Tuesday, January 15: It was, as expected, a volatile day for London shares. Ahead of the key Brexit vote that will take place after the close of play today, investors have been doing some last-minute positioning for what they believe will be the eventual outcome. The problem is the continual swings in momentum and never tiring flow fresh hearsay and opinions that continually sways popular opinion. As we stand many expect May to lose the vote, which regenerates more uncertainty with confirmation. The FTSE 100 this morning began with decent gains, climbing around 0.4% before retreating to even ground throughout the core of the session. We then witnessed a last-minute momentum surge to help the FTSE close 0.6% higher ahead of the vote expected to take place at 7pm tonight.
Elsewhere, global bourses have enjoyed a positive day’s trade on the whole. Asian shares set the tone with strong gains this morning, the Hang Seng rebounding from yesterday’s loss to climb 1.8% today, making it 7 positive sessions in 8. European bourses held up in the face of the Brexit cloud looming and more data showing evidence of a sharp slowdown for the German economy, the Dax eventually closed 0.3% higher on the day.
In terms of currency, the pound has unsurprisingly failed to avoid the worst-case ramifications of the numerous possible Brexit scenarios and sits 0.85% lower against the dollar at $1.2763, whilst currently down 0.2% against the euro at €1.1205.
In share specific news, Boohoo released their latest trading update today. Boohoo beat expectations over the festive period, with a 44% rise in sales during the 4 months to December 31st. The gross margin was also lifted 170bps. They have invested in delivery and marketing, offsetting the margin benefits. Shares fell over 9% on the day after investors concentrated on their adjusted profit-margin target being narrowed – from 9%-10% to 9.25%-9.75%. Some may feel a little harsh, given the relative performance to the wider sector, and even to online peers such as ASOS and Quiz.
Provident Financial were the standout shares for the wrong reasons on Tuesday, as they fell 19.5% after estimating profit for the fiscal year will be at the lower end of guidance.
Home builder Persimmon issued a bump to guidance, which was met with mixed emotions from investors. Shares fell 1.2% on the day, with its peers all seeing losses on the FTSE for today’s session. This is presumably down to the fact the sector is at the hands of Brexit in the short term. Then again… ‘’he who dares…’’
As part of their transformation plan, M&S released the next wave of store locations it intends to close. 17 in total, as part of their 5-year plan to close over 100 stores by 2022. This earmarks roughly half of the planned closures thus far.