FTSE 100 under pressure, 3% jump for JD Wetherspoon
The FTSE 100 index has fallen by a bigger-than-expected 1%, down 77.63 points to 7421.97 amid fragile stock market conditions.
Shares under pressure included Barclays, which dropped another 3% or 4.25p to 135.5p and HSBC after declining 9p to 539.2p.
Engineering group Smiths rose 28p to 1743.5p after forecasting annual revenues growth of at least 8%, up from January’s 7% estimate and 4-4.5% at the beginning of the year. The interim results showed operating profit growth of 27.4% and a 5% hike in dividend to 12.9p a share.
In the FTSE 250 index, half-year results helped JD Wetherspoon shares jump 3% or 40.6p to their highest level since last summer at 621.6p.
The pub chain returned to the black with a surplus of £4.6 million but profits remains well down on pre-pandemic levels. However, chairman Tim Martin said trade for the last seven weeks was 9.1% above the equivalent period in 2019 and 14.9% above the equivalent period in the last financial year.
Richard Hunter, head of markets at Interactive Investor, said: “Prospects for the group, like its margins, remain finely balanced, with the market consensus of the shares as a hold suggesting that investors will cautiously await more fruitful developments.”
Games Workshop hands shareholders £40 million divi
Board game maker Games Workshop has handed a further £40m in dividends to shareholders, bringing its total dividends this year to £138m.
The maker of Warhammer 40,000 will pay a dividend of £1.20 per share, thanks in part to a £12m French tax rebate. It said this was part of its policy of “distributing truly surplus cash”.
The company also said its trading for the three months to the end of February were in line with expectations.
FTSE 100 remains under pressure amid rates uncertainty
European stock markets are poised to open lower as the uncertain mood continues at the end of a week dominated by interest rate decisions in the UK and United States.
US markets recovered some ground yesterday as the Nasdaq Composite rose 1% and the S&P 500 index finished 0.3% higher.
The FTSE 100 index closed 67 points lower last night and is forecast by CMC Markets to open down another 40 points at 7459 this morning.
CMC’s chief market analyst Michael Hewson said: “Equity markets on both sides of the Atlantic have experienced a great deal of chop these past few days as investors look for clues as to where we go next when it comes to an overall sense of direction.
“Over the past week, we’ve seen central banks raise rates again, however, there appears to be a sense that we may well have seen or be close to the peaks when it comes to the rate hiking cycle.
“This is being reflected in sharp declines in short-term yields, however, markets also appear to be pricing in the prospect of rate cuts this year. This seems somewhat premature and something that stock markets have yet to price.”
Tui aims to pay down debts with discounted share offering
Travel agent Tui aims to raise €1.8 billion by offering shares at a 40% discount, so it can pay down the huge debts it built up during the pandemic, when it had to be bailed out by the German government.
The company will offer 328.9 million new shares at a price of €5.55 per share, a sharp discount from market price.
As of the end of 2022, Tui’s net debt was €5.3 billion.
Consumer confidence shows recovery
The latest consumer confidence report from GfK continues to point to poor sentiment as wages fail to keep pace with price growth.
However, a reading of minus 36 is the best level in a year and up from the record low of minus 49 in September and February’s minus 38.
The outlook for personal finances weighed on today’s score, with further pressure looming after yesterday’s latest hike in interest rates.
Retail sales stronger than forecast in February helped by discounting in department stores
Retail sales fell year-on-year in February, but not by as much as economists expected, in another sign of resilience in the UK economy a day after the Bank of England raised interest rates, sticking with its fight against inflation.
Sales in the month were down by 3.5% year-on-year, less than the 4.7% forecast and the 5.1% decline in January. On a Month-on-month basis, they rose by more than expected, up 1.2% rather than the 0.2% forecast and January’s 0.9% monthly rise.
The Office for National Statistics said Non-food stores sales volumes rose by 2.4% over the month because of strong sales in discount department stores. Fuel sales volumes fell by 1.1% in February 2023 following a rise of 1.1% in January 2023 when rail strikes may have increased car travel.
The numbers follow the BoE’s determination to vote through a quarter-point rate rise to 4.25% yesterday as it prioritised its bid to tame inflation — which was unexpectedly stuck in double digits, at 10.4% this week – over worries about turmoil in parts of the global banking sector.