FTSE 100 lower after weak Chinese data, Diageo CEO Sir Ivan Menezes dies, betting industry veterans take 888 stake and Zara-owner Inditex shines

“The FTSE 100 lost some of the momentum it enjoyed off the back of the US debt ceiling deal and jobs numbers, not helped by weak economic data out of China,” says AJ Bell Investment Director Russ Mould.

“It feels like the Chinese post-Covid recovery is falling a bit flat and this has negative implications for global growth. Housebuilders were under pressure after Halifax data showed the first annual fall in house prices in a decade in May.

“While the news shouldn’t be a shock, given the pressures on the property market from soaring mortgage costs and weak consumer sentiment, it nevertheless was still a jolt to see a decline in the market in black and white.”

Diageo

“Sir Ivan Menezes will be remembered for transforming Diageo’s fortunes and making it the powerhouse it is today in the spirit sector. He was greatly admired by the business community and by investors.

“In his 10 years as chief executive, he focused on high-end brands, recognising that consumer tastes were evolving and that people were prepared to pay a premium price for a quality product.

“Six years ago, he struck a deal to pay $1 billion for tequila brand Casamigos, which at the time raised eyebrows due to the price but has since proved to be a resounding success for the business. It showed that Diageo was able to move with the times, while also keeping its legacy brands including Guinness relevant in the modern world.

“Sir Ivan paid a lot of attention to culture within the business, while also making sure Diageo was a leader in the fields of sustainability, inclusivity and diversity.

“A succession plan was already in motion before Sir Ivan became unwell, meaning there is no uncertainty over who will run the business. However, news of his death is a shock and the world of business will be in mourning for one of the most highly respected FTSE 100 leaders.”

888

“Troubled gambling stock 888, owner of the William Hill brand, received an injection of confidence as one-time directors of GVC (now part of Entain), including its former CEO Kenny Alexander, took advantage of a bombed-out share price to pick up a 6.5% stake.

“The shares surged thanks to the implication that, for all its regulatory troubles, industry insiders still see value in the business and its brands.”

Inditex

“The post-pandemic rebound for physical retail continues as Zara-owner Inditex reported better than expected profit and strong spring/summer sales.

“It is understandable that people would rather go to a shop and try on clothes than ordering online and going through the faff of returning the item if the look, feel or sizing is not right.

“While households are watching their pennies, they still need to clothe themselves. Zara is clearly getting the products people want, in the right places and at the right price points, ticking all the boxes of being a good retailer.”

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