Tesco raised its profit guidance for fiscal 2025 after price cuts boosted sales volumes in the first half. The U.K.’s biggest grocer has been cutting prices across a range of products in a bid to lure shoppers to its stores. The company reported a first-half underlying profit that came in ahead of market forecasts and said volume growth exceeded its expectations, paving the way for an increase to its profit outlook for the year ending in February 2025. Tesco on Thursday said it expects retail adjusted operating profit - the company’s preferred metric, which strips out exceptional and other one-off items - in fiscal 2025 of around 2.9 billion pounds ($3.85 billion) compared with the previous target of at least 2.8 billion pounds. Analysts expect the group’s adjusted operating profit to be 2.94 billion pounds, according to a company poll of 14 analysts. Retail adjusted operating profit was 1.55 billion pounds in the six months to Aug. 24, rising 10% at constant currency. This beat expectations of 1.53 billion pounds, according to estimates provided by LSEG Refinitiv. Shares rose 3.1% in midday trade in Europe. Since the start of the year, shares have gained more than 25%.

After edging up slightly at the start, the Swiss market slipped and languished in negative territory right through the trading session on Thursday, as worries about geopolitical tensions and some weak euro area economic data rendered the mood bearish. The benchmark SMI ended down 109.77 points or 0.91% at 12,012.32, off the session's nearly 40 points off the day's low of 11,973.06. Sika ended nearly 4% down. Geberit closed lower by about 2.1% and Richemont lost nearly 2%. Roche Holding, Straumann Holding, Kuehne + Nagel, Nestle and Logitech International closed lower by 1.1 to 1.7%. Givaudan, Schindler Ps, Julius Baer, Partners Group, VAT Group, ABB, Swisscom, Swatch Group and Zurich Insurance ended down 0.6 to 1%. Sonova climbed about 3.1%. Sandoz Group ended up 2.05%. SGS closed up 0.55%, while Novartis, SIG Group and Lonza Group edged up marginally. In economic news, Switzerland's consumer price inflation eased unexpectedly in September to the lowest level in more than three years, the Federal Statistical Office reported Thursday. The consumer price index rose 0.8% on a yearly basis in September, slower than the 1.1% rise in August. Meanwhile, economists had expected the inflation to remain stable at 1.1%. On a monthly basis, consumer prices dropped 0.3 percent in September after remaining stagnant in the previous month. The expected fall was 0.1%.

European stocks closed lower on Thursday as rising tensions in the Middle East and uncertainty about China's growth outlook despite the recent stimulus measures weighed on investor sentiment. Weak Euro area private sector data hurt as well. Data compiled by S&P Global showed the euro area private sector shrank for the first time in seven months in September as Germany, France and Italy recorded contractions simultaneously for the first time in 2024 so far. The final HCOB composite output index fell to 49.6 in September from a three-month high of 51.0 in August. The flash score was 48.9. The pan European Stoxx 600 dropped 0.93%. The U.K.'s FTSE 100 edged down 0.1%, Germany's DAX ended down 0.78% and France's CAC 40 tumbled 1.32%. Rolls-Royce Holdings rallied 2.81%. Shell, Scottish Mortgage, JD Sports Fashion, Persimmon, Barratt Developments, HSBC Holdings, Taylor Wimpey, Sainsbury and Vistry Group advanced 1 to 1.8%. In the German market, Continental ended more than 3% down. Infineon and Porsche closed lower by about 2.8% and 2.5%, respectively.

Following the lackluster performance seen during trading on Wednesday, stocks continued to experience choppy trading during Thursday's session. The major averages once again spent the day bouncing back and forth across the unchanged line. The major averages eventually finished the day modestly lower. While the Nasdaq edged down 6.65 points or less than a tenth of a percent to 17,918.48, the S&P 500 slipped 9.60 points or 0.2 percent to 5,699.94 and the narrower Dow fell 184.93 points or 0.4 percent to 42,011.59. The lack of direction on Wall Street came as traders seemed reluctant to make significant moves ahead of the release of the Labor Department's highly anticipated monthly jobs report on Friday. Economists currently expect the report to show employment rose by 140,000 jobs in September after climbing by 142,000 jobs in August, while the unemployment rate is expected to hold at 4.2 percent. Eli Lilly has finally made enough supply of its popular medicine tirzepatide to meet soaring demand, which should help the company widen its share of the booming weight-loss drug market. The Food and Drug Administration said late Wednesday that Lilly had resolved the shortage. It had started in 2022, just months after the drug was introduced with the brand Mounjaro for diabetes. Tirzepatide was approved as Zepbound in late 2023 as a weight-loss treatment. Alcohol heavyweight Constellation Brands booked a $2.25 billion goodwill impairment tied to its wine and spirits business, swinging it to a loss for the summer quarter. The maker of Modelo beers and Robert Mondavi wine said Thursday that the noncash impairment is connected to negative sales trends in the wine and spirits unit.

While the Hong Kong stock exchange resumed its upward trend on Friday, which had been interrupted the previous day, comparatively little is happening elsewhere in the region. The ‘Golden Week’ continues to be celebrated in Shanghai, where trading resumes on Tuesday after a one-week break.

In the bond market, treasuries extended the downward move seen in the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, advanced 6.5 basis points to 3.850 percent.

Goldman Sachs raises Roche to CHF 260 (250)/Sell – Trader
Citi downgrades Nestle to Neutral (Buy)/90 (105) CHF – Trader
Barclays lowers Renault to 47.50 (60) EUR/ Overweight – Trader

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