Wednesday, 02 October: US factory data was released yesterday, throwing the cat amongst the pigeons for equity investors. The data showed that factory activity slumped to a 10-year low during September and subsequently sparked global growth concerns. Wall St. incurred fairly chunky losses yesterday and shortly after the European opening bells, markets closer to home were following suit. Throughout the day without any real drivers spurring a change in fortune the FTSE 100 slowly fell further before being saved at 3.23% by the bell. As we write Wall St. has continued to fall and it is again safe havens among very few asset classes that have moved higher. Although you could share the view of Donald Trump, who explains the fall in global shares is due to the impeachment ‘nonsense’ and that the Democrats only have the 2020 election in mind which we’re sure hasn’t even crossed his mind.
The FTSE 100 has fallen to its lowest level since March today and sits at 7,122. Therefore, it comes as no surprise to hear only 2 shares managed to avoid losses today, these were Tesco and flutter Entertainment, the owner of Paddy Power Betfair.
Tesco shares climbed on the back of the shock news that their current CEO will depart next year. Dave Lewis, who has been at the helm of the UK’s biggest supermarket since 2011 has announced it is time for him to move on. He is credited with the turnaround of Tesco which was left in disarray after a few disasters including their huge accounting scandal. Since then he has delivered an outstanding shift in fortunes for the firm and they’ve achieved everything they set out to do at the beginning of the plan. The surprise had investors spooked and shares initially dipped but quickly recovered as their first half results showed profit climbed 6.7%, beating expectations and demonstrating again just how far the business has come.
Flutter Entertainment was easily the winner on the day as they closed 6.9% higher, after hitting session highs of +14%. The jump was sparked by news that they had agreed to acquire Canadian online gaming company Stars Group Inc. The move is expected to yield the desired benefits well down the line with brokers estimating at least 18-months if the move is approved by regulators. The deal will also create a company worth over $11bn.
Metro Bank enjoyed one of their rare good days on the markets, of course usually following further losses but the bounce came after the founder, Vernon Hill, announced he would step down by the end of this year.