FTSE Today: Banking and pharmaceuticals struggle; NatWest takes a hit

Stocks in London wrapped up the week on a sombre note, with disappointing earnings taking a toll on the banking and pharmaceutical sectors. The FTSE 100 index closed down 0.9%, while the FTSE 250 edged up by 0.5%, and the AIM All-Share saw a 0.7% increase.

Fresnillo Shines Bright on FTSE 100, Gold Sees a Rise

Among the notable performers on the FTSE 100 was gold miner Fresnillo, which saw a notable upswing of 3.0%. This rally came as the price of gold itself climbed to $1,981.94 per ounce, up from $1,978.13.

NatWest Takes a Hard Hit with Profit Outlook Trimmed

NatWest bore the brunt of the day’s losses, plummeting by 12%. The bank reported an increase in total income to £3.49 billion from £3.23 billion, along with a rise in operating pretax profit to £1.33 billion from £1.09 billion in the third quarter of 2023. However, it was the bank’s decision to cut its margin outlook for the year that did not go down well. The revised projection anticipates a full-year bank net interest margin ‘to be greater than 3%’ after an initial prediction below 3.20%.

Lloyds, Barclays, Virgin Money Stumble Amid NatWest’s Slide

In the shadow of NatWest’s decline, other banking giants followed suit, with Lloyds shedding 3.4%, Barclays slipping by 2.3%, and Virgin Money retreating 2.2%. However, OSB Group swam against the current, posting a 4.5% gain.

IAG’s Soaring Q3 Earnings and Optimistic Outlook

International Consolidated Airlines Group (IAG) emerged as a bright spot, with its shares gaining 3.2%. IAG reported robust revenue figures for the third quarter, with earnings climbing to €8.65 billion from €7.33 billion the previous year. Their pretax profit also saw a remarkable 57% increase to €1.58 billion from €1.01 billion. IAG now foresees 2023 as a year of “strong recovery” and noted that customer bookings for the fourth quarter align with expectations.

Digital 9 Infrastructure Contemplates Verne Global Stake Divestment

Digital 9 Infrastructure marked a 10% increase as the company expressed its intent to assess the divestment of its entire stake in the Verne Global group of companies. Interested parties have submitted indicative offers to syndicate a majority stake in Verne Global to an unnamed ‘strategic capital partner,’ with finalized terms set to be unveiled in the fourth quarter of 2023. This move is anticipated to accelerate balance sheet deleveraging and enhance shareholder value.

Starvest’s Dramatic Surge and Proposal for London Listing Cancellation

On AIM, Starvest saw an impressive 71% surge. The mineral exploration investor, frustrated by its shares trading at a ‘substantial discount,’ proposed cancelling its London listing. Starvest recommended returning its interests in Greatland Gold and fellow London listing Ariana Resources to its shareholders through a capital distribution. A vote on this proposal will be held at a general meeting on November 21, with shares to be cancelled on November 29 if approved.

Next week HSBC is set to release its third-quarter results on Monday.