Welcome to the Investing.com UK weekly latest update, designed to keep investors informed on the newest UK stock market movements and key developments. In this weekly report, you’ll find a summary of the last week’s significant news, and trends affecting the FTSE 100 index, helping you stay ahead with timely insights for your investment decisions.
We update every Friday morning as soon as the London Stock Exchange (LSE) market opens at 8:00am UK local time (GMT+1).
FTSE 100 Share Price Opening 26th August 2024
The closing share price for the start of this week, (after the Bank Holiday) Tuesday 27th August, was 8,345.46, which sat +021% higher than at close on Friday 23rd August, indicating that the FTSE had a solid start to the week and needed to maintain that momentum.
Investor Sentiment This Week For FTSE 100 Predictions
The FTSE 100 started the week with a +0.21 improvement on Tuesday, and held steady on Wednesday with a minor -0.02 dip. This week has largely felt as though the UK markets have been holding their breath.
Last week’s report from S&P Global brought some encouraging news for the UK economy, showing a welcome rise in activity. The manufacturing PMI climbed to 52.5, while the services PMI hit 53.3, pushing the composite PMI up to 52.8 – the highest it’s been since 2022. Since a PMI above 50 means things are growing, these numbers are a good sign that both the manufacturing and services sectors are on the up. This is especially heartening when considering that the manufacturing PMI in the US stayed below 45 and the Eurozone reported a 45.8 – both signals that those areas are seeing a slowdown.
This rise in PMI suggests businesses are feeling more confident, which could potentially lead to more job creation and investment here in the UK. This positive momentum might also give the Bank of England some food for thought when it comes to their next policy meeting, perhaps leading to changes in consumer interest rates. Compared to the US and Eurozone, our stronger economic activity could attract more investors, further fuelling growth.
Despite the above PMI data pointing towards economic growth, the latest data from the Confederation of British Industry (CBI) revealed a third consecutive month of declining retail sales in August, as 27% of retailers reported lower sales. While this is an improvement from July’s 43%, it still significantly exceeds the expected 11%. Sentiment among retailers has also taken a hit, with many anticipating a moderate deterioration in their business situation over the next three months. Notably, this marks the second-weakest performance since April, and the CBI predicts further declines in September.
CBI economists have highlighted that these disappointing sales trends aren’t just confined to retail but are also seen in the wholesale and motor trade sectors. Retailers are responding to persistently weak demand conditions with increased caution, particularly when it comes to investment and hiring plans. This cautious outlook suggests that businesses are bracing for continued challenges ahead, reflecting the current uncertainties in consumer confidence and economic stability. While the retail sector navigates these hurdles, the broader implications for economic growth and policy initiatives will be crucial to watch in the coming months.
Caution seems to be spilling over to myriad sectors at the end of this month, with some of the biggest companies on the London Stock Exchange threatening to try their luck across the pond in the U.S. So far this year, only Raspberry Pi has joined the exchange with Shein and Revolut still not making their final decision. While BHP Group (LON:), Flutter (LON:) Entertainment, Tui, and CRH (LON:) Group have all changed their primary listings away from the London Stock Exchange.
As always, long-term investors are keeping an eye on the index and snapping up value buys wherever they can.
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We can see that the Investing.com UK community’s sentiment towards the FTSE 100 index has swung back to a more bearish outlook, with a 38-62 Bearish-to-Bullish split, compared to last week’s 20-80 split.
Notable FTSE 100 Movements & Stock Market News
Here are some of the top stories from the footsie 100 constituents over the past 5 days.
Burberry Loses Out In Next Shuffle
It looks like Burberry Group PLC (LON:) is set to step down from the FTSE 100 index in the upcoming quarterly reshuffle. This prediction comes from the latest guidance by FTSE Russell, the index administrator, but the final decision will hinge on share prices and market valuations next Tuesday, 3 September.
Burberry’s market capitalisation at £2.5 billion sits considerably below the FTSE 100 largest companies, and sees the luxury clothing brand poised to move down to the , making way for insurer Hiscox Ltd (LON:) to join the ranks of the FTSE 100.
Also preparing to join Burberry in the FTSE 250 is Raspberry Pi Holdings PLC (LON:), following its IPO back in June. The reshuffle will be based on data at the close of trading on 3 September, with confirmations expected on the evening of 4 September 2024. The changes will take effect on Monday, 23 September.
Bunzl Jumps Thanks To Dividend Hikes
Bunzl PLC (LON:) shares hit a new high after announcing a 10% rise in its interim dividend, a £250 million share buyback, and an optimistic year-end outlook. Despite a slight revenue dip of 0.4% to £5.7 billion in the first half of 2024, the underlying trends improved notably in the second and third quarters. Adjusted operating profit rose by 3.9% to £455.5 million, with margins improving to 8.0%. However, reported profit before tax fell by 11.9% to £279.4 million.
The company continues its acquisition spree with its eighth purchase this year, Australia’s PowerVac, raising their annual acquisition spend to a record £650 million. Based on current performance, including acquisitions and better margins, management expects a “strong increase” in adjusted operating profit and “robust” underlying revenue growth, despite a slight reported decline.
The board plans to allocate around £700 million annually from 2025 to 2027 for acquisitions and possibly returning capital to shareholders. Alongside the 10% dividend hike to 20.1p, the buyback begins immediately, with another £200 million anticipated at the time of full-year results. CEO Frank van Zanten highlighted the margin increase from 6% in 2019 to 8%, driven by margin management and recent acquisitions, while keeping debt leverage below targets. Shares jumped 11% to 3,572p in early trading, signalling market confidence in Bunzl’s growth strategy.
Ryanair Reassures Investors Over Falling Fares
Tuesday arrived with some positive news from low-cost airline Ryanair Holdings PLC (LON:). Ryanair’s CEO, Michael O’Leary, reassured that fares would likely fall by only around 5% this summer, an improvement from last month’s forecast of a 10% drop. O’Leary, who had previously warned of an “ugly scenario” for airlines, told Reuters that this situation now “looks like it has disappeared.” He mentioned that while fares were softening in April, May, and June, they have since stabilised.
Analysts at Peel Hunt (LON:) indicated that easyJet and British Airways-owner IAG (LON:) might outperform Ryanair despite the reassurances, due to a potentially worse yield performance for Ryanair compared to its UK-listed competitors. In light of these stats, on Tuesday morning Ryanair rival EasyJet PLC (LON:) became one of the FTSE’s best-performing stocks as it jumped over 4%.
Today’s FTSE 100 Close
The above investor sentiment and factors driving this week’s ‘Footsie’ volatility meant that today the FTSE 100 is likely to close at a price which sits higher than the weekly FTSE 100 opening price of 8,327.78.
What Are The Best FTSE 100 Shares To Buy?
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