UK stocks retreated in early trading with just half a dozen FTSE names trading up on last night’s close heading into the weekend. At 8.30am the benchmark was 26 points or 0.35% lower at 7,223 points, almost exactly where it closed on Monday.
Overnight, US markets ended at record highs but weak earnings from tech giants Amazon and Apple after the close sent index futures lower signalling a weak opening later today. After-market falls in Amazon and Apple suggested a drop of more than $200 billion in their combined market value when trading begins.
Brent crude prices stabilised at $84 per barrel while sterling was also steady around $1.3790 to the dollar.
COMPANY NEWS
High street lender NatWest Group (NWG) was the worst performer on the FTSE, dropping 3.3% to 224p despite posting better than expected third quarter revenues and earnings, as investors preferred to focus on a slight narrowing of the bank’s net interest margin.
Group income was £2.77 billion against forecasts of £2.6 billion while pretax profits reached £1.07 billion compared with consensus forecasts of £735 million. Chief executive Alison Rose highlighted economic growth, low unemployment and ‘limited signs of default’ for the beat.
In a brief third quarter trading update, copper and zinc producer Glencore (GLEN) maintained its full year output targets but raised its gross operating profit forecast to above the top end of its $2.2 billion to $2.3 billion long-term guidance range.
However, a weak backdrop for miners saw Glencore shares fall 1.7% to 353p.
Ostomy and wound care firm ConvaTec (CTEC) raised its full year revenue growth forecast and operating margin target after solid third quarter trading and ‘continued progress’ with its latest strategic plan, sending its shares 2.7% higher to 203p.
Sales are now seen rising by 5% compared with a previous forecast range of 3.5% to 5% while earnings before interest and tax are seen reaching between 18% and 19% of sales.
Technology hardware supplier Computacenter (CCC) reported trading in the third quarter was ahead of expectations, which combined with its fourth quarter outlook meant it was ‘very comfortable’ with its full year forecasts. Shares traded sideways at £27.45.
The firm also said product supply shortages were ‘not as severe as some market predictions’, although it had seen some delays in getting hold of components. Without these, ‘our expected record performance would be even stronger’, it added.
Meat packaging firm Hilton Food (HFG) reported trading in the third quarter had been in line with expectations with demand up in Australia and New Zealand due to greater in-home consumption but flat in Europe as more people ate out after the reopening of hospitality venues. Shares edged up 0.5% to £11.64.
The company also announced it had acquired UK Meat supplier Fairfax Meadow, which supplies the foodservice market, for £23.8 million. Although the business made a loss last year due to the impact of Covid, operating earnings were a respectable £4.4 million in 2019.
Insolvency and financial advisory firm Begbies Traynor (BEG:AIM) published its latest ‘Red Flag Report’ measuring financial distress among UK companies during the third quarter.
The report found 14% fewer businesses were in ‘significant’ financial distress compared with the second quarter, but many more companies were being chased through the courts for outstanding debts which it said ‘paints a gloomy picture’ for future insolvencies.
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