The FTSE 100 closed down 1% Thursday weighed by the banking
sector after Barclays noted a challenging end to 2023 for its
investment banking division, while Citigroup also warned of a
similar slowdown in revenue. "These warnings have served to weigh
on the banks with HSBC, Barclays and Lloyds acting as the main
drags on the U.K. benchmark," CMC Markets analyst Michael Hewson
said in a note. Marks & Spencer, Barclays and WPP were the
session's biggest fallers, down 5.2%, 4.6% and 4% respectively. On
the up side, Whitbread was the day's biggest riser, up 2.3%,
followed by Rentokil Initial, rising 1.5%, and Diageo, up 1%.
COMPANIES NEWS:
Marks & Spencer Expects to Meet Market Views After Strong
Christmas Performance
Marks & Spencer said it expects its full fiscal-year results
to meet market views after a strong performance over the key
Christmas period.
---
Tesco Lifts Guidance After Strong Christmas Period
Tesco upgraded its fiscal 2024 guidance for the second time
after it saw stronger-than-expected volume growth in the U.K.
market during Christmas.
---
Taylor Wimpey 2023 Profit Seen at High End of Guidance Though
Orders Slipped
Taylor Wimpey said its performance met its expectations, seeing
operating profit at the high end of its previous guidance range,
though its order book fell.
---
Whitbread Backs Guidance After Hotel Demand Drives 3Q Growth
Whitbread backed its guidance for fiscal 2024 as it posted an
increase in total sales in the third quarter, driven by high levels
of occupancy and strong pricing for its hotels in the U.K.
---
U.K. Competition Regulator Orders Pause on Pennon's Sutton Water
Integration Buy
The U.K. Competition and Markets Authority said it has issued an
enforcement order on the takeover by Pennon of Sumisho Osaka Gas
Water UK, preventing them from fully integrating while it completes
an investigation into the deal.
---
Informa Raises Guidance Again After Strong Performance, Sets
Year-Ahead Targets
Informa PLC raised its 2023 revenue guidance again after a
strong performance over the year with underlying revenue growth of
30%, while targeting high single digit for the year ahead.
---
LXI REIT Agrees to LondonMetric Property Takeover for Around
GBP1.9 Bln
LXI REIT and LondonMetric Property said they have agreed to a
merger, with LondonMetric buying LXI in shares, valuing the latter
at around 1.9 billion pounds ($2.42 billion).
---
Trustpilot Sees 2023 Adjusted Ebitda Ahead of Views; Starts
GBP20 Mln Buyback
Trustpilot expects its core earnings for 2023 to beat market
views given its double-digit growth in revenue for the year and
launched a 20 million pound ($25.5 million) share buyback.
---
Hilton Food Sees 2023 In Line With Views After December Sales
Volume Grew
Hilton Food Group said its 2023 performance was in line with
expectations following robust Christmas trading.
---
Robert Walters Backs Pretax Profit Guidance Despite Fee Income
Fall
Robert Walters reported a 13% fall in net fee income for the
fourth quarter of 2023 but backed its full-year pretax profit
guidance.
---
Darktrace Raises Revenue, Margin Outlook
Darktrace raised the guidance for revenue and its earnings
margin after booking significant growth in the first half.
---
Big Yellow Group's Revenue Rose Despite a Fall in Store
Occupancy
Big Yellow Group said its revenue rose in the third quarter
compared with a year ago despite decreasing occupancy across all
stores.
---
Savills Expects to Meet Profit Views Despite Market
Uncertainty
Savills said it expects to meet profit expectations, as strength
across its less transactional service lines offset challenges from
increased interest rates, geopolitical events and uncertainties
over asset values.
---
Grafton Group to Beat Market Forecasts Despite Subdued Trading
Environment
Grafton Group said that it expects to slightly beat adjusted
operating profit market forecasts for 2023 despite a subdued
trading environment over the final months of the year.
---
Windward Shares Rise on Market Beat Forecast
Windward shares rose as much as 21% after the company said that
it expects to beat market forecasts for 2023 after a strong finish
to the year.
---
Nisbets in Talks With Bunzl Over Potential Sale, Sky News
Reports
--Nisbets is in talks with Bunzl regarding a deal which could
value the company at between 450 million pounds to 500 million
pounds ($573.4 million to $637.1 million), Sky News reports.
---
Mears Group Shares Rise After Strong Year, Market Forecasts Beat
Expectation
Mears Group shares rose as much as 11% after the company said
that it expects to beat 2023 market forecasts for revenue and
adjusted pretax profit after a strong performance over the year,
which is expected to continue in 2024.
