Market update: China selling impacts FTSE 100, Vistry slides 28%
10:16
A bumpy ride for China stock markets has been followed by heavy selling in Europe amid grim sessions for holders of mining stocks, Prudential and HSBC.
The lack of detail on the pledge of policymakers to support China’s economy caused the Hang Seng index to slide 9% in a sharp reversal of recent gains.
The Shanghai Composite resumed after the Golden Week holiday with an initial 10% jump, only for this to weaken to 4.5% by the close.
The FTSE 100 index fell 1.3% or 107.07 points to 8196.55, with sentiment also impacted by a poor Wall Street handover due to higher-for-longer interest rate expectations.
China-focused stocks dominated the fallers board as miners Rio Tinto and Glencore tumbled 5%, Prudential by 6% or 42.2p to 677.2p and HSBC by 25.5p to 669.7p.
Those losses were eclipsed by building firm Vistry, which tumbled 28% or 358.5p to 914.5p after revealing the understatement of costs in its South region.
The company now expects profits for this year to be around £350 million, which compares with the £435 million forecast by City firm Peel Hunt.
Vistry recently joined the FTSE 100 after switching from traditional house building to working with local authorities to provide affordable housing. Today’s share price slide wipes out almost all the gains seen this year.
One bright spot in the top flight came from Imperial Brands, which jumped 4% or 82p to 2230p after promising greater shareholder payments in 2025.
The total of £2.8 billion is up from £2.4 billion planned for this year and includes dividends of £1.5 billion to be paid in four equal quarterly instalments.
The FTSE 250 index fell 1% or 197.50 points 20,655.71.
Components supplier Senior lost 13% or 19.3p to 127.5p as the biggest faller after it downgraded second half guidance due to supply chain and other issues affecting the aerospace industry.
Supermarket sandwich business Greencore moved the other way, lifting 14.8p to 195p after revealing that full-year operating profits will be above City estimates.
Vistry warning unwinds 2024 share price gains
09:31 , Graeme Evans
Vistry shares have slumped 29% or 365.5p, leaving the partnerships-led housebuilder back near where it started the year at 907p.
The slide by FTSE 100-listed Vistry follows a £115 million hit to profit guidance across three years due to the understatement of costs in its South division.
Vistry now expects profits for this year to be around £350 million, which compares with the £435 million forecast by City firm Peel Hunt.
The group recently joined the FTSE 100 index, having benefited from its switch from traditional house building towards working with local authorities to provide affordable housing.
It sells homes through Bovis Homes, Linden Homes, and Countryside Homes.
Senior shares have fallen 14% in the FTSE 250 after the Airbus and Boeing supplier revealed the impact of headwinds in commercial aerospace.
The maker of components and systems now expects its aerospace performance to be weaker in the second half compared with the opening six months.
While Boeing and Airbus are planning to increase build rates across their key narrow and wide body programmes over the coming years, Senior said the industry is facing “temporary but significant headwinds”.
As well as industrial action and the MAX 737 issues at Boeing, Senior highlighted supply chain challenges at Airbus.
The FTSE 250 company has been told by an Airbus Tier 1 supplier that it intended to significantly reduce scheduled deliveries from Senior in the fourth quarter before returning to normal during the second quarter next year.
Senior added: “The short-term issues described in this trading update are clearly temporary in nature.
“The group's future growth is underpinned by a robust order book and is well positioned in its markets and with its customers to capture further new business.”
FTSE 100 down 1% as miners slump, Vistry shares slide
08:31 , Graeme Evans
The FTSE 100 index is down 1% or 86.06 points to 8217.56 after mining stocks and insurer Prudential were swept lower by China stock market weakness.
Disappointment over the failure of policymakers to announce new stimulus measures caused the Hang Seng index to slide 8% in a reversal of recent gains.
The weak sentiment from the world’s second largest economy left shares in Rio Tinto, Glencore and Anglo American down by more than 4% while Prudential fell 5.5% or 41.4p to 678p.
