London open: FTSE nudges up but Frasers tumbles as it cuts profit outlook

(Sharecast News) - London stocks nudged higher in early trade on Thursday as investors mulled political developments in France, with Frasers Group under the cosh after it cut its profit outlook.

At 0900 GMT, the FTSE 100 was up just 0.1% at 8,342.13.

Kathleen Brooks, research director at XTB, said: "France has been plunged into a political crisis, the question now is, will it trigger a crisis for financial markets? Late on Wednesday, the French government lost a no-confidence vote linked to its budget. This was widely expected, and it leaves France rudderless at the same time as its budget deficit has swelled to 6% of GDP.

"In the immediate term, the President will need to appoint a new PM, however, we could be in a situation where any new PM will face the same challenges as Barnier if they try to pass a budget that contains measures to bring down the budget deficit.

"The crisis is ostensibly over the Budget; however, it was precipitated by June's election, which resulted in no clear winner and a fractured parliament. France cannot hold another parliamentary election until next summer, however, Marine Le Pen has made it clear that she is the Kingmaker. After the vote she said that her party will work with the new government to pass a budget. However, that will likely mean far fewer tax hikes and spending cuts, which may not do much to dent the budget deficit."

On the UK macro front, the S&P Global construction PMI for November is due at 0930 GMT.

In equity markets, Shell gushed lower even as it said that it and Equinor were combining their British offshore oil and gas assets to create what they said would be the UK North Sea's biggest independent oil and gas producer.

Frasers Group tumbled as it lowered the upper end of its full-year profit forecasts, citing weaker consumer confidence leading up to and after the government's recent Budget and a tougher trading environment.

The company now expects adjusted pre-tax profit for the 2024/25 fiscal year of £550m to £600m down from prior guidance of £575m to £625m. Interim profits were down 1.5% to £299.1m on the same basis.

DS Smith was in the red as it posted a slide in half-year earnings, hit by "challenging" market conditions, including weaker prices and higher costs. The paper and packaging firm said revenues in the six months to 31 October fell 4% to £3.4bn, while adjusted operating profits slumped 39% to £221m. Like-for-like box volumes grew by 2%, however.

Housebuilder Taylor Wimpey was knocked lower by a downgrade to 'neutral' from 'overweight' at JPMorgan Cazenove.

On the upside, Vistry gained after saying it had agreed to build nearly 950 new homes near London's Olympic Park as part of a 50:50 joint venture with the London Legacy Development Corporation.

Future surged to the top of the FTSE 250 after well-received full-year results, while Wood Group advanced as it secured three "major" agreements with BP to provide engineering and project delivery services for their capital projects worldwide.

Watches of Switzerland was also in the black as it reported a jump in first-half revenue amid solid US demand, but a dip in profit.

Balfour Beatty and AJ Bell rose after a trading update and final results, respectively.

Vodafone was also up after the Competition and Markets Authority cleared the proposed merger between it and Three on the proviso that the companies promise to invest billions to roll out a combined 5G network across the UK.

FTSE 100 - Risers

Whitbread (WTB) 2,921.00p 1.78% Barclays (BARC) 266.55p 1.70% Admiral Group (ADM) 2,665.00p 1.56% CRH (CDI) (CRH) 8,156.00p 1.24% NATWEST GROUP (NWG) 411.10p 1.11% Intertek Group (ITRK) 4,808.00p 1.09% Sage Group (SGE) 1,317.00p 1.00% Centrica (CNA) 129.60p 0.90% Glencore (GLEN) 381.40p 0.85% Diageo (DGE) 2,360.00p 0.79%

FTSE 100 - Fallers

Frasers Group (FRAS) 649.50p -12.35% British Land Company (BLND) 372.80p -3.97% LondonMetric Property (LMP) 188.30p -2.18% Taylor Wimpey (TW.) 127.60p -1.39% Smith (DS) (SMDS) 569.00p -1.39% M&G (MNG) 200.10p -1.38% Melrose Industries (MRO) 579.40p -1.33% Associated British Foods (ABF) 2,274.00p -1.30% Shell (SHEL) 2,505.00p -1.01% Croda International (CRDA) 3,386.00p -0.94%

FTSE 250 - Risers

Future (FUTR) 1,089.00p 11.12% Wood Group (John) (WG.) 70.30p 8.66% Watches of Switzerland Group (WOSG) 536.00p 7.41% PPHE Hotel Group Ltd (PPH) 1,295.00p 6.58% W.A.G Payment Solutions (WPS) 82.40p 3.00% AJ Bell (AJB) 511.00p 2.92% Close Brothers Group (CBG) 228.20p 2.70% Balfour Beatty (BBY) 463.60p 2.48% Just Group (JUST) 159.00p 2.32% Wizz Air Holdings (WIZZ) 1,320.00p 1.93%

FTSE 250 - Fallers

Pets at Home Group (PETS) 230.80p -2.62% PayPoint (PAY) 834.00p -2.46% SDCL Energy Efficiency Income Trust (SEIT) 54.20p -2.34% Energean (ENOG) 998.50p -2.20% Genus (GNS) 1,704.00p -1.96% Harbour Energy (HBR) 256.80p -1.38% Burberry Group (BRBY) 889.40p -1.31% Elementis (ELM) 133.60p -1.18% Johnson Matthey (JMAT) 1,389.00p -1.14% Telecom Plus (TEP) 1,830.00p -1.08%