London open: Markets struggle for direction, but M&S shares surge

(Sharecast News) - The FTSE 100 was struggling for direction in early deals on Wednesday as investors continued to act cautiously following strong gains made last week. After an initial dip into the red, London's benchmark index was up just 0.1% at 7,417 by 0848 GMT, having traded within a tight range of 50 points or so for the past three sessions.

However, high street stalwart Marks & Spencer was a standout performer, surging nearly 10% after restoring its dividend and impressing with its first-half results.

"The last two days have seen European markets struggle to build on the gains of last week, with some modest profit taking starting to kick in, even as investors start to price in the prospect of rate cuts as soon as next year," said analyst Michael Hewson from CMC Markets.

"In the space of a week, we've gone from higher for longer back to rate cuts in 2024, and this time the push back from central bankers isn't anywhere near as aggressive."

In economic news on Wednesday, German consumer prices stalled over the month of October, meaning the annual rate of inflation held steady at 3.8%, as expected by the market. Eurozone retail sales, due out at 1000 GMT, are forecast to show a 0.2% decline in September after a 1.2% drop in August.

However, the focus of the session is likely to be on speeches from central bank heads in the UK and US, Bank of England governor Andrew Bailey and Federal Reserve chair Jerome Powell, as markets look for any indication of how future monetary policy will pan out.

M&S impresses

UK retailer Marks & Spencer on Wednesday reinstated its dividend and delivered a 56.2% rise in first-half profits. The company posted pre-tax profits of £325.6m in the six months to September 30, compared with £208m a year ago. Revenue rose 10.8% to £6.1bn, driven by a 14.7% rise in food sales, up 11% on a like-for-like basis. Shares were up 9.3% even as the company sounded a note of caution about future trade in the run in to Christmas citing higher interest rates, weather and geopolitical events.

Sector peers Next, B&M, AB Foods and Ocado were also performing well early on.

A bunch of financial stocks were limiting gains on the FTSE 100, with shares in Hargreaves Lansdown, Prudential and Legal & General all lower.

However, Hiscox edged higher reported a 6.8% increase in group insurance contract written premiums in the first nine months of the year, to $3.76bn, driven by strategic capital deployment in London Market and Re & ILS.

ITV disappointed after reporting just a 1% improvement in total revenue for the first nine months of the year to £2.98bn, causing shares to fall over 5%. The broadcaster said the growth in revenue from ITV Studios and M&E digital revenues offset the decline in linear advertising revenue as it continued to diversify its business.

Mining giant Anglo American fell after reporting another big slide in diamond sales at its latest tender of De Beers, blaming continuing macroeconomic "challenges". De Beers sold just $80m of rough diamonds in its ninth sales cycle of the year, down from $200m at the previous tender and $454m in the ninth tender of 2022.

Pub operator JD Wetherspoon rose after announcing a 9.5% increase in like-for-like sales in the first quarter, driven by growth in bar, food, and fruit machine sales.

Market Movers

FTSE 100 (UKX) 7,417.80 0.10% FTSE 250 (MCX) 17,729.40 -0.18% techMARK (TASX) 4,105.01 0.29%

FTSE 100 - Risers

Marks & Spencer Group (MKS) 246.20p 9.33% Entain (ENT) 967.40p 2.81% Associated British Foods (ABF) 2,308.00p 2.58% Rolls-Royce Holdings (RR.) 229.40p 1.50% Next (NXT) 7,430.00p 1.39% B&M European Value Retail S.A. (DI) (BME) 539.60p 1.35% Flutter Entertainment (CDI) (FLTR) 13,725.00p 1.29% Compass Group (CPG) 2,074.00p 1.17% Ocado Group (OCDO) 556.40p 1.13% Endeavour Mining (EDV) 1,710.00p 1.06%

FTSE 100 - Fallers

RS Group (RS1) 681.40p -2.01% Hargreaves Lansdown (HL.) 715.60p -1.68% Prudential (PRU) 889.60p -1.37% Centrica (CNA) 148.80p -1.36% Legal & General Group (LGEN) 219.00p -1.26% Smith (DS) (SMDS) 288.80p -1.23% National Grid (NG.) 979.40p -1.09% BT Group (BT.A) 122.75p -1.05% St James's Place (STJ) 651.20p -1.03% SSE (SSE) 1,644.50p -1.02%

FTSE 250 - Risers

Dr. Martens (DOCS) 124.60p 2.81% Darktrace (DARK) 367.70p 2.17% Carnival (CCL) 913.60p 1.81% Virgin Money UK (VMUK) 162.10p 1.76% SDCL Energy Efficiency Income Trust (SEIT) 62.00p 1.47% Aston Martin Lagonda Global Holdings (AML) 208.00p 1.36% Babcock International Group (BAB) 391.40p 1.35% HGCapital Trust (HGT) 388.00p 1.31% Domino's Pizza Group (DOM) 374.60p 1.24% Centamin (DI) (CEY) 86.55p 1.23%

FTSE 250 - Fallers

ITV (ITV) 62.02p -5.46% Liontrust Asset Management (LIO) 533.50p -4.13% Me Group International (MEGP) 138.00p -3.50% AJ Bell (AJB) 266.00p -3.20% Premier Foods (PFD) 119.00p -2.62% Tritax Eurobox (GBP) (EBOX) 47.00p -2.49% Capital Gearing Trust (CGT) 4,375.00p -2.34% Pennon Group (PNN) 725.00p -2.29% Rathbones Group (RAT) 1,506.00p -2.21% Coats Group (COA) 68.00p -2.02%