Hipgnosis Song. Share News (SONG)

(Alliance News) - Stock prices in London made little progress on Thursday morning, amid fears for the global economy and despite a slew of local corporate updates.

The FTSE 100 index opened down 2.68 points at 7,486.51. The FTSE 250 was up 8.71 points at 18,939.28, but the AIM All-Share was down 1.67 points, 0.2%, at 832.86.

The Cboe UK 100 was down 0.2% at 749.41, the Cboe UK 250 down 0.1% at 16,362.39, and the Cboe Small Companies down 0.1% at 13,009.33.

In European equities early on Thursday, the CAC 40 in Paris was up 0.1%, while the DAX 40 in Frankfurt was up 0.1%.

"The risk-off sentiment more widely on stock markets this week remains hard to kick into touch as concerns about recession stay front and centre. The evil twins of recession and persistently higher inflation are lurking, keeping investors on edge," said Hargreaves Lansdown's Susannah Streeter.

Trading was tentative ahead of three key central bank decisions next week. The US Federal Reserve will announce its latest interest decision on Wednesday next week, with the Bank of England and European Central Bank to follow on Thursday.

Sterling was quoted at USD1.2189 early Thursday, mostly unchanged from USD1.2194 at the London equities close on Wednesday. The euro traded at USD1.0513 early Thursday, similarly flat from USD1.0506 late Wednesday. Against the yen, the dollar was quoted at JPY136.86, up slightly versus JPY136.56.

In the FTSE 100, DS Smith added 1.9%, as the packaging maker reported a strong half-year ended October 31.

DS Smith said revenue rose 28% to GBP4.30 billion from GBP3.36 billion a year before, lifting pretax profit by 82% to GBP322 million from GBP177 million.

DS Smith said the performance was driven by focusing on its customers' needs during a period of significant economic volatility. "This has enabled us to achieve continued market share gains, an increase in profitability and improvements in our key financial performance ratios," said CEO Miles Roberts.

DS Smith now expects its full-year performance to be ahead of previous expectations, and the second half to be consistent with the first. It announced an interim dividend of 6.0 pence per share, up 25% from 4.8p a year before.

British American Tobacco shed 2.1%, despite a largely upbeat trading update.

The cigarette maker guided for 2022 revenue growth of between 2% and 4% in constant currency for 2022, and mid-single figure adjusted diluted earnings per share growth at constant currency.

It now expects global tobacco industry volume to be around 2% lower in the full year, compared to a previous estimate of a 3% decline, "driven by continued post-Covid recovery in emerging markets". However, US industry volumes in combustibles will reflect "increasing macro-economic pressures" seen in the second half, it said.

BAT said its New Category business is seeing strong growth in volume, revenue and market share, becoming a "significant contributor" to the firm's performance. It remains confident of hitting revenue targets of GBP5 billion and profitability for the business by 2025.

"As the industry recognises the longer term need to lessen the reliance on traditional tobacco, switching towards the fast-growing 'New Category' products area, the signs for BAT are encouraging...For the traditional products which still prop up the business overall, there also remain signs of ongoing resilience. The nature of the products allows for strong pricing power without destabilising demand, and this largely offsets some of the issues the group is facing," commented interactive investor's Richard Hunter.

Sports Direct-owner Frasers Group fell 3.7%.

Frasers said revenue rose 13% to GBP2.64 billion in the six months to October 23, from GBP2.34 billion a year prior, largely due to acquisitions. Excluding acquisitions by the retailer, revenue fell 3.1%, mostly down to a reduction in Game UK and a strong comparator after shops reopened from lockdown in March 2021.

Pretax profit jumped 53% to GBP284.6 million from GBP186.0 million.

Frasers reiterated its guidance for adjusted pretax profit of GBP450 million to GBP500 million in its full year, noting "strong strategic and trading momentum".

"Frasers' warning about the macroeconomic challenges which are creating uncertainty appear to be weighing on the shares today," said ii analyst Victoria Scholar.

In the FTSE 250, Wizz Air added 5.5%, after Bank of America raised the stock to 'buy', while Travis Perkins shed 3.9% after JPMorgan cut the stock to 'underweight' and placed it on 'negative catalyst watch'.

Balfour Beatty rose 2.7%. The construction firm said it expects revenue in 2022 to be around 5% ahead of the GBP8.3 billion booked in 2021, mostly driven by foreign exchange tailwinds. Similarly, it expects its order book to be 5% ahead of GBP16.1 billion at the end of the year.

"It's worth remembering favourable exchange rates are the main driving force which aren't an underlying, or ongoing, growth factor," noted HL analyst Matt Britzman.

Balfour guided for annual profit ahead of market expectations. This is down to positive net interest income and a lower tax charge for the year.

Hipgnosis Songs Funds rose 2.9%, as it reported total revenue of USD91.7 million in the six months to September 30, up 7.5% from USD85.3 million a year before. Its pretax loss widened to USD20.1 million from USD19.2 million. It left its interim dividend of 1.3125p unchanged from the prior year.

The music intellectual property investment and song management company said it expects continued annual growth in the global music market, and will benefit from increasing revenue form social media, gaming and lifestyle channels.

Online greeting card and gifting company Moonpig clawed back 4.0%, having shed 8.9% on Wednesday after disappointing interim results.

On AIM, In The Style jumped 11%, as it launched a strategic review, in light of its low market capitalisation.

This may or may not results in a sale of the company, its businesses, or assets. The fashion retailer said it is not in takeover talks, and has not received any offer or approach.

ITS said its expectations for full-year adjusted earnings before interest, tax, depreciation and amortisation remain unchanged. It noted "uncertain" consumer sentiment, and guided for direct-to-consumer revenue in the second half to be "similar" to that of the first. Wholesale revenue, which plunged 45% in the first half, is likely to continue to be a challenge, ITS said.

In the six months to September, revenue fell 11% to GB26.6 million from GBP29.8 million, and ITS swung to a pretax loss of GBP3.1 million from a profit of GBP890,000.

In addition, CEO Sam Perkins will step down at the end of December, with founder & former CEO Adam Frisby to return to the helm. Frisby previously served as CEO for nine years until January 2022, when he became chief brand officer.

In Asia on Thursday, the Japanese Nikkei 225 index closed down 0.4%. In China, the Shanghai Composite closed down 0.1%, while the Hang Seng index in Hong Kong closed up 3.3%. The S&P/ASX 200 in Sydney closed down 0.8%. 

In the US on Wednesday, Wall Street ended mostly lower, with the Dow Jones Industrial Average marginally higher, the S&P 500 down 0.2%, and the Nasdaq Composite down 0.5%.

Gold was quoted at USD1,783.20 an ounce early Thursday in London, little changed from USD1,783.10 late on Wednesday, while Brent oil fetched USD77.61 a barrel, a touch lower than USD78.00.

Still to come on Thursday's economic calendar, there's the latest consumer price index reading from Ireland at 1100 GMT.

By Elizabeth Winter, senior markets reporter

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