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FTSE 100 Live: Fresh retail blow as Joules heads into administration

 (Evening Standard)
(Evening Standard)

Struggling retailer Joules today revealed it is to go into administration after failing to secure additional financing.

Shares in the Leicestershire-based company, which was set up in 1989, have been suspended ahead of the expected appointment of Interpath Advisory as administrators.

The plight of Joules comes at the start of a huge week for the UK economy, with unemployment and inflation figures on Tuesday and Wednesday before chancellor Jeremy Hunt’s autumn statement on Thursday.

FTSE 100 Live Monday

  • Joules set to appoint administrators

  • FTSE 250 recovery stalls

  • S4’s Sir Martin Sorrell upbeat on trading

FTSE 100 touches day-high as Wall Street holds firm

15:48 , Michael Hunter

London’s FTSE 100 took heart from a steady showing on Wall Street to touch some of the best levels for the day in late trade.

The move higher came after the S&P 500 in New York ticked only marginally lower after its strong rally at the end of last week, which had been powered by hopes that the fight against inflation in the US was starting to kick in.

As the optimism held there, European stock indices moved higher. The main UK share market tracker rose by 93 points in afternoon trade to 7411.99, a rise of over 1%.

Media stocks got a boost from an upbeat trading statement from Infoma, the business publisher. It rose over 6%, or 34p, to 587p.

Dollar earners were also stronger, as the pound fell back toward $1.17 after its advance last week. Rolls-Royce was up almost 4%, or 3p, to 92p. Imperial Brands, the cigarette maker due to report profits later this week, rose 3.2% to 2056p, a rise of 63p. Sterling was down 1% at $1.1722.

At the start of a blockbuster week for the UK economic data, some of the stocks more sensitive to the outlook for UK interest rates were under pressure. Barratt Developments, the house builder, was down 5p to 407p, a loss of 1.3p.

Wall Street stocks slip as caution returns and momentum fades from soft-looking inflation data

14:44 , Michael Hunter

New York’s S&P 500 eased in opening trade, with investors unwilling to take last week’s strong rally much further, amid a cautious feel to trade as the presidents of the US and China met ahead of a full summit of the G20 leading economies.

The broad US stock index started the day down by about 17 points or 0.4% to 3975.43. The slip also came after signals from the Federal Reserve over the weekend that the end of the central bank’s interest rate tightening cycle remained distant, even after reassuring inflation data last week.

London braced for a blockbuster week of economic events

14:39 , Michael Hunter

It’s a blockbuster week for the economy, with a series of set-piece events that could set the tone for the rest of 2022, as Londoners brace for a tough winter with a recession already potentially underway.

On Tuesday, we’ll find out the impact the slowdown has had on the jobs market and on average earnings. The number of people employed in the third quarter is expected to have dropped by 25,000, down from a drop of 109,000 in the previous three months. That would leave the unemployment rate at 3.5%, in a further sign of the jobs market’s resilience as the downturn teeters on the brink of becoming a full recession.

Inflation takes the spotlight again on Wednesday at 7am. It has been driving the cost-of-living crisis and the economic slowdown alike throughout the year, intensified by Russia’s invasion of Ukraine, which sent global energy prices soaring. The consumer price index for October is expected to rise further into double-digits, reaching 10.7% from 10.1% for September.

The main event for the week comes on Thursday in Westminster, with hotly anticipated Autumn Statement on the country’s finances. It will star Chancellor Jeremy Hunt, the man who took a wrecking ball to the short-lived government of Liz Truss and its “mini”-Budget, which caused a run on UK financial assets and led to Rishi Sunak moving into Downing Street.

Hunt is expected to outline a series of measures -- including both tax rises and spending cuts --  to plug a hole in the public finances thought to have widened to around £60 billion.

More comment and analysis on the Autumn Statement here

New York rally set to falter as momentum from softer inflation data fades

12:52 , Michael Hunter

Wall Street stocks looked set to fall back at the start of US trade after a strong rally last week fuelled by softer US inflation data.

There was a more cautious feel to trade as investors kept watch on bilateral meeting between the presidents of the US and China at a time of building tensions between the world’s two great powers. The face-to-face encounter came ahead of the G20 summit of the world’s leading economies being held this week on the Indonesian island of Bali.

According to futures trade, New York’s S&P 500 will slip 11 points in opening trade to 3982.1, a slip of 0.3%.

Informa update lifts shares 6%, FTSE 250 down 1.5%

10:15 , Graeme Evans

Informa shares are up 6% or 33p to 585.6p after the business intelligence and exhibitions firm revealed it is on track to beat guidance for annual revenues and profits.

The FTSE 100-listed company reported underlying sales growth of 41% so far this year and said it is well placed for “continued growth and acceleration in 2023”, particularly with China’s Covid reopening still to come.

Its trade events include London Tech Week and the Fort Lauderdale International Boat Show. Excluding China, Informa’s live and on-demand gatherings are back to about 85% of 2019 revenue levels, stronger than the company expected at the start of the year.

Informa has also been boosted by strong progress in academic markets through brands including Taylor & Francis. The shares have recovered from just above 500p in late September, but analysts at UBS have a price target of 654p.

