The FTSE 100 fell on Monday as geopolitical risk aversion returned to equities after an attack on a Russian concert hall raised fears of an escalation in Russia’s aggression against Ukraine.

Although Russia has not yet made any suggestions it would retaliate, Russia’s comments that the attackers were heading towards Ukraine have raised fears Putin will use the Moscow attack as an excuse for escalation in the war, which is now in its third year with no sign of resolution. Ukraine denied any involvement.

Oil prices ticked higher, and European stocks declined. The FTSE 100 was down 0.1% at the time of writing in a broad selloff that sent most industry sectors lower.

“Heightened tensions between Ukraine and Russia have brought a halt to the rally in equity markets seen last week,” said Russ Mould, investment director at AJ Bell.

“Investors were nervously watching proceedings from the side lines, particularly as oil prices crept up once again, including a 0.5% rise in Brent Crude to $85.84 a barrel. The commodity price has been strengthening amid concerns about tighter global supplies and a falling US rig count which implies less exploration and production activity.

“Asian markets were mostly down on Monday, including a 1.2% drop in the Nikkei 225 amid notable weakness in the real estate and healthcare sectors.”

Kingfisher disappoints

Kingfisher was the FTSE 100’s top riser after the DIY retailer failed to construct a recovery in 2023/24, hampered by the ongoing cost of living crisis and weakness in Europe. The company started Monday deep in the red before staging a monumental turnaround as the sessions progressed.

Kingfisher shares were 2.4% higher at the time of writing.

“As is often the case, profit warnings have come in threes for B&Q-owner Kingfisher. The company is being held back by its overseas operations and investors can only hope the progress the group has recently made with its UK business can be replicated in France and Poland,” Russ Mould said.

“The company and the wider DIY sector did well during the pandemic as one of the few elements of physical retail able to continue trading. Pent-up demand for home improvements during lockdown, driven by people being stuck indoors and wanting to enhance their environment, was a strong driver of growth.”

As Russ Mould mentioned, profit warnings tend to come in threes, and investors may now be confident the worst is behind Kingfisher.

Ocado was the top faller as the risk-off sentiment hit the food technology company. Ocado shares were 4% lower at the time of writing.

Innovative Eyewear, a Tekcapital portfolio company, has announced record-breaking results for the year ended 31st December 2023.

The launch of the world’s first ChatGPT-enabled smart eyewear and the integration of several patented innovations helped propel the company’s revenues 75% higher to $1,152,479 for the year.

Notably, Q4 revenue was $615,754 – more than all three prior quarters combined.

Last year, Tekcapital said it saw multi-million pound revenue for all of its portfolio companies in 2024. Should the momentum demonstrated in today’s results continue into 2024, Innovative Eyewear will be set to achieve this milestone in the year ahead.

Supporting further sales growth in 2024, the jump in Q4 revenue was recorded before Innovative Eyewear launched its new lines Nautica Powered by Lucyd®, Eddie Bauer Powered by Lucyd®, Reebok Powered by Lucyd®, and the Lucyd Armor smart safety glasses line.

The Nautica line was launched in early 2024, and other lines are expected to be revealed in the coming year.

The company believes that the introduction of the new lines will create the most diverse range of smart eyewear in the United States.

After launching the world’s first AI-enabled smart eyewear in 2023, Innovative Eyewear is targeting another first with the launch of smart safety glasses aimed at the construction industry and other sectors demanding hands-free, safety-grade connectivity through smart eyewear.

Lucyd were delighted to showcase the latest innovations in smart eyewear and meet with the world’s ophthalmic professionals at Vision Expo pic.twitter.com/PT2oMgQ3gZ

— Tekcapital Plc (@tekcapital) March 22, 2024

Harrison Gross, CEO of Innovative Eyewear, said, “Our growth trajectory is a testament to our team’s hard work and the strategic decisions we’ve made over the past year. As we continue to innovate and expand our partnerships, we’re excited to lead the charge in smart eyewear and integrate GenAI technology that enhances our users’ daily lives. The industry’s investment in this space reaffirms our direction, and we believe we’re poised to potentially capture significant market share with our upcoming product releases and anticipated global expansion.”

Innovative Eyewear (NASDAQ:LUCY) was 7% higher in US trade.

Kingfisher shares staged a sharp turnaround on Monday after the DIY retailer said profits would be lower in the coming year as 2023/24FY sales and profits fell.

Having started the session deep in the red, Kingfisher shares were trading 2.4% higher at the time of writing.

The UK showed resilience but European performance was particularly poor. French retail profit sank 28.% while the UK’s retail profit dropped 8%.

“Kingfisher has published a concerning set of results this morning. The multinational DIY retailer has issued what is now a third profit warning in the last six months, with consumers shelving plans for DIY home improvements, chipping away at Kingfishers’ bottom line. French and Polish regions of the business were noticeable underperformers in what continues to be a challenging period for the retail sector,” said Mark Crouch, analyst at investment platform eToro.

