Must read: stocks start lower, China data, Topps Tiles
5th July 2023 08:40
by Victoria Scholar from interactive investor
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Our head of investment rounds up the morning's big news.
GLOBAL MARKETS
European markets have opened lower, with just a handful of stocks on the FTSE 100 in the green as risk-off sentiment grips global markets after disappointing data from the Far East.
China's Caixin services PMI fell to 53.9 in June versus 57.1 in May to touch the lowest level since January, underscoring the bumpy recovery out of the pandemic. This has been weighing on Chinese stock markets overnight, with Hang Seng down over 1.5%.
US futures point to a weaker open on Wall Street later as trade resumes after the 4th July holiday. Focus will be on the FOMC’s minutes for clues around when the Federal Reserve will hike interest rates again.
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TOPPS TILES
Topps Tiles (LSE:TPT) reported third quarter sales growth of 4.4%, with like-for-like sales up 2.5% year-on-year. It expects first half adjusted profit before tax to be materially higher than the first half and kept its full-year outlook unchanged.
Topps Tiles was a Covid stay-at-home stock market winner thanks to the boom in DIY and home refurbishments while restaurants, bars and travel were out of reach. However, shares struggled during the economic reopening period and after the onset of war in Ukraine when cost inflation began to ramp up, putting pressure on margins and demand.
As the headwinds in the supply chain, inflation and recruitment start to ease, however, and shipping and energy costs came down, Topps Tiles has enjoyed some support once again, allowing the retailer to confirm its annual profit expectations.
Topps Tiles is aiming to account for £1 in every £5 spend on tiles and similar products in the UK by 2025, and hopes to achieve a market share of 20% from 17% pre-Covid in 2019 and 19% in October. In May, the company said it is on track to reach 20% ahead of schedule.
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