Tuesday, November 6: The FTSE 100 was led lower by grocer Morrisons after it failed to make consensus numbers, alongside telecom names BT Group & Vodafone; despite bid rumours for the former, while miners also weighed. The primary index came under pressure, notwithstanding a sterling slide due to the announcement that Theresa May was no closer to a Brexit deal, despite recent reports to the contrary. Asian trade rebounded after a Monday spent in the red, whilst the S&P opened in the green due to strong earnings and heavy buying of tech stocks ahead of U.S. midterm elections, though liquidity was thin.
Morrisons slipped(-4.13%) as it failed to beat tough consensus numbers after a buoyant World Cup and Summer trading period set the bar high. Q3 numbers were indicative of slower quarter-on-quarter LFL sales growth of 1.3% in the core supermarket business, behind analyst growth expectations. Overall LFL sales ex. fuel rose 5.6%, 4.3% of which was driven by a strong wholesale performance, though the market expected a top line figure of 6.1%. Despite these misses, the supermarket registered its twelfth consecutive quarter of sales growth and also announced the completion of its store refurbishment programme for financial year 2019, with 60 stores now improved.
DS Smith(+1.27%) was one of few business in the FTSE 100 marginally in the green as it reassured the market on corrugated customer demand slowdown concerns in its pre-close trading update. The packaging and paper producer reported that the business had exceeded expectations in the first half of fiscal 2019, noting also that its proposed acquisition of Spain’s Papeles y Cartones de Europa is proceeding as anticipated. Returns on sales and adjusted operating profit are expected to come in ahead of the prior year’s performance, with volume growth at its FMCG focused business and cost pass through earmarked to drive gains.
PepsiCo looks set to add another snack brand to its repertoire with the acquisition of Lincolnshire based Piper Crisps. Subject to approval from the Competition and Markets Authority, Piper Crisps will become a stablemate of Walkers and the American brand Doritos. In 2017 the business was named as one of the 50 fastest-growing food and drink businesses in the UK in The Grocer’s annual Fast 50 list, and it now exports to 37 countries across the globe.
At the close European equities were lower with the FTSE 100 -0.89%, the CAC 40 -0.41% and the DAX 30 -0.06%.