WH Smith trading in line, Darktrace ends year in line with guidance

London open

The FTSE 100 is expected to open 39 points lower on Wednesday, having closed down 0.2% on Tuesday at 7,437.93.

Stocks to watch

Stationery and books retailer WH Smith said its full-year figures will be in line with expectations as strong trading in at its airport and train station locations offset a weak performance on the high street. Group revenues for the year ended 31 August were up 28% year-on-year, rising 18% on a like-for-like basis. Travel sales were up 42% (+27% LFL) while high street sales fell 1% (+1% LFL).

Cybersecurity specialist Darktrace hit its guidance for full-year revenues and client additions. Over the 12 months ending on 30 June, Darktrace reported a 31% jump in revenues to reach $545.4m, for a nearly 40-fold jump in net profits to $58.96m.

UK wealth manager Ashmore reported a fall in annual profits as assets under management (AuM) declined 13% as customers withdrew their cash amid volatile markets. Pre-tax profit was down 6% to £111.8m, but offset by higher interest earnings as central banks hiked rates to combat inflation while AuM came in at $60bn, with the movement attributable to net outflows of $11.5bn.

Newspaper round-up

The UK air traffic system failure that resulted in more than 2,000 flights being cancelled has been blamed on “an extremely rare set of circumstances”, as the aviation regulator opened an inquiry into the meltdown that caused chaos for passengers. The Civil Aviation Authority announced its own independent review as it submitted an initial report from Nats, the air traffic control services provider, into the incident to the transport secretary, Mark Harper. – Guardian

UK workers’ living standards will flatline next year, leaving them on track to be 4% worse off heading into the next election than they were in 2019, according to a leading thinktank. The Resolution Foundation, which focuses its research on low- to middle-income households, said in a report that “never in living memory have families got so much poorer over the course of a parliament”. – Guardian

North Sea oil production has plunged at its fastest pace in a decade as fears grow over a potential Labour government and Rishi Sunak’s windfall tax deters investment. Crude oil output slumped by 13pc in the first six months of this year compared with the same period in 2022, a report by Offshore Energies UK (OEUK) found. – Telegraph

Ontario Teachers’ Pension Plan has signalled its continued confidence in the UK, snapping up the wealth management group Seven Investment Management for £255 million in cash. Ontario, one of the biggest pension funds in the world with C$250 billion in investments, is buying a majority stake in the business from Caledonia Investments, the listed investment vehicle of the Cayzer family. – The Times

Investors are pulling their money out of property funds at a rate not seen since the chaos of the mini-budget last autumn. A net £121 million was withdrawn from property funds in August, according to data from Calastone, which tracks fund flows. Property funds have suffered outflows in each of the past 13 months, with August’s decline the largest since October last year when the mini-budget unnerved bond markets and sent yields and borrowing costs sharply higher. – The Times

US close

US markets finished with moderate losses on Tuesday, with the S&P 500 pulling back from a one-month high as investors returned to their desks after the Labor Day holiday with a risk-off approach.

Weak economic data from around the world dampened sentiment during the trading session, while a surprise oil production cut by Saudi Arabia and Russia sent crude prices to their highest level this year.

The Dow fell 196 points (-0.6%) to 34,642, the Nasdaq edged 11 points lower (-0.1%) to 14,021, while the S&P 500 declined 19 points (-0.4%) to 4,497, as it pulled back from a one-month high registered on Friday before the long weekend.

The S&P 500 closed Friday's session at 4,516, its highest finish since 7 August, after the all-important non-farm payrolls report raised hopes that the Federal Reserve will hold off from tightening monetary policy any further at its next meeting.

Cementing hopes further on Tuesday were comments from Fed governor Christopher Waller, a well-known hawk, who said the central bank "can proceed carefully" after recent improvements in data. “There is nothing that is saying we need to do anything imminent, anytime soon, so we can just sit there [and] wait for the data,” Waller said.