Its strong performance came as the FTSE 100 index reversed some of last week’s underperformance by adding 26.23 points to 7344.27. AstraZeneca and GSK were higher in a turnaround from Friday, while technology stock Ocado consolidated the 14% jump in the previous session by adding 3.2p to 815.2p.

The UK-focused FTSE 250 index, which last week jumped 7% due to dollar weakness, surrendered some of those gains by falling 1.5% or 295.78 points to 19,320.43.

Stocks under selling pressure included Aston Martin Lagonda, which dropped 11.5p to 147.2p. Ukraine-based iron ore pellet supplier Ferrexpo also fell 9% or 13.1p to 135.1p after Credit Suisse cut its price target to 140p.

Belfast-based IT provider Kainos provided a bright spot, with its shares up 27p to 1465p as it reported continued strong demand alongside a 16% rise in half-year profits.

Sir Martin back on top

10:04 , Simon English

S4 Capital shrugged off recent woes and a wider tech sector sell-off today to report booming sales and to boast that is has ten “whopper” clients in the pipeline.

Sir Martin Sorrell’s digital ad business saw its shares halve on one day in July when it issued a profit warning that alarmed the market. Spiralling staff costs and accounting issues in particular concerned investors.

Today S4 said sales for the third quarter rose 27% to £300 million. And it believes market concern will help it attract new clients, including the ten “whoppers now in sight”.

A plunge in the shares of Facebook owner Meta and ongoing concern about the future of Twitter under new owner Elon Musk have clouded investor sentiment about online advertising.

Sir Martin said: “Despite the current macro political and economic gloom and slowing tech growth, our top-line momentum has been more than maintained in the third quarter and remains relatively strong into the fourth quarter.”

He added: “We believe this changing market environment will continue to offer significant growth opportunities given our client profile, relative size and disruptive model.”

S4 shares rose 7p to 217p today. They are down 35% this year.

“Whoppers” refers to clients worth more than $20 million in revenue a year. Existing clients include TikTok, Diageo and BrewDog.

Sir Martin, regarded as an economic sage in some quarters, says there is a “likelihood of recession in some parts of the world”.

S4 had to delay publication of its 2021 results earlier this year after auditor PwC said it could not sign them off. That issue appears to have been resolved.

Informa leads FTSE 100 rally, Ocado consolidates gains

08:50 , Graeme Evans

The FTSE 100 index has reversed some of last week’s underperformance, climbing by 0.8% or 58.90 points to 7376.94.

Events business Informa led the top flight, lifting 8% or 44.6p to 597.2p after reporting 41% revenues growth for the year to date and increasing its full-year profits guidance.

AstraZeneca and GSK were higher in a turnaround from Friday, while Ocado built on the 14% jump seen in the previous session by adding 6.4p to 818.4p.

The FTSE 250 index rose 7% last week but drifted 33.22 points to 19,852.99 today, with Ukraine-based iron ore pellet supplier Ferrexpo the biggest faller after Credit Suisse cut its price target. Shares fell 6% or 9.6p to 138.6p.

Bitcoin steadies after FTX sell-off

08:22 , Graeme Evans

The bitcoin price today improved 3% to just below $17,000, having fallen from over $20,000 in the wake of last week’s collapse of FTX.

Hargreaves Lansdown analyst Susannah Streeter said: “Although the immediate storm following the collapse of the huge exchange FTX has subsided, the destruction left in its wake has been considerable and crypto speculators hit hard by these recent losses will be licking some painful wounds.

“This is a painful reminder that the crypto wild west is still a fragile niche in the larger financial system, where money is being bet on highly speculative assets.”

Bitcoin traded above the $60,000 threshold this time last year and above $30,000 as recently as May.

FTSE 100 seen higher, big week for UK economy

07:45 , Graeme Evans

The pound starts a big week for the UK economy at $1.176, having rallied sharply in recent days after weaker-than-expected US inflation figures put pressure on the dollar.

The currency movements boosted the UK-focused FTSE 250 index, which rose 1.2% on Friday and finished the week almost 7% higher.

In contrast, the FTSE 100 index fell 0.8% on Friday following big declines for pharmaceutical stocks GSK and AstraZeneca. The top flight was slightly lower across the week, although CMC Markets expects a rise of 16 points to 7334 at today’s opening bell.

This week’s performance by UK-focused stocks is likely to be swayed by the reception of investors to the tax rises and other plans in Thursday’s autumn statement. They will be accompanied by the latest projections from the Office for Budget Responsibility.

Unemployment and inflation figures on Tuesday and Wednesday respectively will also provide a steer on the next interest rates move from the Bank of England. The jobless rate is likely to remain near to 3.5%, with the inflation rate forecast to rise from 10.1% to 10.6%.

Fashion brand Joules appoints administrators

07:28 , Rhiannon Curry

Joules, the fashion brand famed for its country casual wellies and coats, has appointed administrators after failing to secure a new financing deal to shore up its trading.

The company revealed last week that it was in discussions with a number of investors to try and raise cash after a mild autumn and fading consumer confidence dented its sales.

But on Monday it said those discussions had not been successful, and so administrators Interpath Advisory would be taking control in order to protect its creditors.

Shares in the company have been suspended.