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FTSE 100 down 0.9%, Glencore down 3% after update
Sellers dominated the London market, with the FTSE 100 index down 0.9% or 64.54 points to 7,009.15 and the FTSE 250 index down 1.2% or 225.59 points to 17,856.33.
Confidence has been shaken by poor earnings figures from Amazon, while investors are also positioning for next week’s interest rate decisions in the UK and US.
Big decliners in the retail sector include JD Sports Fashion, which generates a large portion of its revenue in the US. Its shares were 3% lower, down 2.7p. at 98.8 p.
Mining stocks came under pressure after Glencore lowered its annual production guidance for some commodities. Its shares fell 3% or 15.4p to 485.6p and Rio Tinto lost 145p to 4519p.
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Lucky Voice plans karaoke expansion
The owners of Lucky Voice karaoke bars have unveiled plans for a major expansion and investment program after punters returned to their venues much faster than expected following the pandemic.
The company, which has London venues in Soho, Islington and Holborn frequented by celebrities including Harry Styles, Paul McCartney and Gwyneth Paltrow, said trading surpassed 2019 levels “within weeks” of reopening in May ‘last year. Between March and May of this year, revenue increased by 54% compared to the same period in 2019.
Under the new plan, the company aims to have 10 sites by the end of 2024 “including a significantly expanded presence in London”. It has also earmarked £500,000 for upgrading its existing venues following a £300,000 refurbishment of the original Lucky Voice on Soho’s Poland Street.
Managing director Charlie Elek said: “We’ve been delivering phenomenal nights since 2005, and we’re sounding better than ever in 2022. The revamp of our Soho venue is part of a wider strategy for the business as we look to grow and invest in our venues to ensure we deliver the most amazing experience, both for our guests and 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 favorite night out.”
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NatWest bullish but shares fall
NatWest boss Alison Rose said today that the major lender continued to deliver strong financial performance after third-quarter profits improved from a year earlier to £1.1bn.
The impact of the increases in basic rates has made the bank’s net interest margin of 2.99% 27 basis points higher than in the second quarter of the year.
NatWest has taken a £242m bad debt charge in relation to its core business, which it said reflected scenario planning rather than the performance of the underlying book where conditions remain benign.
Chief executive Alison Rose said: “The bank’s strong capital and liquidity enables us to help those who are likely to need it most.”
However, shares fell 6% as rising inflationary pressures mean the bank no longer expects costs in 2023 to be broadly stable.
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Elon Musk fires Parag Agrawal as he completes takeover of Twitter
Elon Musk is now at the helm of Twitter and has fired his top three executives.
Sources on Thursday night (early Friday morning in the UK) did not say whether all the paperwork for the deal, initially valued at $44bn (£38bn), had been signed or if it had been closed.
However, they said the South African-born businessman was at the helm of the company and had ousted chief executive officer 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 released.”
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Profits top £1bn for British Airways owner IAG
Profits at British Airways owner IAG topped €1.2bn (£1bn) in the three months to September amid a return to overseas travel over the summer.
The company’s revenue came in at €7.3 billion, around 1% higher than pre-pandemic levels despite continued travel restrictions to Asia and disruptions at Heathrow airport.
Luis Gallego, chief executive of IAG, said: “All our airlines were significantly profitable and we continue to see strong passenger demand, while capacity and load factors recover.
“Demand for leisure is particularly healthy and leisure revenues have recovered to pre-pandemic levels. Business travel continues to recover steadily.”
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The FTSE 100 is about to lose ground, the Nasdaq points lower
The FTSE 100 index is expected to retreat today, after hitting its highest level in more than a month last night on stronger energy stocks.
Disappointment over tech sector earnings and uncertainty ahead of next week’s interest rate decisions on both sides of the Atlantic mean CMC Markets expects the FTSE 100 to open 47 points lower at 7026.
Futures markets are also pointing to a drop of more than 1% for the tech-led Nasdaq when trading on Wall Street resumes later.
Elsewhere, Brent crude was down 1% at $95.97 a barrel and the pound was modestly lower at $1.153.
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Amazon Fuels Tech Sector Concerns, Shares Fall 20%
Amazon became the latest of Wall Street’s tech giants to disappoint last night after the e-commerce giant warned of lower-than-expected profits due to rising labor and delivery costs.
The firm also forecast fourth-quarter net sales of $140 billion to $148 billion, well below analysts’ expectations of $155 billion, according to Refinitiv data.
Third-quarter net sales of $127 billion were also slightly below market consensus. Shares fell as much as 20% in after-hours trading.
Apple, meanwhile, posted quarterly numbers in line with expectations, despite iPhone revenue falling short of Wall Street projections. Shares were mostly flat, after falling 3% in regular trading on Thursday.
Tech sector valuations fell this week after five of the largest companies accounted for 20% of the S&P 500’s performance. Shares of Microsoft and Google owner Alphabet also fell sharply after Tuesday’s updates.
Oanda analyst Edward Moya said last night: “A lot has gone wrong with big tech today; Apple’s holiday outlook was underwhelming, inflation pain is more noticeable and the unfavorable exchange rates will hurt future sales.”