The FTSE 100 recovered some earlier losses but still fell 0.37% to 5,906 by early afternoon on Tuesday as attention turned to this evening’s first US presidential debate between Donald Trump and Joe Biden.
Among the things to watch out for in the debate is comment from Trump on election integrity. Trump has repeatedly refused to say he will accept the results of the November election or commit to a peaceful transfer of power if he loses.
Investors fear there will be a lot of stock market volatility if either Trump or Biden disputes the election result.
It comes as the UK’s benchmark index actually defied expectations of a 16-point rise, following an overnight rally on Wall Street where the mood was described by analysts as ‘buy everything’, driven by institutional fund managers rebalancing their portfolios at the end of the quarter.
FERGUSON RESUMES DIVIDEND
In corporate news, the top riser in the FTSE 100 this morning was plumbing company Ferguson (FERG), which gained 6.5% to £78.99 as it resumed its dividend, citing a ‘strong’ financial position, even as it reported a fall annual profit pinned on the pandemic.
For the year ended 31 July, pre-tax profit fell 4.8% to $1.3 billion year-on-year as revenue slipped 0.9% to $22 billion.
Ferguson said it grew trading profit ahead of revenue despite lockdowns in the second half. Taking into account its prospects and financial position, the company said it restored its dividend the same level as 2018/19 of 208.2 cents per share.
B&M UPS GUIDANCE
General merchandise retailer B&M European Value Retail (BME) was the second biggest riser in the UK’s blue-chip index, with its shares up 4.5% to 512p after it lifted its earnings guidance as customers spent more money per visit.
First-half adjusted earnings before, interest, taxes and depreciation is expected to be above the previously guided range of £250 million to £270 million announced on 28 July, and now estimated to be approximately £285 million, the company said.
For the period from 29 March to 26 September 2020, revenue grew 25.3%, with B&M UK stores generating revenue growth of 29.5% including like-for-like growth of 23.0%.
Trading momentum at B&M UK stores were maintained in the second quarter, with 19.1% like-for-like growth in the quarter and an exit rate at a similar level, the company said.
GREGGS SEES IMPROVED SEPTEMBER AFTER SLOW AUGUST
High-street bakery chain Greggs (GRG) tumbled almost 8% to £11.22 as investors remained unimpressed with recent trading, even as the company said activity had picked in September following a slower August.
Like-for-like sales in Greggs company-managed shops had averaged around 71% of the 2019 level in the 12 weeks to 26 September.
In the most recent four weeks to 26 September like-for-like sales averaged 76.1% of the 2019 level, in line with planning assumptions while delivery represented 2.6% of company-managed shop sales in the most recent week to 26 September.
Greggs said it had returned to a positive net cash position during September, though reiterated that the outlook remained uncertain, with ‘rising Covid-19 infection rates leading to increasing risks of supply chain interruption and further restrictions on customer activities out of the home.’
OTHER COMPANY NEWS
Oil company Cairn Energy (CNE) traded flat at 104.5p by lunchtime even after it racked up a $323.5 million first-half loss owing to lower oil prices.
Auto retailer Pendragon (PDG) moved into the red, falling 4.2% to 7.16p having rallied 7% this morning even as it posted a first-half loss after the coronavirus pandemic hurt demand for travel as people isolated at home.
On current trading, however, Pendragon said it had swung to a pre-tax profit during the months of July and August amid a bounce back in demand.
Regeneration specialist St. Modwen Properties (SMP) dipped 0.6% to 310p on announcing that it had appointed Sarwjit Sambhi as its new chief executive.
Sambhi was most recently the head of power utility and British Gas owner Centrica's consumer business. He would take the reins from current interim CEO Rob Hudson from 2 November.
Furniture and flooring retailer ScS (SCS) slumped 8% to 202.4p as it swung to a full-year loss after the Covid-19 pandemic led to the temporary closure of its stores between March and May.
On current trading, ScS said its order intake was up 46% on a like-for-like basis for the first nine weeks of the new financial year to 26 September.
Respiratory drug focused company Synairgen (SNG:AIM) dropped 1.88% to 159.44p on announcing that it and pharmaceutical services company Clinigen (CLIN:AIM) had agreed to launch an access programme for a potential treatment for Covid-19.
The programme would be established for Synairgen's inhaled formulation of interferon beta, SNG001, in the UK and the EU for the treatment of hospitalised Covid-19 patients. Clinigen added 4.23% to 677.5p.