Partnerships housebuilder posted the biggest FTSE 100 decline, losing a third of its value after a profit warning caused by incorrect cost assumptions. Shares slid 442.5p to 830.5p.
Imperial Brands led the FTSE 100 risers after revealing plans for a more generous round of shareholder payments in 2025. It rose 82p to 2229p, a 3% gain that put it well ahead of Reckitt Benckiser and Marks & Spencer on the risers board.
The FTSE 250 index fell 0.9% or 183.02 points to 20,670.19. Aerospace-focused engineering firm Senior slumped 16% or 23.4p to 123.4p after its latest update revealed the impact of short-term trading issues.
Dividend plan boosts Imperial Brands shares
08:08 , Graeme Evans
Shares in Imperial Brands are 4% higher after it pledged to return £2.8 billion in the 2025 financial year, up from £2.4 billion planned for this year.
The increase by one of the FTSE 100’s leading income stocks includes dividends of £1.5 billion, which will now be distributed as four equal quarterly payments.
For 2024, the tobacco giant has announced an annual dividend of 153.43p a share, representing an increase of 4.5% on the previous financial year.
The company, whose brands include Davidoff, Golden Virginia and Blu, plans to buy back £1.25 billion of its shares in 2025. That’s a 13.6% increase on the 2024 level of £1.1 billion.
The returns were announced as the Bristol-based company confirmed a 2024 performance in line with City expectations. Shares lifted 84p to 2232p.
Water firms told to change culture after missed targets
07:54 , Graeme Evans
Penalties for missed targets by Britain’s water firms will mean the return of £157.6 million through lower customer bills in 2025-26, Ofwat said today.
Its annual Water Company Performance Report showed a 2% cut in pollution incidents in 2020-25, compared with the industry’s pledge to deliver a 30% fall.
There was an increase in pollution incidents for nine of the 11 companies in 2023 and only one company met the performance commitment level.
Ofwat chief executive David Black challenged companies to match record proposed investment with changes in company culture and leadership essential for lasting change
He added: “"This year's performance report is stark evidence that money alone will not bring the sustained improvements that customers rightly expect.
"It is clear that companies need to change and that has to start with addressing issues of culture and leadership. Too often we hear that weather, third parties or external factors are blamed for shortcomings.
"Companies must implement actions now to improve performance, be more dynamic, agile and on the front foot of issues. And not wait until the government or regulators tell them to act.”
Vistry issues profit warning after costs discovery
07:28 , Graeme Evans
FTSE 100 housebuilder Vistry has scaled back profit forecasts after it revealed the discovery of incorrect cost assumptions in its south of England division.
The partnerships-focused builder said that full-life cost projections to complete nine out of the division’s 46 developments, including some large-scale schemes, have been understated by about 10% of the total build costs.
The group, which has more than 300 developments overall, said the estimated one-off impact of adjusting for the revised development cost assumptions reduced 2024 profits expectations by £80 million, by £30 million the following year and £5 million for 2026.
It added: “We believe the issues are confined to the South Division and changes to the management team in the division are underway. We are commencing an independent review to fully ascertain the causes.”
FTSE 100 seen lower amid volatile China trading, Brent Crude below $80
07:05 , Graeme Evans
The FTSE 100 index is set to fall by about 53 points to 8251 after leading US benchmarks last night closed about 1% lower.
The Wall Street slump on expectations of higher-for-longer interest rates was followed by a volatile session for investors in China.
The Shanghai Composite resumed after the Golden Week holiday with an initial 10% jump, only for this to fade to about 3% higher after policymakers failed to outline further stimulus measures.
The Hang Seng index dropped by 7% as Hong Kong shares reversed a big chunk of their recent improvement.
Brent Crude is 1.5% lower after topping $80 a barrel yesterday, while the pound is broadly flat at just below $1.31.
