Markets: Live

Jet2 bookings rise | SMS | Diageo | China Covid boost


4.30pm: Market rises on US hopes

“Booze is supposed to be pretty recession resistant but Diageo (see below) sparked some concern from investors, despite an otherwise solid set of first-half results, by reporting slowing growth in its key North American market, says AJ Bell investment director Russ Mould.

Wizz Air (see below) was punished for adopting a more cautious tone than its competitors on the outlook for the holidays market, helping to bring some sobriety to a share price which had doubled in just three months.”

The FTSE 100 closed 16.24 points higher at 7,761.11.

9.30am: IBM job cuts

IBM will cut 3,900 jobs joining the wave of tech giants axing workers amid the global economic downturn.

The cuts, which amount to about 1.5pc of its workforce, will affect staff remaining at the company after spinning off its Kyndryl and Watson Health units.

The lay offs are expected to cost the business $300m (£242m).

9.15am: Rates plea

Andy Haldane, former chief economist at the Bank of England, has called on the Bank to slow down its pace of interest rate rises this year.

Mr Haldane, who is now chief executive at the Royal Society of Arts, said he hoped that now headline inflation had peaked “there’s a decent chance that central banks will go a bit slower during the course of this year”.

7.30am: TSB pays out

TSB intends to pay its Spanish parent Banco Sabadell a dividend for the first time despite posting a loss and suffering a £48.7m penalty for a disastrous IT meltdown.

Full story here

7am: Jet2 bookings strengthen, Wizz Air cuts losses

Leisure travel group Jet2 said winter 2022/23 forward bookings have continued to strengthen throughout December and January.

Consequently, average load factors are now slightly ahead of winter 2018/19 at the same point (against a 24% increase in seat capacity) with pricing and margins significantly higher.

In addition, the mix of package holiday customers has remained consistent at approximately 60% of total departing passengers for the season, 16 percentage points higher than Winter 2018/19.

Given these positive indicators, the board now expects to exceed current average market expectations and report a group profit before foreign exchange revaluation and taxation for the year ending 31 March 2023 of between £370m and £385m.

On sale seat capacity for summer 2023 is currently 6.6% higher than summer 2022 at 15.2m seats.

Hungary-based budget airline Wizz Air narrowed losses in the third quarter on the back of fare increases and higher booking volumes.

The carrier posted a core loss of €2.8m for the three months to December 31, compared with a loss of €87.5m a year earlier. Wizz still expects a loss for the full year but held guidance for a return to profits in 2024.

Revenue for the period soared 132% to €911m.

7am: Diageo beats sales estimates

Johnnie-Walker-Princes Street

Johnnie Walker to Guinness group Diageo beat first-half sales forecasts as it raised prices and more people drank premium spirits.

Organic net sales (excluding the effect of acquisitions and currency moves) grew 9.4% due to volume growth of 1.8% and higher prices. This beat analysts’ forecasts for a 7.9% rise.

Organic operating profit grew 9.7%, with margins modestly higher.

Diageo expects organic net sales to consistently grow within a range of 5% to 7% and organic operating profit to grow sustainably within a range of 6% to 9%.

7am: St James’s Place

St James’s Place recorded a 3.6% drop in funds under management over 2022 to £148.37 billion from £153.99bn a year earlier.

Gross inflows during 2022 fell 6.4% to £17.03bn from £18.20bn in 2021, whilst net inflows dropped by 11% to £9.78bn from £11.04bn.

7am: Smart Metering Systems

Underlying EBITDA for the year ending 31 December is expected to be marginally ahead, and adjusted PBT is expected to be materially ahead of previous expectations.

The company remains confident for 2023 and the medium-term outlook. It expect a FY 2022 dividend of 30.25 pence per share, up 10% year-over-year, in line with stated policy.

Tim Mortlock, CEO, said: “We delivered strong operational and financial performance during FY 2022, highlighting the attractiveness of our CaRe asset portfolio and the strong execution by our teams.

“As a consequence, results for the year are expected to be ahead of our previous expectations.

“Our business can deliver significant value in the years ahead, with our inflation-linked recurring revenues from our existing meter and data assets providing considerable protection against macro-economic shocks.

“The strong momentum in our meter and grid-scale batteries businesses provide us with confidence in our 2023 and medium term outlook.”

Global markets

Rate-setters in Canada signalled on Wednesday that they might pause on policy, raising hopes across the markets that borrowing costs have peaked.

Further encouragement for investors came from reports that the new Covid-19 boosters were effective against the latest strains of the virus, while in China officials reported that the infection rates were slowing.

The number of daily Covid-19 deaths in China has fallen by nearly 80% since the start of the month, authorities have said, in a sign that the country’s unprecedented infection surge may have started to abate.

Wall Street closed roughly flat as investors digested weaker than expected outlook statements from GE, Microsoft and Texas Instruments.

The Dow Jones Industrial Average ended up by 0.03%, the S&P 500 eased by 0.02% and the Nasdaq Composite was off by 0.18%.

“The last few weeks may turn out to perfectly encapsulate how the year will be as a whole, fluctuating significantly and suddenly between optimism and pessimism as the data and headlines dictate,” said Craig Erlam, senior market analyst for UK & EMEA at OANDA.

In Tokyo, the Nikkei 225 index was down 0.1%. The Hang Seng index in Hong Kong was up 2.1%.

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