MARKET REPORT: Paper and packaging firms crumple on Smurfit slowdown

Shares in Amazon fell for the sixth day in a row as investors worried about a sharp slowdown in activity in the final three months of the year.

The stock closed another 4.82 percent in New York last night, taking losses to 23 percent since last Wednesday.

The defeat wiped out £250bn of the US tech giant’s worth and more than £24bn of founder and top shareholder Jeff Bezos’ fortune.

Amazon shares are now at their lowest level since the first Covid lockdown and the company is revalued at less than $1 trillion (£870 billion). At its peak last year, it was worth nearly double that.

Tech stocks took a hard hit this year as rising inflation, rising interest rates and obscuring prospects for the global economy cast doubt on their skyrocketing valuations.

Amazon’s sell-off accelerated last week when it warned that sales in its crucial final quarter, including Christmas, would be much lower than expected, but still at a whopping £121 billion to £128 billion. It also said profits for the period could fall to zero, from £12bn a year earlier.

When the Federal Reserve raised US interest rates again last night by 0.75 percentage points, the Dow Jones Industrial Average fell 1.55 percent, the S&P 500 fell 2.5% and the Nasdaq fell 3.36 percent.

Back in London, the FTSE 100 fell 0.6 percent or 42.02 points to 7144.14 and the FTSE 250 gained 0.1 percent or 21.85 points to 18217.75.

And stocks in paper and packaging companies took a hit after Smurfit Kappa warned of a slowdown in demand over the summer.

The FTSE 100 company, which makes boxes and packaging for Unilever and Nestle, among others, said volumes were down 3 percent in the three months to the end of September. It blamed inflation, the war in Ukraine and changing consumer demand.

Stock Watch – Allied Minds

Investors in Allied Minds have voted for the group to delist its shares from the London Stock Exchange.

The intellectual property investor, which was once backed by fund manager Neil Woodford, said it would cancel its shares on Nov. 30.

“We believe this is the right move as we want to realize value from the remaining portfolio of investments,” said interim chairman Bruce Failing.

Shares, which floated at 190p in 2014, rose 1.17 percent or 0.1p to 8.65p.

The company offset some of the decline in demand with price increases of up to 3 percent. It was an otherwise solid set of group results with sales up 33 percent to £8.34 billion in the nine months to September, while profits rose 43 percent to £1.54 billion.

Smurfit said profits for the year should be close to £2 billion. But shares fell – with Smurfit Kappa falling 2.3 percent, or 66p, to 2833p, while Mondi fell 1.35 percent, or 20p, to 1459p and DS Smith fell 1.9 percent, or 5.5p, to 286, 40p.

British American Tobacco, the maker of Pall Mall cigarettes, fell 5.51 percent, or 191p, to 3274p after Goldman Sachs downgraded its rating to “neutral” from “buy” and lowered its target price to 3800p from 4050p.

Shares in Metro Bank rose 13.46 percent or 9.80p to 82.60p after it said it returned to profits in September and failed to see borrowers grapple with repayments amid the cost of living.

Weir Group rose 1.79 percent, or 28.50p, to 1620.50p on news that it remained on track to grow its sales and profits for the year. The Glasgow-based engineering firm said its orders are up 19 percent in the three months to September.

Meanwhile, Foxtons, the broker, rose 3.33 per cent, or 1p, to 31p after it launched a share buyback program worth up to £3million.

While the economic turmoil and rising inflation are “challenging” for Morgan Sindall, the construction group said the “large and high-quality workload” meant it was on track to meet expectations. Orders rose 3 percent to £8.8 billion at the end of September.

But shares fell 4.06 percent, or 64p, to 1514p after Peel Hunt lowered the company’s price target to 2200p.

At Hiscox, Lloyd’s of London insurer gained 5.92 percent, or 53.20p, to 951.60p as written premiums from the Re & ILS business crossed the billion dollar mark thanks to favorable market conditions.

For Hiscox as a whole, written premiums increased 6.3 per cent in the nine months to September to £3.2 billion.