The FTSE 100 was slightly weaker on Tuesday as US regional banks provided a reminder that the banking mini-crisis had a material impact on several US institutions.
“Investors certainly lost their appetite for banking stocks, with NatWest falling 2.2%, Lloyds down 1.8% and Barclays slipping 1.2%. Together with weakness in economically sensitive mining and packaging sectors, the FTSE 100 fell 0.5% to 7,875,” said Russ Mould, investment director at AJ Bell.
First Republic Bank was down 20% in the US pre-market after the bank said they had lost $100bn in deposits this year. UK banks are due to report results over the next week with Standard Chartered kicking off tomorrow.
Associated British Foods
AB Foods shares were weaker after a 3% reduction in group-adjusted EBITDA. The outlook for their key Primark unit raised concerns about profit in the year as the health of the consumer deteriorates.
“Despite the impressive headline figures showing strong revenue growth, what really matters to investors is guidance for the future. On this front, there is enough cautious news to drive Associated British Foods’ share price down,” said Russ Mould, investment director at AJ Bell.
“Management is worried about the impact of high inflation and higher interest rates on the consumer and so it is guiding for slower growth at Primark. It also says margins aren’t going to improve near-term, which will disappoint many people”
AB Foods shares were down 3% at the time of writing.
Whitbread
Whitbread was the FTSE 100’s top riser following a very respectable jump in revenue and profit in FY23.
“There’s plenty of cheer in Whitbread’s results today. Revenue growth of over 50% has seen Whitbread surpass pre-pandemic levels at both the top and bottom line,” said Derren Nathan, Head of Equity Research at Hargreaves Lansdown.
“Its strong brand in UK midscale hotels sees it consistently outperform the wider market and hoover up market share, while still maintaining price discipline.”
Whitbread shares were 5.5% higher at the time of writing.