup said.
Positive Quarter for FTSE 100
A rally in mining stocks means the London market will limp to the finish line even higher than where it began an increasingly tense third quarter of the year.
Turnover in commodities followed a respite from falling iron ore prices, ensuring shares of companies like Anglo American and Rio Tinto are up 2%.
The FTSE 100 Index rose 38.28 points to 7,146.44, despite concerns about the health of China’s economy persist after the latest Manufacturing Purchasing Managers Index showed manufacturing activity contracted for the first time. time since the start of Covid-19.
Attention is now turning to whether China’s seven-day Golden Week holiday, which starts tomorrow and is a key barometer of economic health, predicts an increase in domestic travel.
An end to the country’s Evergrande crisis is also in sight after Reuters reported that some overseas bondholders had not received interest payments due on Wednesday.
The fate of the debt-laden real estate firm is among several concerns clouding the outlook for global markets in recent days, with rising energy prices and the prospect of earlier-than-expected increases in interest rates. That add to the volatility.
Concerns have accelerated the flight to the US dollar, with the British pound now at its lowest level against the dollar since December. Today it has changed little to $ 1.34, reflecting a backdrop of stagflation fears and further increases in natural gas prices.
IG Chief Market Analyst Chris Beauchamp said: “Talk of the pound being hit like an emerging market currency is back and as usual it has drifted off the mark a bit as it has not been exactly a great week for the euro, yen, or Aussie, but it shows that a seismic shift to the US currency is taking place. “
The FTSE 100 index has benefited this year from the TINA effect, there is no alternative as stocks remain attractive due to low yields on cash and government bonds. It is more than 10% higher during the year and will end the September quarter 1% higher.
Stocks struggling today include Rolls-Royce after hitting an 18-month high earlier this week thanks to a deal with the US Air Force. Shares fell 2% or 3.3 pence to 141, 3 pence.
The FTSE 250 index rose 105.15 points to 23,256.12, led by online review business Trustpilot, as the shares rose 5% or 17.8p to 375p.
Virgin Money to eliminate branches and jobs in a digital reorganization
Virgin Money will close 31 branches, resulting in the loss of 112 jobs, the latest sign that banks are pulling back from Main Street.
In a statement titled “Update on Accelerating Digital Strategy,” the bank said customers are “increasingly adopting” online banking.
While the move seems logical, it will raise more questions from MPs, concerned that some consumers will be left without a branch to go to.
Boohoo’s warning on full-year sales sends stocks down 11%
Boohoo has lowered its sales guidance for the full year as the disruption of the global supply chain and the reopening of the main street threatens to slow the fast-fashion giant’s accelerated growth, which Share up to 11%.
The online retailer’s shares fell 28.4 pence to 227.6 pence, despite revenue for the six months of August rising 20% to a record £ 975.9 million.
Investors sought to focus on higher shipping costs, up £ 26 million over two years, which contributed to pre-tax earnings falling 64% to £ 24.6 million and a number of hurdles that the AIM-listed retailer is dealing.
Read the full story here.
Oxford Nanopore emerges in its debut
Oxford Nanopore shares are off to a great start in one of London’s biggest IPOs this year.
The gene sequencing company was initially valued at £ 3.4 billion after the stock was priced at 425 pence, compared to a previous indicative price range of between 375 pence and 450 pence.
They later changed hands to 552p, a 30% jump amid strong demand from institutions during conditional transactions.
Oxford Nanopore, which spun off from Oxford University in 2005, is raising £ 350 million by issuing new shares.
Desktop and portable biotech products enable low-cost, real-time DNA and RNA analysis by researchers both in the laboratory and in the field. It sequenced the genetic code of the Covid-19 virus to track the emergence of variants around the world and is also used in cancer research, viral outbreak surveillance, and crop science.
Chief Executive Officer Gordon Sanghera said today that his company is still “only on the sidelines of a long and exciting journey.”
“I believe that our unique technology will open up many new possibilities for positive impact, both by enabling new discoveries in scientific research and through more accessible, faster and richer biological insights in health, agriculture, food and understanding settings.”
Diageo shares rise after optimistic update prior to the General Shareholders’ Meeting
Diageo shares rose as much as 2% in early trading after a pre-AGM update at the beverage giant.
Chief Executive Officer Ivan Menezes told investors that the FTSE 100 firm, behind brands from Johnnie Walker to Guinness, is seeing its North American business “perform solidly, despite some chain constraints. supply”.
In a statement, Menezes said the company expects the organic operating margin to benefit from a further recovery in sales figures and said the group is handling mounting inflationary pressures, including supply chain problems.
Annual UK house price growth in September slows but continues to rise by 10%
Prices in September reached £ 248,742, with a modest annual slowdown to 10% from the 11% growth seen in August, according to the mortgage lender. On a national scale.
The company’s chief economist, Robert Gardner, said that house prices are still around 13% higher than before the pandemic began.
Read the full story here.
Slow for FTSE
It feels like an increasingly turbulent month for investors, but as the last trading day of September begins, the FTSE 100 Index remains largely unchanged where it started.
Third quarter performance is 1% higher and the top category is 8% better year-to-date after being helped by the TINA effect (no alternative) as stocks remain attractive due to to low cash and government returns. captivity.
Deutsche Bank analyst Jim Reid said: “Markets are reaching the end of the third quarter today, even if they have seen some signs of stabilization in the last 24 hours.”
He noted that stocks were showing signs of recovery as sovereign bond yields took a breather after being sent higher in recent sessions on expectations of tighter monetary policy in the UK and US.
Tech stocks remain under pressure as rising US bond yields create a drag on the value of high-growth sectors. Wall Street’s Nasdaq closed slightly lower last night and the FANG + index, whose nine-member membership includes Facebook, Twitter, Tesla and Alibaba, was down 0.7%.