Thursday, 1 November: After a relatively strong close to a very tough month for global markets momentum quickly disappeared as we began November. After Wall Street managed to continue the Halloween rally, the NASDAQ most impressive with a 2% jump, Asian shares endured a typically mixed session. Beginning the new month usually spurs investors to have a quick glance at the major events upcoming – given we have the Bank of England’s rate decision and US payrolls before the weekend, momentum likely dwindled as investors checked their positions after a turbulent month, evaluating whether the slight rebound at the end of the month was the beginning of a slow retracement or a break before another drop.
The Nikkei closed over 1% lower today, enduring opposite fortunes to Chinese markets which were spurred on by further bets of stimulus. European markets opened with modest gains, the FTSE 100 was the main laggard due to the jump in the value of the pound. The move was caused by renewed optimism of a Brexit deal getting over the line this month and rumours that the UK has struck a deal with the EU on post-Brexit financial services. Reports suggest London has agreed with Brussels to give the UK’s financial services firms continued access to the bloc, although some suggest this statement could be somewhat stretched in terms of reality.
In all honesty there was little change for the FTSE 100, following the boost to sterling from the BoE’s rate decision to hold interest rates, at a vote of 9-0. Making life hard on the main index given the strength of sterling was not felt on the FTSE 250, which flew up 1.3% on the day. Among some of the best performing stocks were Spire Healthcare, Just Group and Thomas Cook, all with double digit gains. Other notable shares on the rise included Ted Baker, TalkTalk and Crest Nicholson.
BT Group rose to the top of the FTSE this morning after results showed strong growth during the first half, prompting them to raise guidance to the upper half of its range. Shares closed 8.5% higher on the day.
Royal Dutch Shell’s net profit jumped 50% during the third quarter as renewed strength in the oil price (currently around the $74.50 p/bbl mark), helped performance. Despite this shares closed -3.5%.
BHP Billiton today announced that $10.4bn would be returned to shareholders via a share buyback, as the miner continues to face pressure from their activist investor Elliott Management. Shares finished +3%.
Carpetright has begun to see underlying rewards from their business restructuring. Today they announced performance remained negative during the second quarter on a like for like basis but slow signs of progress have emerged. Shares dropped 2%, over the past 12 months shares are 90% lower.