Spreadex Market Update

Pound remains in panic-mode, Centrica and Greggs fall following H1 results



The seemingly intentional pursuit of a no-deal Brexit by Boris Johnson’s barely-formed government left sterling reeling on Tuesday.

Despite a pledge to ‘go the extra thousand miles’ to secure a deal, following a meeting with the PM Johnson was accused by Nicola Sturgeon of pursuing a ‘dangerous’ hard line path – one that would result in the UK crashing out of the bloc sans-agreement. With that in mind the pound remained panicked; cable shed half a percent to strike a fresh 27-month low, while against the euro a further 0.4% decline took the currency under €1.093 for the first time in almost 2 years.

Unlike on Monday, when the index was propelled higher not only by sterling’s slide by the M&A-boosted performances of Just Eat and LSE, the FTSE was fairly quiet after the bell. Nevertheless, a 0.1% increase kept it above 7700, a level it last spent any serious amount of time at nearly one year ago.

Elsewhere the euro’s continued gains against the pound appeared to weight on the DAX and CAC, with both of the indices falling 0.3%.

Centrica’s years-long unravelling showed no sign of abating after Tuesday’s interim update. The British Gas-owner tumbled more than 10% after announcing a staggering 60% dividend cut and the retirement of CEO Iain Conn in 2020. That followed an operating loss of £446 million, a colossal swing from the £704 million profit posted this time in 2018.

Failing to find the right recipe to please investors, Greggs fell 6%, despite a vegan sausage roll-driven 58% surge in first half profit and a 10.5% jump in like-for-like sales at company-managed stores. The numbers were perhaps dampened by the reminder that like-for-like growth should ‘normalise’ in the 2nd half of the year, with overall cost inflation set to be at the ‘higher end’ of full year expectations.

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