The FTSE 100 recouped some of its earlier losses by midday on Tuesday, helped by a falling pound on reports the EU will ignore the UK’s Brexit ultimatum, as well as news that US president Donald Trump has returned to the White House.

The exporter-heavy index traded relatively flat at 5,939 by 12pm as the pound fell against the euro and dollar.

It follows reports from Bloomberg that the EU is preparing to ‘call Boris Johnson’s bluff’ over next week’s Brexit deadline, betting the UK’s Prime Minister won’t walk away if he fails to draw concessions.

The bloc is reportedly prepared to let talks continue into November or December, with evidence Johnson is already softening his demands slightly, telling the EU that 15 October isn’t the final date for a deal to be concluded, but instead to establish that an agreement is possible.

It comes as investors were also given grounds for optimism following Trump’s return to the White House after a stay in hospital with Covid-19, removing some uncertainties ahead of the US presidential election next month.

US futures markets suggested Wall Street would consolidate its gains from Monday on the news.

ANOTHER WATCHES OF SWITZERLAND UPGRADE

Luxury watch and jewellery retailer Watches of Switzerland (WOSG) soared 22% to 407p after it said revenues in the first 10 weeks of the second quarter had been stronger than expected, rising 20% in constant currency, leading the firm to upgrade its annual revenue and margin guidance.

Revenues for the year through April are now expected to between £880 million and £910 million, up from the firm's previous guidance of £840 million to £860 million.

The company’s EBITDA (earnings before interest, tax, depreciation and amortisation) margin was seen rising by 1.5% compared with previous guidance of no change.

Mining company BHP (BHP) edged 0.1% higher to £16.54 as it announced it had signed an agreement to acquire Hess Corporation’s 28% working interest in Shenzi, a six-lease development in the deepwater Gulf of Mexico, for $505 million.

The acquisition, expected to close by December, would bring BHP’s working interest to 72% and immediately add roughly 11,000 barrels of oil equivalent per day of production.

VICTREX DEMAND HIT HARD BY PANDEMIC

In a full-year trading statement plastics manufacturer Victrex (VCT), which fell 1.47% to £18.93, said revenues for the year through September were expected to fall to £266 million, down from £294 million year-on-year, including a 27% slump in the fourth quarter.

Victrex was impacted by lower demand in the aerospace and energy sectors, both of which were hit hard by the Covid-19 pandemic.

In a third-quarter trading statement professional services group FDM (FDM), which gained 1% to £10.34, said it remained cautious on its recovery, but had continued to trade ‘comfortably’ in line with expectations amid signs of more normal market conditions.

Iron-ore producer Ferrexpo (FXPO) fell 2.4% to 169.8p as it said a court order restricting the sale of its 50.3% stake in Ferrexpo Poltava Mining remained in place after its appeal against the ruling was dismissed by the Kyiv Court of Appeal.

The company also announced a 12% decline in third-quarter pellet production to 2.5 million tonnes from the second quarter's 2.9 million tonnes, owing to reduced volume amid planned pelletiser maintenance in early September 2020.

WAGAMAMA OWNER RESTRUCTURES

Wagamama and Frankie & Benny’s owner Restaurant Group (RTN:AIM) gained 3.85% to 56.6p, despite booking a deeper first-half loss after the Covid-19 pandemic crimped sales, after it permanently shuttered outlets as part of a sweeping restructuring.

The company is in the process of terminating between 36 and 41 concession sites deemed economically unattractive based on expected footfall trends over the medium term.

It comes as pre-tax losses for the 26 weeks to 28 June amounted to £234.7 million, compared to losses of £87.7 million year-on-year. Revenue more than halved to £227.2 million, down from £515.9 million.

Shares in professional services group RBG Holdings (RBGP:AIM) shot 9.5% higher to 66.8p after the firm reinstated full-year guidance.

Based on management’s current forecasts, the firm’s board of directors now expects revenue and realised gains to be between £24 million and £26 million, up from £23.7 million last year.

The board said it will make a decision regarding the payment of an interim dividend when it has further visibility on the year-end position.

Global medical devices company Inspiration Health (IHC:AIM) soared 8.1% to 67p after it reported revenues up 77% to £14.2 million and operating profit up 122% to £1.1 million for the half year to 31 July 2020.

The board said the growth and profitability of the group now supported an implementation of a progressive dividend policy and proposed a maiden interim dividend of 0.2 pence per share.

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Issue Date: 06 Oct 2020