UK stocks get off to a weak start on Thursday following declines in Asia and falls in US index futures as US Treasury yields topped 3.2% for the first time since 2011.
Stronger-than-expected US payroll data yesterday and high oil prices are stoking fears of higher interest rates ahead.
An increase in the Treasury yield, commonly seen as the ‘risk-free’ rate for investing, tends to be negative for other asset classes including shares.
Car testing specialist AB Dynamics (ABDP:AIM) pleases the market with its latest trading update. Sales and pre-tax profits are now expected to ‘significantly exceed’ analysts’ forecasts. The shares rally 14.8% to £14.73.
Shares in healthcare company BTG (BTG) are up 5.4% to 589.5p on strong first-half sales of its vascular and cancer treatments. Sales for the full year are now seen at the top of the company’s previous guidance range.
Sofa-seller DFS Furniture (DFS) delivers weak full year results with pretax earnings down almost 50% to £25.8m against last year’s £50m and analysts’ forecasts of £42m.
Sales are down 2% with the company flagging an ‘exceptional downturn in market demand’ in the final quarter. After losing 10% at the open the shares staged an impressive recovery to trade flat on the day at 210p with investors seeming to give the company the benefit of the doubt.
Budget airline EasyJet (EZJ) posts September traffic numbers up 14.2% to 8.8m passengers compared with 7.7m in the same month last year although the load factor (the number of bums on seats relative to the number of seats available) dipped slightly. The shares ease back 2.5% to £11.87 continuing their recent descent.
Shares in specialty-chemical maker Elementis (ELM) drop 12.3% to 231.6p on the admission of new shares which were issued to pay for the acquisition of Mondo Minerals.
Electronics distributor Electrocomponents (ECM) reports strong growth in the second quarter with like-for-like sales up 11%, continuing the trend set in the first quarter.
Strong end-markets, good execution and the recent acquisition of IESA mean first-half pre-tax profits should reach £100m against £79m last year. Shares firmed 5% to 755p after tracking sideways last month.
Doorstep lender Morses Club (MCL) reported steady growth in first-half sales to £57.5m against £54.2m last year with the net loan book growing slightly and customer numbers flat. Shares continued their recent recovery adding another 4% to 147p.
Fashion brand Ted Baker (TED) shows a small increase in sales for the first half with online orders up 24% offsetting UK and European in-store sales up just 1% and US sales up less than 2%.
Conditions on the High Street remain ‘challenging’ but the company maintains it is well-positioned to ride out current weakness. Investors disagree however with the shares down 11% in early trading to £20.45.
Among stocks trading ex-dividend today are British American Tobacco (BATS), Bodycote (BOY), British Land (BLND), DS Smith (SMDS), Hays (HAS), Intertek (ITRK), Kingfisher (KGF), Rightmove (RMV), Smith & Nephew (SN.), Taylor Wimpey (TW.), TP ICAP (TCAP), Travis Perkins (TPK) and WPP (WPP).
