By Patrick Munnelly, Market Analyst, Tickmill
UK equities have remained relatively range-bound this week as investors assessed a mixed bag of corporate earnings at home, while also keeping an eye on the ongoing debt ceiling negotiations in Washington that have generated caution globally. On Friday, the FTSE 100 posted modest gains as positive factors fueled investor optimism. The index rose following the release of data indicating that domestic consumer confidence reached a 15-month high. This positive sentiment was further bolstered by optimism surrounding ongoing debt ceiling negotiations in the United States. The FTSE 100 finished up 14 points at 7756.87 at the end of Friday’s session.
FTSE 100 biggest movers
Weighing on risk sentiment, JD Sports Fashion LON:JD. fell out of bed, shedding over 7% on the day, following Foot Locker’s announcement of a lowered outlook. Foot Locker, a specialty athletic retailer, trimmed its annual sales and profit forecast after missing Q1 estimates. As a result, JD Sports saw a significant drop, making it the top loser on London’s blue-chip index. Analysts noted that JD Sports’ poor performance was influenced by Foot Locker’s disappointing numbers, which saw a more than 20% decline in pre-market trading. JD Sports’ stock is still up approximately 29% year-to-date.
Shares in Burberry LON:BRBY continued their slide experiencing a further 4% retreat, extending losses from Wednesday when the luxury brand acknowledged facing challenges in the Americas region.
On the positive side of the ledger, BT LON:BT.A, had a reversal in fortunes as investors in the largest broadband and mobile provider in Britain responded to the announced plans to reduce its workforce by cutting 55,000 jobs by 2030, which represents over 40 percent of its current employees. Under the leadership of CEO Philip Jansen, the company aims to establish a national fibre network and introduce superfast mobile 5G services. Despite reporting revenue growth for the first time in six years, BT’s expenses remain high. Jansen emphasised that the implementation of artificial intelligence (AI) after the fibre rollout will enable the company to operate more efficiently with fewer employees. He stated, “The new BT Group will be a more streamlined organisation, positioned for a promising future.” Investors are rewarding AI initiatives across a broad spectrum of businesses and BT’s move spurred some bargain hunting today as Barclays confirmed BT as an ‘overweight’ holding. Shares were up 3% at the close.
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