FTSE 100 closes flat, ends week down
The FTSE 100 closed close to flat today at 7,683.91, after gains were erased in the afternoon.
The leaves the index down 0.4% for the week, after a strong rally last week.
Ocado was the biggest riser today after a dramatic fall yesterday. Safety equipment firm Halma was the biggest faller.
City Voices: Hopes for a constructive AI safety summit are fading following Sunak’s watered-down green pledges
Rishi Sunak this week delivered a hasty press conference at Downing Street where he unveiled a bonfire of green regulation.
The move was roundly condemned by big business leaders, who complained that they had already poured oodles of cash into their net-zero plans, and desperately needed certainty from government. Those who didn’t comment may be quietly breathing a sigh of relief that they have more time to go green.
But whether Sunak’s looser approach to environmental goals proves a vote winner or not, it is diminishing his status on the world stage.
London Fashion Week lifts footfall and sales in the city centre
London Fashion Week helped boost shopper numbers in the city centre, figures suggest, with footfall up 17.8% on one of its five days.
Many fashion fans who went to the event, which ended on Tuesday, also visited upmarket stores, pushing up revenues for a number of retailers.
Analytics group MRI Springboard said footfall in central London on LFW days rose by an average 7.3% on the same days the week before, compared with a 1.2% rise across all UK high streets. Saturday saw the largest jump in the capital, up 17.8% on the same day a week earlier.
Hopes for the high street and the economy rise as economic gloom lifts
There was a run of better news from the high street today, as improving retail sales and a brighter consumer confidence report provided the latest signs of hope for the economy.
It came at the end of a potentially pivotal week. The Bank of England left interest rates on hold for the first time in almost two years yesterday, in a clear sign that policymakers think they are winning their long fight against inflation.
Shoppers getting their wardrobes ready for autumn and snapping up back-to-school bargains helped August retail sales rise 0.4% , led by a 2.3% rise in clothing, with food up 1.2%. World Cup football gave the figures a boost, with an England team in a final for the first time since 1966 helping to keep tills ringing after a spending washout a month earlier.
City Voices: Is the cost-of-living squeeze coming to an end?
“For much of my first year as one of the Evening Standard’s City Voices, I have been warning about the economic pain to come,” Paul Dales writes. “There’s still a bit of that in the pipeline. But two developments this week have convinced me that we are at the beginning of the end of the economic squeeze on households.
“First, the fall in consumer price inflation from 6.8% in July to 6.7% in August announced on Wednesday took it further below the annual growth rate of average earnings in July (the latest data available) of 8.5%. This means that for only the second month since November 2021 “real wages” rose.
“Put another way, after almost two years in which the increases in wages were not keeping pace with the increases in prices in the shops, households’ living standards are now climbing again. This doesn’t mean the cost-of-living crisis is over (more on that below) but it means we are at the beginning of the end.”
Lloyds higher as FTSE 100 steadies, Ascential up 6%
Lloyds Banking Group shares today rose 0.6p to 45.1p after Deutsche Bank analysts backed the UK’s biggest lender with a 62p price target.
An already low valuation and stable deposit base means the bank’s analysts see enough leeway to compensate for mounting risks as the Bank of England begins to normalise monetary policy.
Lloyds shares rallied 2% or 0.6p to 45.1p, well ahead of NatWest after Deutsche Bank cut its target from 370p to 320p. The state-backed bank edged 1.7p higher at 241.4p today.
The improvement came as the FTSE 100 index overcame overnight Wall Street jitters to post a rise of 24.22 points to 7702.84.
The weak US handover, which reflected fears that the Federal Reserve will keep interest rates high in 2024, saw the S&P 500 index close 1.6% lower and the Vix index of volatility rise for a fifth consecutive day.
Despite these pressures, London’s tech-focused stocks Auto Trader and Rightmove added 2% and the grocery warehouse company Ocado put back 30p at 677.8p after falling heavily yesterday.
The UK-focused FTSE 250 index fell by 25.76 points to 18,612.79.
The best performing midcap was the former EMAP business Ascential, which rose 6% or 11.3p to 201.6p as the success of its Cannes Lions and Money20/20 events helped it report a 17% improvement in half-year underlying earnings.
Comptoir dives after swinging to loss
Shares in Lebanese restaurant group Comptoir plunged as much as 20% this morning after the firm swung to a pre-tax loss of more than £1.2 million for the first half of the year.
The London Bridge based business, which operates 26 restaurants under the Comptoir Libanais, Kenza, Shawa and Yalla Yalla brands, said sales had been hurt by train strikes and dismal summer weather.
Comptoir offered shareholders scant certainty over its future trading, saying little more than that it “would look to grow” in the second half of the year and that the board has “confidence in its prospects.”
Recession warning as private sector output slows further
UK private sector output is falling further in September in the latest sign the Bank of England may have raised interest rates high enough, according to a key indicator.
The S&P Global / CIPS Flash United Kingdom PMI recorded a reading of 46.8 for September, the lowest in almost three years and below economists’ expectations, as well as down from August’s surpisingly poor reading. Any figure below 50 represents a decline in output.
The dominant service sector missed expectations with a reading of 47.2, also the worst month in almost three years. Manufacturing picked up slightly, but remained firmly in decline.
Chris Williamson, chief business economist at S&P Global Market Intelligence said: “The disappointing PMI survey results for September mean a recession is looking increasingly likely in the UK.
“The steep fall in output signalled by the flash PMI data is consistent with GDP contracting at a quarterly rate of over 0.4%, with a broad-based downturn gathering momentum to hint at few hopes of any imminent improvement.”
Like this morning’s retail sales figures, the decline in private sector output will validate the Bank of England’s decision yesterday to pause its interest rate hikes, as signs the economy is already slowing grow.
FTSE 100 steadies despite US slump, Rightmove up 2%
The FTSE 100 index today showed resilience at the end of a busy week of central bank developments.
London’s top flight initially fell to 7652 on the back of last night’s poor Wall Street session before a rally to 5.41 points higher at 7684.03.
The UK-focused FTSE 250 index also improved on its position at the opening bell to settle 28.97 points lower at 18,609.58.
Auto Trader and Rightmove led the FTSE 100 with gains of 2% while Lloyds Banking Group added 0.4p to 44.8p after Deutsche Bank backed the lender with a 62p target price.
Cannes Lions events business Ascential topped the FTSE 250 index, up 6.6p to 196.9p following a 17% rise in half-year underlying earnings.
Mothercare woes go on as sales fall in Middle East
Mothercare’s troubles showed no signs of slowing, as the retailer blamed “continuing challenges” for its Middle Eastern franchisees for sliding sales.
The business, which licenses the Mothercare brand abroad since the UK high street arm collapsed, saw sales fall by 15% in the six months to mid-September, to £132.5 million.
Mothercare says it is in discussion with prospective lenders “to ensure that the group has adequate and appropriate financing for the future”.
The shares lost another 15.7% to 3.5p. The business, once worth £7.5 billion, is now valued at £24 million.
