FTSE 100 Closed Down 1% as Banking Sector Lags Market

The FTSE 100 closed down 1% Thursday weighed by the banking sector after Barclays noted a challenging end to 2023 for its investment banking division, while Citigroup also warned of a similar slowdown in revenue. "These warnings have served to weigh on the banks with HSBC, Barclays and Lloyds acting as the main drags on the U.K. benchmark," CMC Markets analyst Michael Hewson said in a note. Marks & Spencer, Barclays and WPP were the session's biggest fallers, down 5.2%, 4.6% and 4% respectively. On the up side, Whitbread was the day's biggest riser, up 2.3%, followed by Rentokil Initial, rising 1.5%, and Diageo, up 1%.

COMPANIES NEWS:

Marks & Spencer Expects to Meet Market Views After Strong Christmas Performance

Marks & Spencer said it expects its full fiscal-year results to meet market views after a strong performance over the key Christmas period.

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Tesco Lifts Guidance After Strong Christmas Period

Tesco upgraded its fiscal 2024 guidance for the second time after it saw stronger-than-expected volume growth in the U.K. market during Christmas.

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Taylor Wimpey 2023 Profit Seen at High End of Guidance Though Orders Slipped

Taylor Wimpey said its performance met its expectations, seeing operating profit at the high end of its previous guidance range, though its order book fell.

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Whitbread Backs Guidance After Hotel Demand Drives 3Q Growth

Whitbread backed its guidance for fiscal 2024 as it posted an increase in total sales in the third quarter, driven by high levels of occupancy and strong pricing for its hotels in the U.K.

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U.K. Competition Regulator Orders Pause on Pennon's Sutton Water Integration Buy

The U.K. Competition and Markets Authority said it has issued an enforcement order on the takeover by Pennon of Sumisho Osaka Gas Water UK, preventing them from fully integrating while it completes an investigation into the deal.

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Informa Raises Guidance Again After Strong Performance, Sets Year-Ahead Targets

Informa PLC raised its 2023 revenue guidance again after a strong performance over the year with underlying revenue growth of 30%, while targeting high single digit for the year ahead.

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LXI REIT Agrees to LondonMetric Property Takeover for Around GBP1.9 Bln

LXI REIT and LondonMetric Property said they have agreed to a merger, with LondonMetric buying LXI in shares, valuing the latter at around 1.9 billion pounds ($2.42 billion).

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Trustpilot Sees 2023 Adjusted Ebitda Ahead of Views; Starts GBP20 Mln Buyback

Trustpilot expects its core earnings for 2023 to beat market views given its double-digit growth in revenue for the year and launched a 20 million pound ($25.5 million) share buyback.

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Hilton Food Sees 2023 In Line With Views After December Sales Volume Grew

Hilton Food Group said its 2023 performance was in line with expectations following robust Christmas trading.

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Robert Walters Backs Pretax Profit Guidance Despite Fee Income Fall

Robert Walters reported a 13% fall in net fee income for the fourth quarter of 2023 but backed its full-year pretax profit guidance.

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Darktrace Raises Revenue, Margin Outlook

Darktrace raised the guidance for revenue and its earnings margin after booking significant growth in the first half.

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Big Yellow Group's Revenue Rose Despite a Fall in Store Occupancy

Big Yellow Group said its revenue rose in the third quarter compared with a year ago despite decreasing occupancy across all stores.

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Savills Expects to Meet Profit Views Despite Market Uncertainty

Savills said it expects to meet profit expectations, as strength across its less transactional service lines offset challenges from increased interest rates, geopolitical events and uncertainties over asset values.

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Grafton Group to Beat Market Forecasts Despite Subdued Trading Environment

Grafton Group said that it expects to slightly beat adjusted operating profit market forecasts for 2023 despite a subdued trading environment over the final months of the year.

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Windward Shares Rise on Market Beat Forecast

Windward shares rose as much as 21% after the company said that it expects to beat market forecasts for 2023 after a strong finish to the year.

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Nisbets in Talks With Bunzl Over Potential Sale, Sky News Reports

--Nisbets is in talks with Bunzl regarding a deal which could value the company at between 450 million pounds to 500 million pounds ($573.4 million to $637.1 million), Sky News reports.

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Mears Group Shares Rise After Strong Year, Market Forecasts Beat Expectation

Mears Group shares rose as much as 11% after the company said that it expects to beat 2023 market forecasts for revenue and adjusted pretax profit after a strong performance over the year, which is expected to continue in 2024.

