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FTSE 100 stumbles again as Bunzl gets pulped

The record-breaking recent rallies seen across the global markets seems to have come to an end this week...
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It's been a bad day for most stock markets around the world, with nearly all nursing losses
  • FTSE 100 down 51 points to 7,433

  • Burberry and Bunzl punished

  • Uber loses drivers' rights appeal

  • UK economy grew 0.5% in three months to October

Close ... 51 point fall for Footsie

A late rally managed to trim the FTSE 100's losses but it was still a bad day for the blue-chip index.

The Footsie closed at 7,433, down 51 points, with Bunzl and SSE the two hardest hit first-liners; the former after a broker downgrade and the latter after results.

3.25pm...FTSE 100 heads lower for second day in a row

For the second day in a row the FTSE 100 has struggled, with earnings season over and little economic data to push the index higher.

As it is, the blue chips have seen their recent record breaking run stumble towards the end of week.

It’s not a problem that’s confined to the City of London, most major stock markets around the globe are nursing losses.

Bunzl and Burberry battered

Distribution giant Bunzl PLC (LON:BNZL) was hammered by the markets today after it was downgraded by American banking heavyweight Morgan Stanley.

Analysts there – which lowered their rating to ‘underweight – reckon Amazon’s intention to target the business-to-business distribution sector could hit Bunzl’s earnings.

The note wiped 5.2% off the value of the company, leaving shares at £21.82.

There was follow-through selling of shares in Burberry Group PLC (LON:BRBY) (down 4.2% to £17.12) that piled on the agony of a 10% slide in shares of the luxury fashion chain on Thursday following its poorly received strategy update.

This has led to across-the-board profit downgrades today with the company’s focus on sharpening its image likely to restrict bottom-line growth.

Scottish energy giant SSE plc (LON:SSE) was also out of favour, down 2.6% to £13.58 just two days after confirming it will merge its domestic business with Npower.

The FTSE 100 as a whole is down 46.6 points, or 0.6%, to 7,437.5, although there were a few stocks (literally) helping to limit the losses.

Housebuilders boosted by Galliford Try outlook

A study from the Royal Institution of Chartered Surveyors which painted a gloomy picture of the UK housing market sent the housebuilders plunging earlier in the week.

They’ve bounced back today though and dominate the FTSE 100 risers – albeit there isn’t too much competition – thanks to a bullish update from Galliford Try plc (LON:GFRD) which said it “continues to see good market conditions”.

Barratt Developments PLC (LON:BDEV) was the top blue chip riser, up 1.2% to 619p, while fellow housebuilders Berkeley Group PLC (LON:BKG) (up 0.5% to £36.03) and Persimmon PLC (LON:PSN) (up 0.4% to £26.72) also crept higher.

J Sainsbury plc (LON:SBRY) took a bit of a beating on Thursday after it lowered its interim dividend following a 9% decline in profits. The supermarket has recovered a bit today though and is currently up 0.7% to 230.8p.

 

3pm...US stocks follow Europe lower

Over on Wall Street, the Dow Jones opened 0.3%, or 60 points, down at 23,402.1, while the broader S&P 500 shed 0.2% or 6.5 points to 2,578.3.

It wasn’t any better for the tech-heavy Nasdaq either which opened 0.2% or 24.7 points in the red at 6,724.9, as the mini-slump the global markets are experiencing rumbles on into a second day.

 

2.10pm...Hurricane Energy premium listing 'next sensible step'

Back to yesterday's news that AIM-quoted Hurricane Energy PLC (LON:HUR) is looking to move up to a premium listing on the London Stock Exchange.

Oil and gas expert Malolm Graham-Wood thinks it would be the "next sensible step" for the company.

 

2pm…UK economy picks up slightly in October

The UK economy grew 0.5% in the three months to October, according to the latest data from the National Institute of Economic and Social Research. That’s up from 0.4% in the previous quarter.

"Although economic growth is likely to be stronger in the second half of this year compared with the first, it's important to note that activity has slowed since last year and this at a time when growth in other OECD countries has strengthened," said Amit Kara of NIESR.

"Looking ahead, we expect the pattern of demand in the UK economy to rebalance towards international trade in response to strengthening global growth and weaker sterling and away from domestic demand."

 

1.45pm...Bitcoin falls

The price of Bitcoin has now fallen more than US$1,000 since it hit all-time highs on Wednesday.

