11th Oct 2024 12:12
(Alliance News) - London's FTSE 100 was down heading into Friday afternoon, with Sainsbury's struggling, as US banking results kick off the third quarter earnings season.
The FTSE 100 index was down 17.91 points, 0.2%, at 8,219.82. The FTSE 250 was down marginally at 20,704.76, and the AIM All-Share was slightly higher at 734.85.
The Cboe UK 100 was down 0.2% at 823.63, the Cboe UK 250 was little changed at 18,188.03, and the Cboe Small Companies was up 0.1% at 16,746.36.
In European equities on Friday, the CAC 40 in Paris and the DAX 40 in Frankfurt were both 0.1% higher.
Against the dollar, the pound rose to USD1.3062 at midday on Friday, from USD1.3052 at the time of the London equities close on Thursday.
According to the Office for National Statistics, UK gross domestic product expanded 0.2% on-month in August. The UK economy had tread water in July from June.
The August growth was in line with the FXStreet cited consensus.
Danni Hewson at AJ Bell said after two months of "flatlining" it will be "welcome news" to the government that forward economic momentum returned in August.
But she cautioned the broader picture is of a country still "trudging along, finding it hard to change gear. And there’s concern that August was a blip, and that September’s numbers will herald a return to the flatline that seems to have become the new normal."
The euro stood at USD1.0933, against USD1.0929 at the time of the European equities close on Thursday. Against the yen, the dollar was trading at JPY149.05 compared to JPY148.47.
Stocks in New York were called lower. The Dow Jones Industrial Average was called down 0.2%, the S&P 500 index down 0.1%, and the Nasdaq Composite down 0.3%.
Results from JPMorgan and Wells Fargo are hitting the wires as the third quarter earnings season kicks off. Bank of America, Goldman Sachs and Morgan Stanley follow next week with investors eyeing share buybacks, revenue growth and provisions as a gauge for how the US economy is faring.
Ahead of those, Blackrock reported third quarter revenue climbed 15% to USD5.20 billion from USD4.52 billion a year prior, beating a Bloomberg consensus of USD5 billion.
On London's FTSE 100, J Sainsbury fell 5.5% after Reuters reported its largest shareholder has cut its stake.
Citing a regulatory filing, Reuters said the Qatar Investment Authority will sell 109.4 million shares in Sainsbury's at 280 pence each. The sum represents roughly 5% of its stake in the company. It had around a 14% holding prior to the stake sale.
Dan Coatsworth, investment analyst at AJ Bell, said the fact the stock has fallen below QIA's placing price does suggest that some investors have been "spooked" by the news, "wondering why the biggest shareholder is reducing its position at this point in time."
BP shares fell 0.3%. It said it expects net debt to be higher at the end of the third quarter, primarily due to less profitable refining activities.
In a trading update, the London-based oil major said weaker refining margins will hit earnings in the customers and products segment by between USD400.0 million to USD600.0 million compared to the prior quarter, and that the oil trading result is expected to be weak.
Brent prices were weaker over the course of the third quarter, BP noted. The North Sea benchmark averaged USD80.34 a barrel in the third-quarter, down from USD84.97 in the second.
Net debt will also be increased by the re-phasing of around USD1 billion of divestment proceeds into the fourth quarter, the firm said.
Miners were a broadly firmer feature, with Rio Tinto up 0.9%, Anglo American up 0.8% and Fresnillo up 0.7%.
On Saturday, China's Finance Minister Lan Fo'an is set to hold a briefing on fiscal policy in Beijing amid hopes of a much anticipated fiscal stimulus.
But Stephen Innes at SPI Asset Management struck a cautious note.
"If the much-anticipated fiscal reveal turns out to be more talk than action, investors could be in for a brutal Monday wake-up call. In that scenario, the blistering rally in Chinese stocks over the past two weeks could completely unravel in spectacular fashion.
Elsewhere, Saga jumped 11% as it confirmed it is in exclusive talks with Brussels-based insurer Ageas for a 20-year partnership for motor and home insurance.
In addition, another pact could see Ageas acquire Saga's Insurance Underwriting business, Acromas Insurance, the firm said.
Saga, a provider of products for over 50s such as insurance and holidays, stands to receive as much as GBP140 million for the partnership with Ageas, GBP80 million upfront and GBP30 million worth of performance-based considerations in each of 2026 and 2032.
But THG struggled, falling 5.3% after announcing disappointing trading numbers alongside a fund raise which will facilitate the demerger of its tech arm, Ingenuity.
The Manchester-based e-commerce retailer said it has raised GBP95.4 million in gross proceeds from an "oversubscribed and upsized fundraise" in which it placed 194.7m new shares at 49p each, a 5.2% discount to its closing price on Thursday. On Thursday, it had announced plans to raise GBP75 million.
Ingenuity, the firm's technology platform, will trade as a standalone independent private entity and have no recourse to THG post demerger.
In addition, THG issued a third quarter trading statement late Thursday.
Revenue from continuing operations was GBP442.8 million in the three months ending September down 0.6% on-year at constant currency.
Citi said this was 3% below its expectations and it expects the consensus to move lower.
Brent oil was quoted at USD78.69 a barrel at midday in London on Friday up from USD78.23 late Thursday.
Gold was quoted at USD2,640.03 an ounce, higher against USD2,620.84.
Still to come on Friday's economic calendar US PPI figures at 1330 BST.
By Jeremy Cutler, Alliance News reporter
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