MARKET TALK:

Ferrexpo's Lack of Export Options Hurt Its Output

1350 GMT - Ferrexpo's 4Q output was hit by low European demand and a lack of export options but the iron-ore pellet exporter could see demand and prices improve, as well as potentially more export routes, Liberum analysts write in a research note. The miner operating in Ukraine was expected by Liberum to post flat on-quarter production but instead saw output fall 50% on weak European demand and the lack of cost-effective export routes, which meant production had to be dialed back to avoid inventory build-up, analysts say. However, while demand and prices look better in the new year, shipping to customers in MENA and Asia could soon become a reality as "Russia's navy [is] pushed out to the eastern part of the Black Sea," they say. Shares are down 5.5% at 77.00 pence. ([e-mail])

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Chinese Demand for Luxury Goods Could Start to Improve

1346 GMT - Luxury sector could see a recovery in sales to Chinese buyers, after recent limited demand due to economic woes and pandemic restrictions, Goldman Sachs analysts write in a note to clients. Chinese customers account for a large amount of the industry's sales with the majority of spending being outside territory. "Post the reopening of China, the recovery of spending in Europe has been relatively muted, with volumes constrained by flight availability and price," the analysts say. "We see Chinese travel-related spending globally recovering to 2019 levels by 2025, and spending in Europe recovering to pre-pandemic levels during 2026," the analysts say. Burberry, LVMH and Brunello Cucinelli, are Goldman Sachs's key picks, while Salvatore Ferragamo is its least preferred name. ([e-mail])

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European Stocks Rise Ahead of U.S. Inflation Data

1240 GMT - European stocks mostly rise ahead of an expected slightly higher Wall Street open as traders eye U.S. inflation data later. The Stoxx Europe 600, DAX and CAC 40 gain 0.2%, though the FTSE 100 drops 0.1%. Oil shares trade mixed as Brent crude rises 1.9% to $78.29 a barrel. IG futures data shows the Dow opening at 37715, versus Wednesday's close of 37695. Mainland China, Hong Kong and Japan markets rose more than 1%. "It was a solid session across most of Asia as investors threw caution to the wind ahead of today's widely-anticipated U.S. CPI data," IG analysts write. "Today's report will provide further indications as to whether inflation is still dropping towards the Fed's 2% target." ([e-mail])

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Informa's TechTarget Deal Only Expected to Be Mildly Accretive

1232 GMT - Informa's proposed agreement to merge its tech digital businesses with TechTarget should be mildly accretive to share values, but isn't likely to particularly push the needle, UBS says. The events and business-intelligence company's plan is only expected to be earnings accretive after 2025, and UBS analysis suggests the deal would only add $150 million or 9 pence per share to Informa's value--or 1% of the current share price, analysts say in a research note. Between the deal values and the broadly in-line new operating guidance given separately by Informa, investors are unlikely to be swayed either way, the Swiss bank says. UBS keeps its 785 pence price target. Shares are down 2.7% at 764.0 pence. ([e-mail])

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WPP Double-Downgraded by UBS Over Growth, Free Cash Flow Concerns

1227 GMT - WPP is double-downgraded by UBS over concerns organic growth will miss both market expectations and the wider sector's performance for the year and the medium term, and that free cash flow will remain at depressed levels in 2024, analysts say. The advertising giant's likely depressed cash flow will limit the size of any share buyback program, and a large shareholder giveaway is only likely if it makes asset disposals, UBS analysts say in a research note. In this regard, the recent news that WPP is weighing a disposal of its stake in Kantar Media is helpful, but timing remains uncertain, the Swiss bank says. UBS cuts its recommendation to sell from buy and its price target to 700 pence from 1,200 pence. Shares are down 3.2% at 735.2 pence. ([e-mail])

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U.K. Domestic Investors to Absorb Heavy Gilt Supply in 2024

1214 GMT - The gilt market is counting on domestic investors to buy most of the gilts due to be supplied in 2024, Bank of America rates strategist Agne Stengeryte, says in a note. Local non-bank investors were the biggest gilt buyers in 2023, buying over GBP107.5 billion between January and November while banks came second, investing over GBP28.3 billion, according to the Bank of England, BofA says. If the trend continues, 2023 will be the first year since 2016 in which domestic banks will be net buyers of gilts and the first year since 2015 that local banks and non-bank investors are the biggest gilt buyers, Stengeryte says. ([e-mail])

Contact: London NewsPlus, Dow Jones Newswires;

(END) Dow Jones Newswires

01-11-24 1245ET