As bitcoin fell, Bitcoin Cash – a clone of the original that was generated from another split on 1 August – surged, trading up as much as 35 percent on the day at around US$850.

Despite losing almost 7% so far this week, the cryptocurrency is still up more than 600% in 2017 alone.

 

1.25pm...Bakkavor revives London IPO

Supermarket food supplier and the UK's largest producer of hummus, Bakkavor (LON:BAKK) says it will now float in London, reversing its position from exactly a week ago when it cited market volatility to put a lid on the IP0.

It has now set an offer price of 180p a share to raise around £100mln, giving the group a market cap of £1bn. That's a reduction of the previous price suggested of 195p a share.

Its shares are planned to begin trading on the LSE on Thursday, November 16.

"This IPO represents a significant milestone in the development of Bakkavor," said chief executive Agust Gudmundsson.

Bakkavor specialises in ready-to-eat and ready-to-cook products and supplies big names like Tesco, Sainsbury’s, Marks & Spencer, and Waitrose.

 

12.45pm…US stocks to join global market slump

It’s been a rough couple of days for stock markets across the world and the US doesn’t look like it will buck that trend today.

Spread betting firms see the Dow Jons opening 46 points in the red at 23,407; the tech heavy Nasdaq is expected to shed 15 points to fall to 6,291; while the broader S&P 500 looks like it will lose 7 points to 2,576.

“It’ll likely be a quiet Veteran’s Day afternoon in the US, even if the markets are open,” said Spreadex analyst Connor Campbell.

“The Dow Jones is set to drop by 50 points when the bell rings on Wall Street, meaning it is in danger of falling below 23400 (it actually plunged towards 23300 at one point on Thursday).

“In terms of data, the preliminary UoM consumer sentiment reading is expected to creep higher, from 100.8 to 100.8 month-on-month.”

 

12.30pm...Uber to appeal

“Almost all taxi and private hire drivers have been self-employed for decades, long before our app existed. The main reason why drivers use Uber is because they value the freedom to choose if, when and where they drive and so we intend to appeal," said Uber's acting UK general manager Tom Elvidge.

“The tribunal relies on the assertion that drivers are required to take 80% of trips sent to them when logged into the app. As drivers who use Uber know, this has never been the case in the UK.

“Over the last year we have made a number of changes to our app to give drivers even more control. We’ve also invested in things like access to illness and injury cover and we’ll keep introducing changes to make driving with Uber even better.”

 

12.15pm...Uber loses ruling

Embattled taxi-hailing app Uber has lost an appeal againsat a ruling on the employment rights of its drivers.

The GMB Union has called the ruling by the Employment Appeal Tribunal a "landmark victory" for workers' rights.

Last year two ex-Uber drivers won a case after successfully arguing they were 'workers' and were therefore entitled to things like minimum wage and sick pay.

Uber challenged the verdict arguing that its drivers liked the flexibility of not being tied down.

 

12pm...Easyjet appoints former Tui deputy CEO as new boss

Low cost carrier Easyjet PLC (LON:EZJ) has appointed the former deputy chief executive of rival Tui (LON:TUI), John Lundgren, as its new boss.

Lundgren will replace current CEO Carolyn McCall who is leaving next month to take up the top job at broadcaster ITV plc (LON:ITV).

The markets have reacted well to the news, with shares up 0.6% to £12.77.

 

11.45pm...Alastair Ford on Connemara Mining and reinvigoration of Irish mining scene

Mining Capital's Alastair Ford says it's early days for Patrick Cullen at Connemara Mining PLC (LON:CON) but he's a man with a plan and is keen to get things moving.

''If you look at the Connemara share price graph over the past two months I don't think there's any argument that he has managed to get things moving'', Ford says.

''Shares have more than doubled and it looks like there's still some significant momentum behind it''.

 

11.30am...Bad day for the Bs...

The FTSE 100 this morning was brought to you by the letter B with bad news driving Bunzl (LON:BNZL) and Burberry (LON:BRBY) to the top of the fallers' list.

The former first: the distribution giant was on the receiving end of a downgrade by the American bank Morgan Stanley, which reckons its earnings could be severely holed by the relentless march of Amazon. The note wiped around 4% off the value of the company.

There was follow-through selling of shares in Burberry (down 4%) that piled on the agony of a 10% slide in shares of the fashion chain on Thursday following its poorly received strategy update.

This has led to across-the-board profit downgrades with the company’s focus on sharpening its image likely restrict bottom-line growth.

