FTSE 100 Closes Down 1.3% on Renewed Interest-Rate Caution

The FTSE 100 closed Friday's session down 1.3% at 7360.55 points on renewed caution after U.S. Federal Reserve Chairman Jerome Powell pushed back against the narrative of an end to the rate-hike cycle. "As pushbacks go this was more of a mild shove than a body slam, but it was enough to temper some of the recent exuberance among investors," AJ Bell investment director Russ Mould said in a note. Drinks giant Diageo tumbled 12% after a profit warning further dragged the London index. A truncated risers board was led by defense major BAE Systems, up 1.2%. The London blue-chip bourse closed the week down 0.8%.

FTSE 100 Falls After Powell Comments; Diageo Slides After Warning on Outlook

1018 GMT - The FTSE 100 falls 1% to 7382.06, tracking losses in European stocks after U.S. Federal Reserve Chair Jerome Powell warned policymakers wouldn't hesitate to raise interest rates again if necessary. Alcoholic beverage company Diageo leads fallers after cutting its guidance for both the short and medium term, sliding 13.8%. "It's a rarity to see Diageo issue bad news, yet no business is immune to setbacks and the drinks giant has confirmed that life is not going well," writes AJ Bell investment director Russ Mould. Online grocer Ocado also falls sharply, losing 6.2%, while other losers include property companies and miners. Oil companies buck the trend as oil prices rise, with Shell and BP up around 1%. ([e-mail])

COMPANIES NEWS:

Diageo Sees Slower Net Sales Growth Due to Weak Latin America, Caribbean Performance

Diageo said that it expects to see slower growth than the second half of the previous fiscal year due to a weaker performance in Latin America and Caribbean, which is nearly 11% of net sales value.

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Galliford Try Confident It Will Meet Full-Year Targets

Galliford Try Holdings said it is confident that it will meet its targets for fiscal 2024 as its operations trade in line with its revised expectations.

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Global Ports Holding Revenue Fell; Passenger Volumes Seen Ahead of Guidance

Global Ports Holding said revenue fell in the first half of its fiscal year due to lower construction activities, and that its passenger volume expectations for the year are ahead of guidance.

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Redrow Sees Revenue, Profit at Lower End of Guidance After Subdued Autumn

Redrow said it expects performance for fiscal 2024 to be toward the lower end of its guidance due to weaker-than-expected sales rate caused by a subdued autumn housing market.

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Warpaint London Sees Full-Year Results Beating Views

Warpaint London expects to report 2023 results ahead of market expectations given strong trading and growth across its geographic areas.

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Argentex Sees Performance Below Market Expectations as Backdrop Remains Challenging

Argentex said it expects full-year performance to miss market expectations as current market backdrop remains challenging.

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Chemring Sees Adjusted Operating Profit Ahead of Views

Chemring Group said it expects the adjusted operating profit for its fiscal year to be ahead of market expectations, and that its robust growth outlook is seen continuing over the long period.

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Tungsten West Appoints Alistair Stobie CFO

Tungsten West said Alistair Stobie has been appointed chief financial officer effective from Monday.

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Ethernity Networks Shares Fall on Settlement Agreement

Shares in Ethernity Networks fell after it said it has agreed a settlement with 5G Innovation Leaders Fund that includes terminating a subscription agreement, issuing a number of shares and extinguishing its liability to the company.

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BowLeven Shares Fall on Going-Concern Warning

Shares in BowLeven fell after the company said there is material uncertainty about its ability to continue as a going concern.

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Former NatWest CEO Alison Rose Misses Out on $9.3 Million Payout

Former NatWest Chief Executive Officer Alison Rose will miss out on 7.6 million pounds ($9.3 Million) in bonuses and share awards and will only receive the fixed elements of her pay for the rest of her notice period ending July 26, the bank said.

MARKET TALK:

UK's Narrowed Trade Deficit Shows Resilient Global Markets

1016 GMT - The U.K's poor trade performance in recent months eased in September, as global demand showed resilience against the current economic uncertainty and geopolitical tensions, according to Jack Sirett, Partner at global financial services firm Ebury. The country's goods-and-services trade deficit narrowed by GBP7.1 billion to GBP6.0 billion in the third quarter, as imports tumbled substantially. "A silver lining compared to last year is the improved gas storage ahead of winter minimizing the frenzied trade flows of fuel like LNG that distorted typical trade patterns," Sirett says. The data also bolsters the position of U.K. trade for those anxious about the conflict in the Middle East, the effects of which will be seen in 4Q, he adds.([e-mail])

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UK Set to Follow Stagnation With Decline

0906 GMT - The U.K. could be headed for recession despite avoiding it so far, warns economist Philip Shaw at Investec. Gross domestic product stagnated in the third quarter, slowing from slight growth previously in the year, as services contracted. And this trend could continue, with the overall economy likely to decline in the fourth quarter of 2023 and the first of 2024, according to Investec's forecasts. "It seems logical that the economy loses further momentum as the impact of higher interest rates intensifies," Shaw writes in a note. "We note that surveys have become progressively more downbeat," he says.([e-mail]; @joshualeokirby)

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UK Could Still Suffer Recession as Jobs Market Cools

0902 GMT - A recession in the U.K. can't be ruled out, even if GDP data for the third quarter came in a little better than expected, ING economist James Smith says in a note. The economy was rescued by net imports, a category that tends to be volatile between quarters, while elsewhere consumption and business investment were negative, he notes. Indeed, the fact that the U.K. economy didn't contract in the latest quarter will, temporarily, dampen some of the discussion about a recession, but there has still warning signs from dampening jobs hiring as interest rates squeeze margins for businesses, he says. Still, the GDP figures are of limited consequence for the Bank of England, which will focus more on next week's services inflation and wage-growth data, Smith adds. ([e-mail])

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UK Economy Looks Bleak Despite Avoiding Recession

0841 GMT - "Subdued is the word du jour," writes Danni Hewson, head of financial analysis at AJ Bell, after the U.K. economy was shown to have stagnated between July and September, slowing after slight growth in the first half of the year. The country has at least avoided falling into recession, but cost-of-living pressures are clearly strangling services and rate hikes weighing on the housing market, Hewson says in a note. "All sectors are struggling. There are no stars in this set of figures, no big boosts to offset falls elsewhere," she says. "Stagnant waters can begin to smell quite quickly." ([e-mail]; @joshualeokirby)

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(END) Dow Jones Newswires

11-10-23 1242ET