FTSE 100 down 0.9%, Glencore falls 3% after update
Sellers are in control of the London market, with the FTSE 100 index down 0.9% or 64.54 points to 7009.15 and the FTSE 250 index off 1.2% or 225.59 points to 17,856.33.
Confidence has been shaken by Amazon’s poor earnings figures, while investors are also positioning for next week’s interest rate decisions in the UK and United States.
Big retail sector fallers include JD Sports Fashion, which generates a big chunk of its revenues in the US. Its shares were 3% lower, off 2.7p to 98.8p.
Mining stocks added to the pressure after Glencore downgraded its annual production guidance for some commodities. Its shares dropped 3% or 15.4p to 485.6p and Rio Tinto lost 145p to 4519p.
Lucky Voice plans karaoke expansion
The owners of the Lucky Voice karaoke bars have unveiled plans for a huge expansion and investment programme after punters flooded back to their venues far more quickly than expected after the pandemic.
The company, which has London venues in Soho, Islington and Holborn attended by celebrities including Harry Styles, Paul McCartney and Gwyneth Paltrow, said trade surpassed 2019 levels “within weeks” of reopening in May last year. Between March and May this year revenues were 54% up on the same period in 2019.
Under the new plan the business aims to have 10 venues by the end of 2024 “including a significantly expanded presence in London.” It has also earmarked £500,000 for upgrading its exisiting sites following a £300,000 refurbishment of the original Lucky Voice on Poland street in Soho..
Managing director Charlie Elek, said: “We’ve been delivering phenomenal nights out since 2005, and we’re sounding better than ever in 2022. The refurbishment of our Soho site forms part of a wider strategy for the business, as we seek to grow and invest in our venues to ensure we provide the most amazing experience, both for guests and for our teams. Our mission is to combine karaoke with great service, technology and food and drink, and we’re constantly thinking about how to give people their favourite night out.”
NatWest upbeat but shares fall
NatWest boss Alison Rose today said the high street lender continued to deliver a strong financial performance after third quarter profits improved on a year earlier to £1.1 billion
The impact of base rate rises meant the bank’s net interest margin of 2.99% was 27 basis points higher than the second quarter of the year.
NatWest has taken a bad debts charge of £242 million in relation to its core business, which it said reflected scenario planning rather than the underlying book performance where conditions continue to be benign.
Chief executive Alison Rose said: “The bank’s strong capital and liquidity mean we are able to help those who are likely to need it the most.”
Shares fell 6%, however, as increased inflationary pressures mean the bank no longer expects costs in 2023 to be broadly stable.
Elon Musk fires Parag Agrawal as he completes Twitter takeover
Elon Musk is now in charge of Twitter and has ousted its top three executives.
Sources on Thursday night (early Friday morning UK) would not say if all the paperwork for the deal, originally valued at $44 billion (£38 billion), had been signed or if it had been closed.
However they said the South Africa-born entrepreneur was in charge of the firm and had dismissed chief executive Parag Agrawal, chief financial officer Ned Segal and general counsel Vijaya Gadde.
The billionaire appeared to confirm media reports of his takeover, tweeting shortly before 5am (UK time) on Friday: “the bird is freed”.
Profits top £1 billion at British Airways owner IAG
Profits at British Airways owner IAG topped 1.2 billion euros (£1 billion) in the three months to September amid a return to overseas travel over the summer.
Revenues at the firm stood at 7.3 billion euros, around 1% higher than pre-pandemic levels despite continued travel restrictions in Asia and disruption at Heathrow airport.
Luis Gallego, IAG Chief Executive Officer, said: “All our airlines were significantly profitable and we are continuing to see strong passenger demand, while capacity and load factors recover.
“Leisure demand is particularly healthy and leisure revenue has recovered to pre-pandemic levels. Business travel continues to recover steadily.”
FTSE 100 set to lose ground, Nasdaq points lower
The FTSE 100 index is expected to fall back today, having hit its highest level in over a month last night due to stronger energy stocks.
Disappointment over tech sector earnings and uncertainty ahead of next week’s interest rate decisions on both sides of the Atlantic means CMC Markets expects the FTSE 100 to open 47 points lower at 7026.
Futures markets are also pointing to a further 1% decline for the tech-led Nasdaq when trading resumes on Wall Street later.
Elsewhere, Brent crude was 1% lower at $95.97 a barrel and the pound was moderately lower at $1.153.
Amazon fuels tech sector worries, shares down 20%
Amazon last night became the latest of Wall Street’s Big Tech companies to disappoint after the e-commerce giant warned of lower-than-expected profits due to increased labour and delivery expenses.
The firm also forecast fourth-quarter net sales of between $140 billion and $148 billion, significantly below analyst expectations of $155 billion according to Refinitiv data.
Net sales for the third quarter of $127 billion also came in slightly lower than the market consensus. Shares tumbled as much as 20% in after-hours trading.
Apple, meanwhile, posted quarterly numbers in line with expectations, despite iPhone revenues being short of Wall Street projections. Shares were broadly unchanged, having fallen 3% during regular trading on Thursday.
Valuations across the tech sector have slumped this week after five of the biggest companies accounting for 20% of the S&P 500 reported results. Shares in Microsoft and Google owner Alphabet also fell sharply following their updates on Tuesday.
Oanda analyst Edward Moya said last night: “A lot went wrong for big tech today; Apple’s holiday outlook underwhelmed, inflation pain is more noticeable, and unfavourable exchange rates will hurt future sales.”
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