The FTSE 100 index kicked off the day with a cautious tone, opening 0.1% lower at 7,412.40 points. Early trading saw a delicate balance as gains made by Associated British Foods, the owner of Primark, and Frasers Group, the parent company of Sports Direct were offset by notable declines in the oil and mining sectors, along with RS Group.
The mining sector started on the back foot, with Anglo American and Antofagasta seeing declines of 1.7% and 1.1% respectively, following weak economic data from China. Although exports dwindled, an uptick in imports hinted at strengthening domestic demand, offering a glimmer of hope amidst global economic uncertainties.
Declining oil prices also weighed on energy giants BP and Shell, leading to 1.1% and 1.0% decreases in their respective shares. The price per barrel of Brent oil fell to $83.71 early Tuesday, down from $86.00 late Monday afternoon, underscoring the delicate balance between OPEC production cuts and lingering global economic concerns.
Associated British Foods shares jumped 6.4%. The company announced an uptick in its final dividend, coupled with a special dividend, and outlined a substantial £500 million buyback. Despite challenges such as ‘unseasonal weather,’ the company reported robust annual earnings, particularly in its Primark retail arm. The group’s revenue for the year ending September 16 rose by 16% to £19.75 billion from £17.00 billion the previous year, while pre-tax profit increased by 25% to £1.34 billion from £1.08 billion.
Frasers Group, the owner of Sports Direct, mirrored the positive trend by rising 4.0% after announcing an £80.0 million stock buyback, aimed at reducing its share capital and bolstering investor confidence.
Watches of Switzerland soared by 9.8%. The company affirmed its annual guidance and unveiled ambitious long-term goals. Despite a modest 1.3% rise in revenue to £379 million from £374 million in the second quarter, the luxury watch retailer remains optimistic, citing robust demand in the luxury watch segment. Looking ahead, Watches of Switzerland plans to double its sales and profit by 2028, underscoring its confidence in future growth.
Industrial and electronics products distributor RS Group announced challenging trading conditions, leading to a 5.2% decline in its stock. The company reported a first-half earnings decline amidst unexpected market challenges, with revenue slipping by 0.8% to £1.45 billion from £1.46 billion in the half-year period ending September 30.
Naked Wines plummeted by 30% as it revised its annual sales forecast downward. The company cited weaker-than-anticipated trading in the US market as a primary factor contributing to its reduced projections. Furthermore, Naked Wines announced the immediate departure of CEO Nick Devlin, with founder and Chair Rowan Gormley assuming the role of executive chair on an interim basis.