B&M makes strong start to year, Persimmon hastens capital return

London open

The FTSE 100 is expected to open 45 points lower on Thursday, having closed up 0.71% at 7,151.02 on Wednesday.

Stocks to watch

B&M European Value Retail said it made a strong start to the year as it reported first-quarter UK like-for-like sales up by more than a fifth compared with pre-pandemic levels. Revenue at core B&M UK stores open a year or more increased 21.3% to £1.02bn in the 13 weeks to 26 June from two years before. Like-for-like sales fell 4.4% from a year earlier. Group revenue rose 3.1% to £1.19bn at constant currency from a year earlier and B&M said its plans for the year were on track. The FTSE 100 value retailer said it expected like-for-like performance in the UK to stay strong.

Housebuilder Persimmon is accelerating a capital return to shareholders as strong first-half trading generated increased revenue of £1.84bn. The figure for the six months to June 30 compares with £1.19bn last year as the Covid-19 pandemic brought building sites to a halt. Persimmon’s forward order book was £1.82bn, compared with £1.86bn last year and £1.62bn in 2019 before the crisis struck. Shareholders will receive a payout of 110p a share. Persimmon’s original plan was to make two payments in August and December.

Newspaper round-up

Britain’s employers are struggling with the worst staff shortages since the late 1990s, amid the rush to reopen from lockdown and a sharp drop in overseas workers due to Covid and Brexit. Sounding the alarm over the risks to economic recovery from acute labour shortages, the Recruitment and Employment Confederation (REC) and the accountancy firm KPMG said the number of available workers plunged in June at the fastest rate since 1997. - Guardian

Retailers are urging the government to bring forward changes to self-isolation policies planned for August as they warn of rapidly increasing staff shortages related to Covid. Richard Walker, the boss of the Iceland grocery chain, said that staff absences linked to coronavirus were “growing exponentially”. “Within a week or two they’ll be the highest ever,” he wrote on Twitter. “Covid rules end 19 July. Self-isolation rules not eased until 16 August. This will be a shit-show for business.” - Guardian

Hedge funds are keeping their powder dry on Morrisons because they believe the market has overexaggerated the prospect of a knockout swoop from a private equity buyer. Opportunistic investors - which would ordinarily be expected to pile into Britain’s fourth-biggest grocer on hopes of a bidding war after an offer to take it private - are sitting on the sidelines because they think shares have already reached the maximum price buyout funds would be willing to pay. - Telegraph

Boris Johnson has overruled his ministers to order a review into a Chinese-backed takeover of Britain’s biggest microchip factory following an outcry over national security. The Prime Minister told MPs that he has asked the National Security Adviser, Sir Stephen Lovegrove, to assess the £65m sale of Newport Wafer Fab to Nexperia, a Dutch company owned by China’s Wingtech. - Telegraph

The City regulator is abolishing the term “Chinese wall” in its literature and rules as part of plans to foster a more inclusive culture across the finance industry, it has disclosed. The Financial Conduct Authority stopped short of calling the term racist but said that some people found it upsetting or offensive. It plans to gradually remove it from its handbook, the online compendium of rules governing all financial firms. - The Times

US close

Wall Street stocks closed higher on Wednesday, with the S&P 500 closing at a fresh record higher after snapping a seven-day winning streak in the previous session.

At the close, the Dow Jones Industrial Average was up 0.30% at 34,681.79, while the S&P 500 was 0.34% higher at 4,358.13 and the Nasdaq Composite saw out the session 0.01% firmer at 14,665.06

The Dow closed 104.41 points higher on Wednesday, taking a chunk out of the 200-plus point loss recorded in the previous session.

Energy stocks were again in focus on Wednesday after West Texas Intermediate crude briefly hit a six-year high yesterday, while bank shares were in the red after long-term bond yields fell further, with the yield on the benchmark 10-year Treasury note slipping to 1.306%.

Wednesday's primary focus, however, was minutes from the Federal Open Markets Committee's latest meeting in June, at which the central bank held short-term interest rates near zero but also hinted that it would be open to adjusting policy over the coming months. However, while the minutes revealed the Fed had discussed tapering, they also showed the FOMC was in no rush to kick off the process.