The UK’s FTSE 100 held on to gains to end the week on a high, shrugging-off weaker retail sales data and while concerns over China eased thanks to cash-strapped property firm Evergrande making a last-minute bond interest payment this week, according to reports.

UK retail sales volumes fell 0.2% in September, bucking expectations for a monthly rise of 0.5%.

At the finish, the UK benchmark closed 0.2% up at 7,204.55 despite a drop-off in major US markets on Wall Street. The Dow, S&P and Nasdaq came under selling pressure as the morning session wore on as manufacturing growth cooled on lingering supply and labour constraints that are fuelling even greater inflationary pressures across the economy.

However, business activity at US service providers expanded the most in three months, which could see US markets claim a third straight week of gains.

Nearly nine out of 10 US companies that have reported have beaten Wall Street expectations so far this earnings season, according to data, with the widely followed FAAMG stocks (Facebook, Amazon, Apple, Microsoft and Google/Alphabet) are all set to post quarterly earnings next week.

LSE’S SLOWING GROWTH

Shares in London Stock Exchange (LSEG) plunged 6% to £76 on slowing growth worries. The UK stock market operator reported 7.6% growth in third quarter total income and insisted it is ‘comfortably’ on-track to achieve £125 million of cost synergies in 2021 from the integration of data provider Refinitiv.

But while the LSE maintained expectations for full year total income to grow between 4% to 5%, it also warned fourth quarter income is not expected to grow as fast as that seen in the third quarter as the company laps last year’s strong Q4 comparator.

Supermarket giant Sainsbury’s (SBRY) slipped 0.9% lower to 293.6p after ending talks over the possible sale of Sainsbury’s Bank, arguing the potential offers didn’t offer value to shareholders.

NEW COVID ROOMS SQUEEZE

Hotel chain InterContinental Hotels (IHG) cheapened 3% to £48.50 despite announcing that trading continued to improve ‘significantly’ in the third quarter, with revenue per available room or RevPAR recovering closer towards pre-pandemic levels as more and more guests returned to its hotels around the world.

The share price fall reflected trepidation that rising Covid case rates in some of the hotel giant’s markets may lead to renewed restrictions which could negatively affect performance.

Insulation and roofing company SIG (SHI) rallied nearly 6% to 48.96p as the company upgraded its full year profit outlook after reporting a rise in third quarter sales driven by a strong performance in its UK distribution business.

Sportswear retailer JD Sports Fashion (JD.) rose nearly 2% to £10.59 after acquiring an 80% stake in Cosmos Sport, which operates 57 stores in Greece and three in Cyprus.

Executive chairman Peter Cowgill insisted ‘this is another exciting acquisition for JD that further expands our presence in Europe’.

SMALL CAP WRAP

Touch sensors manufacturer Zytronic (ZYT:AIM) ended 9% up at 180p after the company said it expects to report a profit for the full year after delivering a ‘considerable’ turnaround with a return to profitability in the second half of the year.

Currency and derivatives manager Record (REC) went up 4% to 83p as a positive second quarter trading update confirmed modest growth in client numbers.

During the quarter, Record saw net inflows of $600 million into its higher margin Dynamic Hedging product and the company also announced a collaboration with a new EU partner to develop an investment product focused on the German institutional market.

And virtual tumor technology tiddler Physiomics (PYC:AIM)  firmed 1% to 6.15p on news it has won further contracts from existing client Merck that it expects to be completed by the end of this calendar year.

These projects involve simulations of clinical efficacy of drug products in Merck’s DNA damage and repair portfolio.

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Issue Date: 22 Oct 2021