Q3 Review: FTSE 350 Top Risers & Fallers

Recruiters, bid targets and turnaround stories led the FTSE 350 in the third quarter, while consumer-facing stocks bore the brunt of a sharp rise in borrowing costs.

The FTSE 100 still logged a seventh straight quarterly gain, rising 1.1% over Q3, but its 2% drop in September was its worst month since March as oil held above $100 and bond yields climbed to multi-decade highs.

With the UK 30-year gilt yield touching 6% on Thursday, the pressures behind many of the quarter's biggest fallers show little sign of easing.

Top FTSE 350 Movers in Q3

Three-month performance as of 1 October.

Risers

Fallers

*Baltic Classifieds (BCG) shows a near-99% fall on most screeners over the period, but this reflects its switch from trading in pence to euro cents at the start of September rather than a collapse in value.

Rates and Oil Split the Market

Higher oil prices and rising rate expectations did much of the sorting between winners and losers over the quarter.

Oil above $100 a barrel supported energy majors such as BP and Shell, but it also fed straight into inflation fears and pushed gilt yields to their highest levels since the late 1990s. That hit rate-sensitive and consumer-facing stocks hardest, with leisure, gambling and banking shares among the laggards in September as investors priced in tighter household budgets and higher-for-longer borrowing costs.

Sentiment can still turn quickly on policy news, as housebuilders showed with a late-September rally after the government unveiled a first-time buyer equity-loan scheme ahead of the Budget. In contrast, most of the quarter's biggest risers were driven by company-specific news, which helped them stand apart from the macro pressure.

Recruiters Lead a Cyclical Recovery Bet

Hays and Michael Page roughly doubled over the quarter, a clear sign investors are betting the worst of the hiring downturn is behind them.

Hays set the tone in July when it guided to the top end of expectations for full-year profit as fee declines eased, and its September results showed operating profit up 3% despite an 8% like-for-like drop in net fees. Michael Page has told a similar story, with its gross profit decline narrowing to just 0.2% in the second quarter and roughly half its markets back in growth.

Both stocks were rallying from deeply depressed levels, which helps explain the size of the moves. Both have also given back ground over the past month as yields climbed, with Hays sitting close to 20% below the high it set during the rally.

Bids and Upgrades Fill Out the Leaderboard

Away from recruitment, the top risers were driven by company-specific catalysts rather than a single sector theme.

Pinewood Technologies jumped after a cash takeover approach from private equity firm Ridgeview Partners in late July, adding to the list of UK-listed firms attracting overseas buyers. Victrex, Kainos and CMC Markets all rallied on upgraded guidance, with Victrex hitting a 52-week high in September after lifting its profit forecast on stronger demand across its end markets.

Oxford Nanopore has been the standout over the past week, up around 24% and climbing to a fresh 12-month high after its first-half update showed gross margins widening to 62.2%. New chief executive Francis Van Parys has set a target of revenue above £700m by 2030.

Consumer and Gambling Stocks Feel the Squeeze

The fallers list leans heavily towards companies exposed to UK consumers and tax policy.

Entain and Rank remained under pressure following April's rise in remote gaming duty to 40% and speculation over further increases, with Entain relegated from the FTSE 100 to the FTSE 250 in September. Rank also fell after its annual report flagged closure consultations at three Grosvenor venues and repeated warnings on Machine Games Duty.

Both sold off in a broad retreat for UK consumer and leisure stocks in early September, as oil approached $110 a barrel and gilt yields hit their highest levels since 1998. Thursday's slowdown in house price growth adds to the sense that household budgets are under strain.

Brokers Split as Profit Warnings Bite

Listed trading platforms produced one of the quarter's starkest divergences.

CMC Markets gained around 46% after lifting its net operating income forecast to at least £550m, citing "exponential and exceptional growth" in its business-to-business unit. IG Group moved the other way after half-year results showed operating costs up 30% and a pause in buybacks alongside a $1.1bn deal for US prediction markets platform Underdog, while Plus500 slid after second-quarter customer income fell 29.7% from the previous quarter.

Rentokil was the worst performer after dropping 16% in a single session in July, when it scrapped its 20% North America margin target following slower US pest control growth. GlobalData hit 12-month lows in September after warning that full-year earnings would fall short of market expectations.

What to Watch in Q4

The Budget and November's Bank of England meeting are the key events that could decide whether the quarter's leaders and laggards keep their positions.

A further rise in gilt yields would likely keep pressure on consumer-facing and rate-sensitive stocks, while any easing in oil prices could give them room to recover. Quarterly leaderboards also tend to mix longer-lasting trends with one-off jumps on bids and guidance changes, so the fourth quarter will help separate the two.