MARKET TALK:
Ferrexpo's Lack of Export Options Hurt Its Output
1350 GMT - Ferrexpo's 4Q output was hit by low European demand
and a lack of export options but the iron-ore pellet exporter could
see demand and prices improve, as well as potentially more export
routes, Liberum analysts write in a research note. The miner
operating in Ukraine was expected by Liberum to post flat
on-quarter production but instead saw output fall 50% on weak
European demand and the lack of cost-effective export routes, which
meant production had to be dialed back to avoid inventory build-up,
analysts say. However, while demand and prices look better in the
new year, shipping to customers in MENA and Asia could soon become
a reality as "Russia's navy [is] pushed out to the eastern part of
the Black Sea," they say. Shares are down 5.5% at 77.00 pence.
(christian.moess@wsj.com)
---
Chinese Demand for Luxury Goods Could Start to Improve
1346 GMT - Luxury sector could see a recovery in sales to
Chinese buyers, after recent limited demand due to economic woes
and pandemic restrictions, Goldman Sachs analysts write in a note
to clients. Chinese customers account for a large amount of the
industry's sales with the majority of spending being outside
territory. "Post the reopening of China, the recovery of spending
in Europe has been relatively muted, with volumes constrained by
flight availability and price," the analysts say. "We see Chinese
travel-related spending globally recovering to 2019 levels by 2025,
and spending in Europe recovering to pre-pandemic levels during
2026," the analysts say. Burberry, LVMH and Brunello Cucinelli, are
Goldman Sachs's key picks, while Salvatore Ferragamo is its least
preferred name. (andrea.figueras@wsj.com)
---
European Stocks Rise Ahead of U.S. Inflation Data
1240 GMT - European stocks mostly rise ahead of an expected
slightly higher Wall Street open as traders eye U.S. inflation data
later. The Stoxx Europe 600, DAX and CAC 40 gain 0.2%, though the
FTSE 100 drops 0.1%. Oil shares trade mixed as Brent crude rises
1.9% to $78.29 a barrel. IG futures data shows the Dow opening at
37715, versus Wednesday's close of 37695. Mainland China, Hong Kong
and Japan markets rose more than 1%. "It was a solid session across
most of Asia as investors threw caution to the wind ahead of
today's widely-anticipated U.S. CPI data," IG analysts write.
"Today's report will provide further indications as to whether
inflation is still dropping towards the Fed's 2% target."
(philip.waller@wsj.com)
---
Informa's TechTarget Deal Only Expected to Be Mildly
Accretive
1232 GMT - Informa's proposed agreement to merge its tech
digital businesses with TechTarget should be mildly accretive to
share values, but isn't likely to particularly push the needle, UBS
says. The events and business-intelligence company's plan is only
expected to be earnings accretive after 2025, and UBS analysis
suggests the deal would only add $150 million or 9 pence per share
to Informa's value--or 1% of the current share price, analysts say
in a research note. Between the deal values and the broadly in-line
new operating guidance given separately by Informa, investors are
unlikely to be swayed either way, the Swiss bank says. UBS keeps
its 785 pence price target. Shares are down 2.7% at 764.0 pence.
(joseph.hoppe@wsj.com)
---
WPP Double-Downgraded by UBS Over Growth, Free Cash Flow
Concerns
1227 GMT - WPP is double-downgraded by UBS over concerns organic
growth will miss both market expectations and the wider sector's
performance for the year and the medium term, and that free cash
flow will remain at depressed levels in 2024, analysts say. The
advertising giant's likely depressed cash flow will limit the size
of any share buyback program, and a large shareholder giveaway is
only likely if it makes asset disposals, UBS analysts say in a
research note. In this regard, the recent news that WPP is weighing
a disposal of its stake in Kantar Media is helpful, but timing
remains uncertain, the Swiss bank says. UBS cuts its recommendation
to sell from buy and its price target to 700 pence from 1,200
pence. Shares are down 3.2% at 735.2 pence.
(joseph.hoppe@wsj.com)
---
U.K. Domestic Investors to Absorb Heavy Gilt Supply in 2024
1214 GMT - The gilt market is counting on domestic investors to
buy most of the gilts due to be supplied in 2024, Bank of America
rates strategist Agne Stengeryte, says in a note. Local non-bank
investors were the biggest gilt buyers in 2023, buying over
GBP107.5 billion between January and November while banks came
second, investing over GBP28.3 billion, according to the Bank of
England, BofA says. If the trend continues, 2023 will be the first
year since 2016 in which domestic banks will be net buyers of gilts
and the first year since 2015 that local banks and non-bank
investors are the biggest gilt buyers, Stengeryte says.
(miriam.mukuru@wsj.com)
Contact: London NewsPlus, Dow Jones Newswires;
(END) Dow Jones Newswires
January 11, 2024 12:45 ET (17:45 GMT)
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