Market snapshot: FTSE 100 winners, losers and latest results 

The sinister developments over the weekend have unsurprisingly had a debilitating effect on many asset classes, not least of which is uncertainty around the escalation and duration of the conflict.

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At the eye of the storm was the potentially inflationary spike of the oil price at a time when central banks are still hoping that any further price rises could be contained. The oil price jumped by almost 9% overnight, despite the announcement that OPEC would be increasing production, although attacks on ships in the Strait of Hormuz have kept tensions high.

The gold price inevitably resumed its onward march to fresh record levels as a haven for investors, while more broadly Asian markets and Dow Jones futures were weaker as news of the situation continues to develop.

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Despite oil, defence, utilities and mining stocks providing a strong prop, among them BP (LSE:BP.), Shell (LSE:SHEL), BAE Systems (LSE:BA.), Fresnillo (LSE:FRES) and SSE (LSE:SSE), the FTSE100 was hit by a stronger wave of investor pessimism. 

Travel stocks understandably bore the brunt, with an initially vertiginous fall of up to 11% for International Consolidated Airlines Group SA (LSE:IAG) and a near 5% drop for easyJet (LSE:EZJ), all but cementing the impending relegation of the latter at this week’s index reshuffle. Worried investors also sold hotelier InterContinental Hotels Group (LSE:IHG). 

Banks including Barclays (LSE:BARC), HSBC Holdings (LSE:HSBA) and Standard Chartered (LSE:STAN) were also weaker as investors retrenched, although with the initial decline relatively contained for the moment, the FTSE100 remains ahead by 9% so far this year with some of its stronger sectors continuing to provide a defence.

Bunzl FY

The savage share price reaction to Bunzl (LSE:BNZL)'s profit warning last year left a sour taste in the mouth for investors. A subsequent trading statement and then half-year numbers in August steadied the ship to the extent that the decline was stemmed. At that time, the resumption of the £200 million share buyback programme and a slower rate of decline in the operating profit margin perhaps signalled that the worst may be over.

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However, much of the damage had already been done. The group’s largest market is North America, accounting for 53% of overall revenues, and was the region at the eye of the storm. A combination of sales weakness, product price deflation and costs following the rollout of its own branded offering, led to investors heading for the exit. In addition, questions were raised about the bolt-on acquisition policy which has served the group well over a number of years. Indeed, during the year a further eight were made for a consideration of £132 million.

Annual revenues grew by just 0.6% for the year to £11.85 billion and by 3% at constant exchange rates, although the majority of that growth was driven by acquisitions. Adjusted operating profit of £910.3 million was 6.7% lower, although ahead of the expected £780 million. The group remains committed to its acquisitive policy, with the pipeline remaining active for the coming year, although revenue growth is forecast to be moderate and operating margin to decline slightly, having already fallen to 7.7% from a previous 8.3% this year.

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For the most part, Bunzl remains a well-run if not currently well-regarded stock. However, the outlook provides little for the bulls to feed on, and the initial share price reaction was understandably lukewarm. This adds to a 34% fall over the last year which represents a yawning underperformance compared to the 24% gain of the wider FTSE100, although ironically the decline has left Bunzl looking undervalued on a historic basis. 

However, that the market consensus should be confined to a hold also reflects investors’ reticence to become involved until such time as a sustained recovery is in evidence, which seems most unlikely in the immediate future.