Tuesday, 7th November: Tuesday’s trading session saw the FTSE slip 0.65% lower from its record close yesterday. European bourses struggled to follow a strong US session on Monday that saw the S&P 500, NASDAQ and Dow all post record intraday highs; this managed to filter into Asian bourses that generally closed higher this morning, the Nikkei amongst those rallied 1.73%. On a day of few winners, BP and Royal Dutch Shell couldn’t help sway the FTSE, both firms helped by oil’s continued resurgence in the midst of the Saudi corruption crackdown. SSE shares topped the index, climbing 2.6% following the announcement that they were in talks with Innogy about combining businesses.
The release of Associated British Foods full year results today drove their shares to the bottom of the FTSE bar G4S. Despite a generally positive set of numbers that saw operating profit climb 13% and a recovery in its sugar business, it was the first allusion to pressures in an ambitious US growth plan, and shares closed 3.74%. Formerly mentioned G4S’ shares tumbled 4.69% today after reporting a slowdown in revenue and earmarking full year revenue growth for 3-4%, slightly below consensus.
The other main headline today came from the British Retail Consortium (BRC), which showed the slowest pace of growth or non-food items since records began back in 2011. In the year to October non-food sales increased by 0.2% and they identified clothing sales as particularly hard hit. If you include food, total retail sales were up 0.2% last month vs 2.4% last year and on a LFL basis they were down 1%. It is yet more evidence of the challenges facing British retailers as consumer pockets feel the pinch. Clothing retailers especially continue to struggle due to the structural change to online shopping on top of the fact consumer spending is slowing. This has been evident in many retailers’ latest updates, with online growth doing its best to offset a noticeable slowdown in sales in their physical stores.