Must read: FTSE 100, Hang Seng, Frasers Group, Balfour Beatty, Purplebricks

Our head of investment rounds up today's big news in the UK and overseas.

GLOBAL MARKETS 

European markets opened mixed but have since turned lower with the FTSE 100 underperforming as the market finds itself in wait-and-see mode ahead of the Fed and the Bank of England’s crucial rate decisions next week. Prudential is trading near the top of the UK index thanks to optimism towards China’s relaxation of its zero-tolerance to covid approach, which could unleash demand from the world’s second largest economy. 

Shares in Hong Kong rose sharply, defying broader weakness across Asia amid reports the city could relax its pandemic restrictions further. The Hang Seng Tech Index outperformed overnight amid risk-on sentiment driving investors back to growth stocks.

FRASERS GROUP 

Frasers Group (LSE:FRAS) reported first half adjusted profit before tax of £267.1 million up from £192.4 million year-on-year. Revenue increased to £2.63 billion up from £2.34 billion last year. Despite warning about the challenging macroeconomic environment, the retailer kept its full-year guidance unchanged. 

Over the summer, Frasers reported record-breaking full-year results sending shares soaring thanks to the reopening of its stores post-pandemic and the release of pent-up demand. 

Although Frasers Group’s shares had a difficult first half of the year, since mid-October when investor risk appetite returned, shares have staged an impressive surge of almost 50% off the intraday lows. The well-documented pressures on the consumer with the cost-of-living crisis squeezing household budgets appear to be dividing the retail sector into either winners or losers with the owner of Sports Direct managing to land itself a position in the winning category thanks to its intelligent strategy to create key partnerships with strong brands.

However Frasers’ warning about the macroeconomic challenges which are creating uncertainty appear to be weighing on the shares today.

BALFOUR BEATTY 

Balfour Beatty (LSE:BBY) said it expects full-year revenue to be about 5% ahead of the previous year, while its order book is also expected to come in 5% ahead of last year. The infrastructure firm said it intends to buy back further shares ahead of confirming its full 2023 buyback programme in March. 

Amid the market turmoil and macroeconomic headwinds, Balfour Beatty has proven itself to be a stock market winner this year, defying the doom and gloom to stage a rally of over 25% year-to-date. Its share price took a hit in the first quarter on the back of the geopolitical uncertainty driven by Putin’s invasion of Ukraine, but since the March trough, shares have been enjoying an impressive uptrend. Balfour Beatty has benefited from a weaker pound, positive net interest income thanks to the rising rate environment and smaller tax charges. It has also won a number of key contracts in the UK, the US and in Hong Kong.

PURPLEBRICKS 

Shares in Purplebricks Group (LSE:PURP) are trading higher after reiterating its full-year revenue and EBITDA guidance despite six-month operating losses widening to £11.7 million versus £11.1 million year-on-year. The CEO Helena Marston said financial benefits were coming through with its turnaround plan ‘being delivered at pace.’ 

Expectations were low for the online estate agent heading into these earnings, given the market turmoil from the mini-budget with the surge in mortgage rates coupled with the housing market slowdown. Investors are reassured that Purplebricks has managed to stick to its full-year outlook, forecasting that the fruits of its turnaround would materialise in the second half. It has been proactively navigating the macroeconomic strain through efficiencies by trimming its cost base. However 2022 has still be a struggle for investors with the stock down more than 55% even after today’s slight rebound. Shares have continued to push lower over the last two months despite the wider pick-up for markets.