FTSE 100 steadies despite US slump, Rightmove up 2%

The FTSE 100 index today showed resilience at the end of a busy week of central bank developments.

London’s top flight initially fell to 7652 on the back of last night’s poor Wall Street session before a rally to 5.41 points higher at 7684.03.

The UK-focused FTSE 250 index also improved on its position at the opening bell to settle 28.97 points lower at 18,609.58.

Auto Trader and Rightmove led the FTSE 100 with gains of 2% while Lloyds Banking Group added 0.4p to 44.8p after Deutsche Bank backed the lender with a 62p target price.

Cannes Lions events business Ascential topped the FTSE 250 index, up 6.6p to 196.9p following a 17% rise in half-year underlying earnings.

Mothercare woes go on as sales fall in Middle East

Mothercare’s troubles showed no signs of slowing, as the retailer blamed “continuing challenges” for its Middle Eastern franchisees for sliding sales.

The business, which licenses the Mothercare brand abroad since the UK high street arm collapsed, saw sales fall by 15% in the six months to mid-September, to £132.5 million.

Mothercare says it is in discussion with prospective lenders “to ensure that the group has adequate and appropriate financing for the future”.

The shares lost another 15.7% to 3.5p. The business, once worth £7.5 billion, is now valued at £24 million.

Investec profits grow as Rathbones wealth merger closes

Investec’s profits are set to rise as the City and South Africa-based firm closed the deal to sell its wealth arm.

The business expects profits to land between £428.7 million and £449.6 million for the six months to 30 September, which would be up around 6-10% from last year.

Most of the growth was driven by its UK business, where profits are set to be up 20%.

Investec said successful acquisition of new clients for its wealth business – which was sold to 281-year-old City firm Rathbones in a deal that closed yesterday – helped to boost profits, as did higher interest rates.

Shares are up 1.3% to 478.1p.

Consumer optimism rises to 20-month high

Consumer confidence is its strongest since January 2022 after the monthly index compiled by GfK improved by four points to minus 21.

The upturn in optimism has been driven by expectations for the UK economy in the coming year, which increased six points, and by a four-point boost to the major purchase measure.

The index measuring changes in personal finances rose two points at minus 13, some 15 points better than a year ago. The forecast for personal finances over the next 12 months is 38 points higher than during last year’s mini budget turmoil.

The improvement comes against a backdrop of falling inflation figures, growth in wages and high interest rates.

GfK director Joe Staton said: “While this month’s improved headline score is good news, it’s important to note many households are still struggling with the cost-of-living crisis and that economic conditions are tough.

“The reality is that consumer confidence remains suppressed, and the financial mood of the nation is still negative.”

Volatility up after Fed rates message, pound at $1.22

Fears that Federal Reserve interest rates will stay high throughout 2024 left its mark on US shares yesterday as the S&P 500 index experienced its worst session since March.

The S&P’s 1.6% fall accelerated after strong labour market data fuelled market jitters caused by the hawkish tone of the central bank’s rates decision on Wednesday.

With the 10-year US Treasury yield its highest since 2007 and the VIX index of volatility up for a fifth consecutive day, the tech-focused Nasdaq closed 1.8% lower last night.

The FTSE 100 index declined 0.7% to 7678 yesterday, with futures trading for today pointing to a 10 point fall according to IG Index.

The pound, meanwhile, is at its lowest level against the US dollar since March after declining 1% to $1.22 on the back of a pause in Bank of England rate rises. Brent Crude futures today stood near to $93.50.

Retail sales up 0.4% month-on-month

UK retail sales came in slightly below expectations in August, in a reading that will support the Bank of England’s decision to pause rate hikes yesterday.

Sales recovered by 0.4% month-on-month after a sharp fall in July, but were still down 1.4% year-on-year amid bad weather for most of the month. Both figures were 0.1 percentage points below economists’ forecasts.

ONS senior statistician Heather Bovill said: “Retail recovered a little from the large fall seen in July, driven by a partial bounce back in food and a strong month for clothing, though sales overall remain subdued.

“These were partially offset by internet sales, which dropped slightly as some people returned to shopping in person following a very wet July. Fuel sales also fell, with increased prices hitting demand.”

Fresh Microsoft-Activision deal ‘opens the door’ to being cleared, CMA says

Microsoft’s revised deal with Call of Duty maker Activision has addressed the concerns of the UK competition watchdog, it said today, adding that it “opens the door” to being cleared.

The Competition and Markets Authority had blocked a previous version of the deal, citing Microsoft’s already-dominant position in cloud gaming services. Microsoft came back with a fresh deal, under which Ubisoft would manage Activision’s cloud streaming rights.

In a statement the CMA said: “The CMA considers that the restructured deal makes important changes that substantially address the concerns it set out in relation to the original transaction earlier this year.

“In particular, the sale of Activision’s cloud streaming rights to Ubisoft will prevent this important content – including games such as Call of Duty, Overwatch, and World of Warcraft – from coming under the control of Microsoft in relation to cloud gaming.

“While the restructured deal is materially different to the previous transaction and substantially addresses most concerns, the CMA has limited residual concerns that certain provisions in the sale of Activision’s cloud streaming rights to Ubisoft could be circumvented, terminated, or not enforced.

“To address these concerns, Microsoft has offered remedies to ensure that the terms of the sale of Activision’s rights to Ubisoft are enforceable by the CMA. The CMA has provisionally concluded that this additional protection should resolve those residual concerns.”

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Recap: Yesterday’s top stories

Good morning. Here’s a summary of our top stories from yesterday: