Ikea lifted | Devro deal | SSE sells transmission stake
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5pm: Quiet market closes higher
With Wall Street closed for half the day after Thanksgiving, focus turned to the commodity-focused FTSE 100 which closed on a high as energy stocks pushed higher. The index eked out a gain of 20.07 points, or 0.3%, to 7,486.67.
Russ Mould, investment director at AJ Bell, said: “Investors might not realise it, but we’ve just had an important week in terms of the potential direction of markets going forward.
“Signs that the Federal Reserve might slow down the pace of interest rate hikes is the first step towards the pivot in strategy desired by so many investors.”
Shell was one of the best performing of London’s blue-chips, rising 24.5p to 2367p as oil prices were firmer.
Investors sold out of NatWest, causing the stock to close 2.75p lower at 256p after analysts at RBC downgraded the bank’s “outperform” recommendation to “sector perform”.
7am : SSE transmission sale
Energy utility SSE is selling a 25% stake in its electricity transmission network business to the Ontario Teachers’ Pension Plan Board for £1.46bn.
The Perth-based company said the deal would “unlock significant growth in both the transmission business and across the wider SSE group”.
7am: Ikea price hikes
Ingka Group, the owner of most IKEA stores, said price increases have helped offset higher costs and compensate for winding down operations in Russia.
The world’s biggest furniture retailer said operating profit in the 12 months through August came in 9% higher at €2.04 billion on a 6% rise in sales.
Net profit, however, slumped 82% to €287 million following a fall in one of Ingka Investments’ portfolios because of higher interest rates and lower bond values.
“During FY22, we needed to compensate substantial cost increases in raw materials, energy, transport and logistics,” chief financial officer Juvencio Maeztu told Reuters. “We absorbed many of these new costs ourselves, but ultimately had to pass on parts of them.”
The company closed its IKEA stores in Russia, previously accounting for around 4% of sales, and has since laid off most of its 12,000 employees in the country. Its Russian shopping malls remain open.
Ingka is the main franchisee to brand owner Inter IKEA, which is in charge of supply.
7am: Car production back in growth
UK car production returned to growth last month but is still well below pre-pandemic levels, new figures show.
A total of 69,524 cars were built in October, an increase of 7.4% on the same month a year ago, said the Society of Motor Manufacturers & Traders.
7am: Devro deal
Scottish meat casings producer Devro has agreed to be acquired in a £540 million deal by a food company owned by one of Germany’s wealthiest families.
In a trading update the board said the full year outlook is slightly ahead of its expectations, underpinned by a robust performance and foreign exchange tailwinds.
The UK market will be focused on retailers and Black Friday offers while US markets were closed yesterday for Thanksgiving and are closing early today, with little economic or corporate news in the diary.
The pound was quoted at $1.2106 early today, down from $1.2125 at the London equities close on Thursday.
Asian stocks were mixed. The Nikkei 225 in Tokyo was 0.4% lower while in China, the Shanghai Composite was 0.4% higher. The Hang Seng in Hong Kong was down 0.5%.