FTSE 100 falls from 2-week high
The FTSE 100 is down 0.3% this morning.
We have flash PMI data out of the UK, France, Germany and the wider euro area this morning. US PMI’s will then follow this afternoon, when we also have the Chicago Fed National Activity index.
The calendar gets busy this week, with the Federal Reserve, European Central Bank and the Bank of Japan all due to make interest rate decisions. Find out what to expect from the economic calendar in the Week Ahead.
Earnings season also continues with a flurry of big names from both sides of the Atlantic due to report, including Big Tech members Alphabet, Meta and Microsoft and UK banks Lloyds, Barclays and NatWest. You can find out all the top results to keep an eye on in Earnings This Week.
FTSE 100 analysis: Where next for the UK 100?
The UK 100, which tracks the performance of the FTSE 100, is falling after hitting a two-month high last week. We have seen in the index slip back below the 7,650 ceiling that held firm during the first half of June. This is the immediate target to recapture before 7,780.
On the downside, we could see the index slip back toward 7,560 if it remains under pressure, roughly aligned with the 50-day moving average. Any slip below here risks a move toward 7,450.
Top UK stock news
Vodafone is up 2.5% after it said revenue was down 4.8% in the first quarter at EUR10.74 billion, coming in ahead of the EUR10.58 billion forecast by analysts. Organic growth of 3.7% was also welcome as that was the fastest growth seen in years! Vodafone reiterated its full year guidance. Vodafone also announced that Luka Mucic, who was the chief financial officer of SAP until March 2023, will become its new CFO at the start of September.
Airlines and holiday providers such as easyJet, Jet2 and TUI are down 0.3% and 4.3% as wildfires ravage the Greek islands of Rhodes and Corfu. Around 19,000 people have been evacuated from Rhodes, according to the BBC, and sea evacuations have begun in Corfu, according to Sky News.
Ocado is trading 0.6% higher. The firm announced it has reached a settlement with AutoStore about the duo’s dispute over intellectual property. The pair have been locked in a battle for years but both have agreed to settle. Details are confidential, but both companies have ‘complete freedom’ to access and use each other’s technology involved in the dispute while AutoStore has agreed not to make or use a single-space cavity robot anywhere where Ocado has patents. AutoStore will also pay Ocado £200 million over two years.
GSK is up 0.2% after it said its HIV subsidiary ViiV Healthcare has secured a positive opinion from a committee of the European Medicines Agency, which has recommended that cabotegravir long-acting injectable and tablets for HIV prevention receive marketing authorisation.
Anglo American is down 0.2% after its subsidiary, Anglo American Platinum, reported adjusted Ebitda of around $730 million in the first half of 2023. That should contribute around $670 million to Anglo American’s Ebitda. Anglo American reports results on Thursday, when it is forecast to report a 39% year-on-year drop in adjusted Ebitda to $5.3 billion and net earnings are estimated to almost halve to $2.0 billion.
South32 is down 2.9% after production of all commodities grew sequentially in the fourth quarter of its financial year. Copper output was up 12% from the previous quarter as operations stabilised following adverse weather conditions and other temporary disruptions. South 32 also said it will book a non-cash impairment against its Hermosa project of around $1.3 billion as it updated the mineral resource estimate at the Taylor deposit that sits within the project, which rose 41% from the previous estimate.
Cranswick is up 2.3% after revealing it expects to beat expectations over the full year following a strong start, with revenue rising 14.7% in the 13 weeks to June 24. ‘The group has made a strong start to the year with momentum continuing into the second quarter with demand remaining resilient in our core UK categories as the UK consumer continues to recognise the quality, value and versatility of our pork and poultry product ranges. Whilst the board remains cautious about current market and wider economic conditions, the outlook for the current financial year ending 30 March 2024 is now expected to be ahead of its previous expectations,’ said Cranswick.
Moneysupermarket.com Group is up 0.6% after it said it has returned to dividend growth after upping its interim payout by 3% to 3.2p as it reported higher revenue and profits in the first six months of 2023. Revenue rose 11% to £213.8 million and adjusted Ebitda was up 20% at £67.7 million. Profit after tax at the bottom-line came in 22% higher at £41.0 million. It said higher interest rates has knocked demand for mortgages and loans, while also impacting broadband. But this was countered by strong demand for car and travel insurance. It said it is ready for consumers to start switching energy companies again, although said this is not anticipated to happen in 2023.
S4 Capital is down 0.1% after warning earnings will grow at a much slower pace than hoped this year following a weak start. The company said it is now expecting like-for-like net revenue growth of just 2% to 4% this year, down from its previous goal of 6% to 10%. Its operational Ebitda margin will also be lower at 14.5% to 15.5%, having originally aimed for 15% to 16%.
Compass Group is down 0.2% after launching a new share buyback programme that will see it repurchase up to £500 million of its own stock by November 14. That follows on from the £250 million programme that was completed earlier this month. Both of those together form the company’s £750 million programme announced back in May.
Assura is up 0.7% after it said it has moved on site to develop an £11 million ambulance hub in Bury St Edmunds, which will be let to East of England Ambulance Service NHS Trust. The 30-year lease will be subject to RPI-linked rent reviews every three years.
Greencoat UK Wind is up 0.4% after investing £717 million in a 25% stake in the London Array offshore wind farm from Orsted. The project was commissioned in May 2013 and has a capacity of 630MW. It will be partnering RWE, CDPQ and Masdar.
International Distribution Systems has been upgraded to Hold from Sell by Peel Hunt, which lifted estimates for it international GLS arm following a re-rating at peers FedEx and UPS. The price target was hiked to 260p from 190p. The Royal Mail owner is down 0.1% this morning at 263.4p
Bodycote has been upgraded to Add from Hold by Numis, which has a price target of 730p on the company. The metal finisher is down 0.4% this morning at 674.50p.
Melrose Industries has been cut to Add from Buy by Numis Securities, which has a price target of 570p on the company. The aerospace business is down 0.4% today at 527.80p.
Persimmon has been upgraded to Neutral from Sell by Citi, which has a price target of 1,133p on the housebuilder. The company is up 0.7% today at 1,176.59p.
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