FTSE 100 steady as UK wages rise, Anglo American announces strategic shake-up after BHP bid, Vodafone sees growth return in Germany, Greggs battles on despite unfavourable weather and Currys raises guidance

“After the stellar run which took it to all-time highs the FTSE 100 now seems stuck in a holding pattern – awaiting the next catalyst which could either send it higher or lower,” says AJ Bell Investment Director Russ Mould.

“In this context, a near-term interest rate cut in the UK might be moving off the agenda after UK wages marched higher in March.

“Anglo American was on the defensive after rejecting a second bid for BHP – unveiling plans to exit diamond, platinum and coal mining in a bid to revive a listing share price. The plan has been greeted with a shrug by the market and it raises a troubling question for the incumbent management: why has it taken a takeover approach to prompt this radical action if it’s the right strategy for the future?

“There was nothing material to sway the bulls or bears on Vodafone in either direction – although a return to growth in core market Germany, while overdue, is welcome. The company is in a state of limbo while it awaits the conclusion of a probe by the UK competition authorities into its merger with Three.”

Greggs

“There is no major drama with Greggs’ latest trading update – it’s a fairly steady performance, with sales continuing to grow, costs under control, expansion plans ticking along nicely and no change to outlook guidance. However, recent trading hasn’t been as strong as the start of the financial year which explains a slight dip in the share price.

“There is plenty of product innovation and that’s more than enough to sate shoppers’ hunger. It also helps Greggs to put up a good fight against the competition.

“With Domino’s pushing hard on the lunch crowd with new wraps and Marks & Spencer continuing to score highly with shoppers with its food on the go, Greggs needs to find new ways to keep people coming through its doors, otherwise they could easily go elsewhere. So far, its menu development team have worked wonders and there are no signs that Greggs is buckling under the weight of stronger competition.

“Comments that it is operating in a ‘challenging’ market might trouble some investors. The past week may have been nice and sunny but 2024 has generally had some miserable weather and that deters people from venturing to the shops, which in turn lowers the opportunity for Greggs to attract passing trade.

“Beyond hoping for some spectacular weather over the summer which gets people out and about, or pushing its delivery service harder if footfall deteriorates rapidly, there isn’t much that Greggs can do beyond the nuclear option of being more aggressive on pricing. That is a last resort option and we’re certainly nowhere near the point where that becomes a conversation in the boardroom.”

Currys

“Rejecting a takeover bid comes with its own pressure so the fact Currys has upgraded profit guidance in the wake of batting off foreign interest is helpful to management’s credibility. Significantly, the shares are now trading above recent suitor Elliott’s top bid.

“The company is showing real signs of recovery – the recent momentum in its UK and Ireland business now finally being matched by the Nordics which are getting back on track under a new leadership team.

“After benefiting from the pull-forward of spend on TVs, laptops, printers and household appliances engendered by the pandemic, the post-Covid backdrop has been tougher for Currys.

“Persistent inflation and rising rates have put the squeeze on consumers’ discretionary spending, and the Scandinavian business, a previously reliable contributor, going wrong only compounded matters.

“Currys deserves some credit for digging itself out of this hole and is really playing into its role as a provider of accompanying services alongside the sale of consumer electronics. This is logical as many people are not hugely tech savvy and if Currys can make itself a trusted provider of expertise and support it could drive customer loyalty and useful ancillary revenue.

“The company still remains at the whim of consumer demand but with the sale of its Greek operations helping to put it in a net cash position, Currys is well positioned for anything the economy might throw at it.”

These articles are for information purposes only and are not a personal recommendation or advice.