The index itself was down 22 points at 7,462.5 amid renewed Brexit worries following the decision to set a firm time and date for the UK’s Michael Jackson-esque Moonwalk out of the European Union.

The government confirmed it wanted an amendment to the withdrawal bill to set a fixed departure point of midnight Brussels time on 29 March 2019.

In other news, official figures revealed Britain’s trade deficit with the rest of the world narrowed in September as the nation finally appeared to benefiting from the weakness of the pound and stronger global growth.

The FTSE 100 opened flat 7,485.51 amid uncertainty over President Trump’s planned tax reforms and ahead of UK trade data.

Economists are expecting the gap between imports and exports to have narrowed to £4.5bn in September from £5.2bn the previous month.

On the market, traders were definitely not in forgiving mood as Burberry (LON:BRBY) was marked down a further 4% after Thursday’s wipe-out, prompted by the group’s strategy update.

Deutsche Bank, repeating its ‘hold’ recommendation, said it doesn’t expect the company’s profits to grow for the next two years amid the corporate house-keeping. But it thinks earnings will accelerate thereafter.  

Deutsche said it wasn’t downgrading its forecasts per se – simply pushing them out by two years. Hmmm.

6.45am...flat start predicted 

FTSE 100 is poised to open little changed after taking a hit yesterday along with global equities.

The UK blue chip benchmark closed down around 45 at 7,484, but today financial spreadbetters at IG Index are calling it to open its account 0.5 points higher.

On Wall Street the Dow Jones ended 101 points lower at 23,461 as the market fretted over the uncertainty of he planned US tax reforms.

Senate Republicans revealed a plan that was different from the former House of Representatives’ version, including  a cut to the corporate tax rate in 2019 rather than 2018.

It put a dampener on Asian trade too, with the Nikkei 225 in Japan shedding 172 points at 22, 696. In China, the Shanghai Composite Index is up though over seven at 3,434.

Investors will be looking to  industrial output figures for the UK, due to be released later this morning, which is likely to dominate the mood in early deals as well as any fall-out from the Brexit  issue as the two day meeting about the talks comes to a conclusion.

Solid service figures from the UK last week backed up that the Bank of England (BoE) were right to raise interest rates last Thursday.

"The BoE were dovish in their outlook, and traders aren’t factoring in another rate hike until well into 2018," said David Madden, at CMC Markets.

Elsewhere, there's not a huge amount on the corporate front. Big cap miner Vedanta Resources plc (LON:VED)  is expected to reveal a first half sales boost when it releases interims.

The natural resources firm last month announced a jump in production, with some 230,000 tonnes of zinc-lead metal output (up 27%) and 4.5mln ounces of refined silver (up 31%) for the three months.

Aluminium output hit record levels and copper was up significantly too.

Significant announcements on Friday:

Interim Results: Vedanta Resources Plc (LON:VED), Volex Group Plc (LON:VLX), Georgia Healthcare Group Plc (LON:GHG), Grupo Clarin (LON:GCLA), Castings PLC (LON:CGS).

Trading Statement: BBA Aviation PLC (LON:BBA)

AGM / EGM: Vinaland Ltd (LON:VNL), Tlou Energy Limited (LON:TLOU), Galliford Try plc (LON:GFRD).

Around the markets:

  • Sterling: US$1,3152, up 0.02%
  • Gold: US$1,283.30 an ounce, down 0.18%
  • Brent crude: US$57.10 a barrel, down 0.12%.

City headlines:

  • Rising price of cream proves sweet and sour at Dairy Crest - The Times
  • Brexit worries stop Jaguar from purring - The Times
  • U.S. and China sign trade deals worth $250 billion on Trump trip as he vows to change ‘unfair’ relationship - Independent
  • Uranium miners spike after Cameco suspends production at flagship mine - FT
  • Siemens misses Q4 revenue forecasts on trouble at power and gas division - FT
  • Reinsurer Munich Re logs €1.4 billion Q3 loss after string of natural disasters - FT
  • Amanda Staveley’s $1 billion lawsuit against Barclays postponed - FT
  • Deutsche Telekom leaves open possibility of T-Mobile U.S. deal - FT
  • Nvidia results buoyed by revenue jump in core gaming market - FT
  • National Grid pours investment into U.S. as U.K. political threat loom - Daily Telegraph
  • Uber float planned for 2019, says Chief Executive - Daily Telegraph.

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