- FTSE 100 little changed at the open, dwon 3 points
- Retail sales growth slowed in September - BDO
- Marshalls tumbles after profits warning, Superdry up after return to profit
8.13am: FTSE 100 little changed at the open
FTSE 100 little changed in early trading with investors nervously awaiting US non-farm payrolls figures due later today.
Economic news failed to lift spirits with BDO reporting slowing growth in retail sales in September and the Halifax house price survey showing a fall in prices in September too, pointing to a colling in the housing market.
By 8.10am the FTSE 100 was down 3 points at 6,994 although the FTSE 250 slipped 71 points to 17,562.
Sterling was also little moved in early trading, down 0.05% against the US dollar at US$1.119.
Marshalls PLC (LON:MSLH) tumbled 22% after it warned that full-year profits will be slightly below market forecasts following a drop in demand for landscaping products from struggling households hit by soaring energy prices and inflation.
In a trading statement, Marshalls said it “now anticipates that the outturn for the group as a whole will be slightly below the bottom end of the current range of market expectations” of profits of £95.1mln-£101.0mln.
Peel Hunt slashed its price target to 470p from 830p but kept its buy rating.
On a brighter note, Superdry PLC (LSE:SDRY) saw its shares bounce nearly 10% to 112p after reporting a return to profit in the year to April 30 although it remained cautious in the near term citing economic factors including high inflation and the impact of these on consumer spending.
Superdry made an adjusted profit before tax of £21.9mln compared to a loss of £12.6mln in the previous year, revenues rose 9.6% to £609.6mln.
The retailer said it had made an encouraging start to this financial year but forecast profit would fall to between £10mln and £20mln pounds, as cost inflation puts pressure on margins.
Broker Liberum said it would leave its forecasts unchanged and reiterated a buy rating.
With a price target of 500p the broker said “The shares remain too cheap.”
“Superdry’s return to profit in full year 2022, despite COVID’s impact, marks an inflexion point that gives confidence in its positive long-term trajectory” Liberum said.
7.48am: House prices fall in September - Halifax
The UK housing market is slowing, according to the latest house price data from Halifax today, with average house prices down 0.1% in September, leaving the average property now costing £293,835.
The annual house price inflation rate slowed for the third month in a row, to 9.9% from 11.4%, the lowest rate since January.
UK House Price Index UK (Halifax) announcement - Actual: -0.1%, Expected: pic.twitter.com/ucngddKtxD— Spreadex Trading (@Spreadexfins) October 7, 2022
Kim Kinnaird, director at Halifax Mortgages, commented that house prices have been largely flat since June, as the markets entered “a more sustained period of slower growth.”
Kinnaird warned that house prices will come under heavier downward pressure in the months ahead, from rising borrowing costs and the cost of living crisis:
“While stamp duty cuts, the short supply of homes for sale and a strong labour market all support house prices, the prospect of interest rates continuing to rise sharply amid the cost of living squeeze, plus the impact in recent weeks of higher mortgage borrowing costs on affordability, are likely to exert more significant downward pressure on house prices in the months ahead” Kinnaird.
7.28am: Royal Mail provided emergency liquidity to pension fund - Telegraph
Royal Mail rushed forward the monthly payment into its pension scheme to help prevent a cash crunch, according to a report in The Telegraph, after the mini-budget sent crucial money markets into a tailspin.
The company responded to a request from the trustees of the Royal Mail Pension Plan to provide emergency liquidity, amid fears across the City that a run on pension funds driven by products known as Liability-Driven Investments (LDIs) would leave major funds insolvent.
The Royal Mail scheme has 124,000 members and liabilities of £11bn.
7.25am: Retail sales growth dipped in September - BDO
Retail sales grew at their slowest pace in September since shops reopened after COVID due to a combination of inflation, cost of living pressures and an unexpected bank holiday.
Figures from the BDO’s High Street Sales Tracker showed in-store and online sales increased by just 2.8% in September on last year.
It comes after a similar poor set of results in August, which was the previous lowest post-COVID performance for retail sales.
The month began with sales up 3.9% and peaked in the second week at 4.9%, before falling to 2.8% and 1.3% in the third and fourth weeks respectively, the report said.
The fourth week saw a bank holiday to mark the Queen's funeral.
Fashion sales were up just 6.7% on last September, when retailers would normally expect shoppers to be spending on their autumn and winter wardrobes.
Lifestyle sales were up a meagre 1.2%, but homewares sales fell by 6.3%.
Sophie Michael, head of retail and wholesale at BDO, said: "While the overall like-for-like is not quite going backwards across all discretionary spending categories, it's clear that it's trending downwards.
"The one bright spot is that with the pound's weakness, the UK becomes an attractive destination for overseas tourists doing their Christmas shopping.”
“However, this is unlikely to provide much of a boost to retailers beyond flagship stores in major cities.”
7.00am: FTSE 100 expected to open lower
FTSE 100 is expected to make a weak start on Friday with investors nervously awaiting the US non-farm payrolls numbers due later today.
Spread betting companies are calling the lead index down by around 14 points.
In Asian trading sterling was quoted at $1.1168, lower than $1.1191 at the London equities close yesterday.
In the US markets closed lower on Thursday with investors nervously awaiting today's non-farm payrolls numbers to see if the Fed’s aggressive interest rate moves are finally denting the jobs market.
By the close the Dow Jones Industrial Average was down 347 points, or 1.15%, to 29,926.47, the S&P 500 fell 39 points, or 1.03%, to 3,744.40, and the Nasdaq Composite slipped 75 points to 11,073.