UK stocks started the week cautiously, in spite of a raft of earnings upgrades, after another weak session in Asia where stocks in China and Japan were down 2% and 1% respectively as the Evergrande saga rumbled on.
In energy markets, the focus was on the meeting of OPEC+ oil producers for any decision on whether to increase crude production, after a sharp rally in oil and gas prices this year. Brent crude futures were steady at $78.80 per barrel, close to last week’s three-year high.
By 8.45am the FTSE 100 index of leading stocks was 17 points or 0.25% lower at 7,010 points with weakness in financial and consumer stocks offsetting gains in airlines and health care.
COMPANY NEWS
The auction for supermarket group Morrisons (MRW) ended with CD&R pipping Fortress to the post by a penny with its 287p offer. Shares, which were trading at 297p on Friday in expectation of a higher counter bid, fell 3.7% to 286p.
However, Fortress said it was still interested in the UK grocery sector, sending shares in Sainsbury (SBRY) to the top of the leader board, up 2.5% to 290p. Czech investor Daniel Kretinsky currently controls 9.6% of Sainsbury’s shares, while the Qatar Investment Authority owns 14.4% of the company.
Contracts for difference trading platform Plus500 (PLUS) reported ‘further positive momentum’ in the third quarter and said full year revenues and operating profits would be above its previous forecasts. Shares climbed 3% to £14.23.
Media platform Future (FUTR) said it expected full year operating profits to be at the top end of expectations thanks to continued growth in digital advertising and sustained yield growth. Shares dropped 3.6% to £36.22, suggesting investors were hoping for more.
Shares in telecom giant BT Group (BT.A) fell 5.5% to 150p after weekend reports Sky was close to sealing a broadband deal with Virgin Media O2 to challenge BT's ultra-fast household service.
Property firm Segro (SGRO) unveiled an asset swap with Schroders with the acquisition of an urban warehouse estate in Park Royal, London, for £140 million in exchange for two ‘big box’ sites in Birmingham and Northampton for a price of £205 million. Segro shares eased 0.8% to £11.97.
Low-cost airline Ryanair (RYA) reported a doubling of passenger numbers in September to 10.6 million and an improvement in its load factor to 81% against 71% last year.
At the same time, rival Wizz Air (WIZZ) posted a 91% increase in passenger numbers for September to almost 3 million, with a load factor of 78% against 65% last year. Ryanair shares climbed 2.3% to €17.63 while Wizz Air shares added 0.5% to £52.38.
SMALL-CAP ROUND-UP
The takeover battle for waste management firm Augean (AUG) drew to a close with the decision by MSIL not to raise its bid, leaving the Eleia consortium to walk off with the prize for 372p per share.
Specialist retailer Cake Box (CBOX) delivered a positive first half update with strong trading online and in-store driving a 91% increase in revenues. The firm has continued to roll out new stores and has a sizeable pipeline of new franchisees. Shares jumped 7% to 360p.
Waste treatment firm Renewi (RWI) posted a bullish trading update for the six months to September and said full year earnings would be ‘materially’ above its previous guidance, sending its shares 4.5% higher to 624p.
Heavy plant rental firm VP Group (VP.) reported strong trading in its infrastructure and housebuilding divisions, while progress in general construction was impacted by labour and material shortages. The company left its guidance unchanged, sending shares 1.5% lower to £10.27.
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