FTSE 100 Live Tuesday
- Bunzl backs US revival
- Retail stocks downgraded
- Wood suitor cuts bid price
Market update: FTSE 100 falls back, retail caution hits Kingfisher
09:58 , Graeme EvansDowngraded Kingfisher and Primark owner Associated British Foods today fell 4% during a lacklustre session for the FTSE 100 index following Friday's record high.
A weaker performance on Wall Street on Monday meant London’s top flight resumed after the long weekend with a decline of 0.6% or 59.02 points to 9262.38.
B&Q owner Kingfisher fell 11.8p to 269.4p and AB Foods reversed 96p to 2218p after Deutsche Bank named the pair among its least preferred of UK retail.
The bank said: “We are taking a more cautious view on the UK consumer. The end of 2024 and early 2025 are likely to have been the sweet spot, with real wage growth set to slow and fear of unemployment set to build from here.”
Deutsche Bank’s most preferred are Tesco and Marks & Spencer, although the latter slipped 0.8p to 357.6p as today’s note included a 15p lower price target at 435p.
The FTSE 250 picks are B&M European Value Retail and Dunelm, but Wickes was downgraded to Sell based on the bank’s concerns over exposure to domestic cyclical sectors such as DIY.
Wickes slumped 8% or 18.5p to 202p, while the UK-focused FTSE 250 index gave up a large chunk of Friday’s outperformance by falling 0.8% or 180.62 points to 21,896.61.
One of the best performing stocks in the mid-cap index was Burberry, which boosted its chances of promotion in the forthcoming FTSE 100 reshuffle by rising 2% or 25p to 1248p.
A quiet session for results was dominated by Bunzl, which rose 5% or 132p to 2516p after its figures reassured investors in the wake of April’s profit warning.
The group, which provides essential not-for-sale products and services, said actions taken in its largest business in North America have produced “early positive indicators of success”.
Adjusted profits fell 15.4% to £345.6 million in the first six months of the year, with North America operating profit down 14.7% to £197 million on a weaker margin of 6.4%.
Shares rose as Bunzl reiterated its guidance and resumed the £200 million buyback programme it paused in April. It also announced the acquisition of businesses in Mexico and Spain.
Other risers in the FTSE 100 included Rolls-Royce, which lifted 13p to 1056p, and Shell after an advance of 24p to 2716p.
Wood Group suitor cuts takeover price
08:49 , Graeme EvansWood Group, the Aberdeen-based engineering and energy services firm, today said it was minded to accept a reduced takeover bid from Dubai-based suitor Sidara.
The privately held network of engineering and design companies run from the United Arab Emirates had previously made an approach worth 35p a share in mid-April, valuing Wood Group at £242.2 million.
The proposal is now worth £207.6 million after Sidara said at the weekend that it was “committed to making an offer” but at the lower price of 30p a share.
The deadline for Sidara to make a firm offer or walk away has now been extended to 5pm on Thursday.
Wood Group shares are currently suspended, having plunged by more than 70% amid a torrid time for the firm.
Consumer warning hits retail stocks, FTSE 100 lower
08:20 , Graeme EvansA City bank’s warning over the diminished spending power of UK consumers today triggered a slide for retail stocks including Primark owner Associated British Foods.
Deutsche Bank cut AB Foods and Wickes to Sell recommendations and lowered B&Q owner Kingfisher to Hold. It also reduced its price target on Marks & Spencer.
The bank said: “The end of 2024 and early 2025 are likely to have been the sweet spot, with real wage growth set to slow and fear of unemployment set to build from here.”
Unless consumers reduce savings, the bank estimates there will be a four percentage point slowdown in discretionary spending power to 3% in the current half from 7% in the first half.
It added: “Retail sales have been resilient into Q2 helped by warm weather although there is some variance by category. Consumer confidence metrics remain subdued and our new "Fear Index" suggests things may be getting worse.”
The shares of AB Foods fell 4% or 88p to 2226p, Kingfisher reversed 3.5% or 9.9p to 271.3p and Marks & Spencer dropped 3.9p to 354.5p.
The FTSE 100 index is 0.6% or 56.77 points lower at 9264.63.
Bunzl rose 5% or 120p to 2504p after it announced the resumption of its share buyback programme alongside in-line half-year results.
Bunzl profits fall, backs North America turnaround
07:37 , Graeme EvansBunzl today said adjusted profits fell 15.4% in the first six months of the year, driven by weaker performances in North America and continental Europe.
The FTSE 100-listed group, which provides essential not-for-sale products and services, shocked the City in April by cutting 2025 guidance due to tougher conditions in its largest market of North America.
Chief executive Frank van Zanten reiterated the group’s outlook in today’s half-year results, which showed a decline in adjusted profit to £345.6 million.
North America operating profit fell 14.7% to £197 million on a weaker margin of 6.4%, while the surplus in continental Europe dropped 9.9% to £94.4 million.
He said: “Actions taken in our largest business in North America have re-energised the team and we are seeing early positive indicators of success, with the profit momentum seen through the first half in-line with our expectations.
“This is a market-leading business, and while the benefits of some actions are not expected to drive improvements until well into 2026, we are focused on creating a stronger platform for its long-term profitable growth.”
The group announced the acquisition of two businesses in Mexico and Spain and said it intended to resume the £200 million buyback programme it paused in April.
Food price growth at 18 month high
07:07 , Graeme EvansFood prices have risen at their fastest pace for 18 months amid surges in the cost of chocolate, butter and eggs, latest figures show.
Food inflation lifted to 4.2% this month from 4% in July, according to the British Retail Consortium (BRC)-NIQ Shop Price Monitor.
It marked the highest level since February 2024.
Bosses at the trade body warned that the acceleration in price increases “adds pressure” to families who are already under pressure from the cost of living.
FTSE 100 seen lower after weaker US session
07:05 , Graeme EvansThe FTSE 100 index is facing a downbeat start to the new week, with futures trading pointing to a decline of about 0.2% at the opening bell.
London’s top flight is on a run of five positive sessions after closing on Friday at a record for a fourth consecutive day in a row.
Today’s decline from 9321.40 follows Monday’s weaker session on Wall Street as markets gave up some of the gains seen after Federal Reserve chair Jerome Powell boosted hopes of a September rate cut.
The Dow Jones Industrial Average lost 0.8%, the S&P 500 index eased 0.4% and the Nasdaq Composite dipped 0.2%.