When homeowners have little confidence improvements to their property will translate to great value, they hold back on DIY projects. This dynamic has hurt Kingfisher’s profitability.

Group like-for-like sales were down 3.1% and reported operating profits fell 20%. Adjusted profit before tax was £567m, slightly higher than the guidance of £560m which was revised lower in its Q3 trading update.

The company said it expected profit before tax would be c.£490m to £550m in 2024/25.

“B&Q owner Kingfisher is still very much in repair mode, with its performance damaged by cost-of-living headwinds and a struggling housing market. It’s issued the third warning in six months about the outlook for profits, as they fell 25% for the full year,” said Susannah Streeter, head of money and markets, Hargreaves Lansdown.

“There had been hopes that with interest rates eyed on the horizon, and UK house prices stabilising, that demand for DIY products and services would bounce back, but the company says due to the lag between house sales and renovation projects being green lit, recovery is further on the horizon.”

It wasn’t all doom and gloom; Kingfisher has expanded the Screwfix brand through an online-only model into six new countries: Poland, Spain, Belgium, the Netherlands, Sweden and Austria, utilising a fulfilment centre in France. Kingfisher sees this as a model that can be replicated to enter new European markets.

“The bright spot appears to be online sales, with the revamped marketplace platform, also offering third party products, helping boost e-commerce sales in the UK and Iberia beyond expectations. However, in France, subdued consumer confidence and a weak housing market continues to be a drag and it’s now trimming back floor space for the Castorama chain while restructuring and modernising the store network to compete with rivals like Leroy Merlin,’’ Streeter said.

Pennon released a trading statement for the year ending 31st March on Monday, pointing to steady progress as the group make acquisitions designed to accelerate its push towards net zero.

Reference to the water company’s financial performance was brief, with the group saying, “Financial performance for the full year 2023/24 remains in line with management expectations.”

The focus of the release was the progress of its acquisition of SES Water and renewable energy sites. Pennon has acquired four renewable energy sites including one earmarked for solar power in Dunfermline.

The company said it has delivered £95m of customer support while keeping bills as low as possible.

“A short trading update revealed that everything’s flowing smoothly at Pennon. While no specific numbers were given today, management confirmed that the financial performance was in line with group expectations, with full-year results set to be released in May,” said Aarin Chiekrie, equity analyst, Hargreaves Lansdown.

“Pennon’s recent acquisition of Sutton and East Surrey Water (SES Water) is moving through the Competition & Markets Authority (CMA) review process as expected. The review is customary and there’s potential for it to clear phase 1 in summer 2024. The £89mn price tag looks attractive and helps Pennon increase its foothold across Southern England by bringing in more than 750,000 paying customers into the fold.

“Annual rainfall across the South West was up 50% in the second half of the year compared to long-term averages. Alongside 10 named storms since September and 12 yellow weather warnings for the region, managing all this extra water has proved challenging for the group. The significantly increased wastewater flows have led to increased use of storm overflows to help relieve the pressure, and that’s impacted some headline numbers. But on the whole, profit pipelines appear to be in robust shape.”

In the first of our weekly reviews, we will take a look at how the S&P 500 sits currently. The chart describes how price action has been in an extremely tight bullish trend since the lows in October last year. Ever since the Fed started to suggest thatthe rate hiking cycle had peaked and that rate cuts were looming, the market has seen steady and consistent buying.

On this chart we also throw up a Fibonacci retracement channel calculated from the October lows to the recent all time highs. This is not meant to be a forecast of where price action will fall to, but instead it is meant to highlight where the index could fall to.

After a strong move like this it is quite common for price action to retrace around 50% of the previous move. The 50% level currently is around 4,700.

Were this to happen in the coming months you will doubtless read many reports of “The S&P 500 is crashing”. In reality this would only be a fall of around 11% and the long term bullish trends would remain intact, so it would not be a major long-term concern. So

 investors and traders alike need to be aware that a simple relatively minor correction down towards the 4,700 could occur in the coming months, if the Fed for example was to push back hopes of future rate hike cuts.

There are wider concerns on the underlying state of the US economy, there is plenty of anecdotal evidence to suggest that the US consumer is starting to feel the pinch. However the top tier companies in the S&P 500 have so far been largely immune to this effect.

So, unless/until more evidence emerges the extremely strong bullish trend looks set to continue. In order to turn more cautious we would need to see price action drop out of this trend, currently around 5100. As this would be the first warning sign of a more meaningful correction.

As things stand though the short and medium term trends are strong, leading to a positive skew on the index and its constituents, and that on any future weakness a move towards 4,700 would seem to be a natural move.