Wednesday, 12 June: Markets very much emulated the weather today, with the majority of major global bourses enduring a miserable day’s trade, losing ground and finishing with an equally bleak outlook for tomorrow. At the open the FTSE was held lower, not helped from a steadier pound from Tuesday’s better than expected data releases. This move has been trademarked lately with a dip in the pound usually boosting equities and vice versa.
Some of the major shares in focus earlier were British American Tobacco, who saw their shares slump to the foot of the index despite an upbeat update and outlook following the release of their first-half results. They retained the bottom spot through the session before closing 4.4% lower. The tobacco giant commented that they had begun fiscal 2019 well and that they’re on track to deliver full-year guidance.
Online fashion retailer Boohoo also released a brief Q1 update today, which showed unrelenting high growth for the fashion retailer that continues to buck the trend. Shares initially headed lower, possibly investors booking profits but eventually closed a little over 1% higher on the day. Boohoo’s revenue in the first quarter climbed a staggering 39%, with all brands displaying growth. International growth was 56% and they ended the period sat on almost £200m of cash. If shares were only as cheap as their products there wouldn’t be an investor without them.
The FTSE was also held lower by declining oil prices. The price of Brent crude has dropped below $61 p/bbl and tends to weigh heavy on the FTSE given the weightings of major oil constituents on the index.
Elsewhere De La Rue announced they had reached a deal to sell their International Identity Solutions business for £42m in a cash transaction to a subsidiary of Assa Abloy AB. Reckitt Benckiser was the highest climber on the FTSE 100 after announcing their new CEO Laxman Narasimhan, who will take charge from the beginning of September. Shares closed over 4% higher. Pendragon, the car retailer, saw shares plummet 21% today after issuing a profit warning amid the challenging auto market. They have conducted an operational review of the business and unsurprisingly don’t have a positive outlook for the near term.
Later on in the day, the pound was rocked from a vote to block a no-deal Brexit. Not that is material progress. Moving on. Creditors also approved Arcadia’s CVAs, meaning the various brands are closer to a future albeit with a long uphill battle to overcome. As we write US markets have begun on a similarly negative footing and the pound sits down a quarter percent versus the dollar.