Daily market update: Genuit, Wickes

Last night’s tech recovery on Wall Street didn’t carry over into Asian markets with AI-related names in the region facing renewed pressure on their share prices.

Strikingly, stock in South Korean data centre builder Elice lost a third of its value on its first day of trading with concerns about the sustainability of AI spend ramping up.

European markets endured a sluggish start against this volatile backdrop, with oil prices ticking back above $110 per barrel, the highest level since May, as tensions around Ukraine and the Middle East continue to escalate.

The mounting concern about the artificial intelligence trade raises the stakes ahead of earnings updates from some of the key participants including SpaceX tonight and Tesla and Meta later this week.

In London, Anglo American topped the FTSE 100 as the company confirmed its merger with Teck Resources is moving closer to fruition as it stuck with 2026 production guidance.

Approval from China’s anti-trust regulator remains the final fence to clear and barring a Devon Loch style scenario it seems the deal will be wrapped up by the targeted March 2027 deadline.

Genuit

Building products outfit Genuit was on the receiving end of some heat from investors as unseasonably warm weather affected its heating business and prompted a profit warning.

Blaming the weather is up there with the dog ate my homework in the pantheon of excuses but Genuit is also having to contend with difficult trading conditions, with a subdued property market hitting demand for repair, maintenance and improvement work.

Additionally, Genuit’s use of polymer, particularly in its water-related products, means it has been particularly exposed to the spike in oil prices this year resulting from conflict in the Middle East.

Having passed on some of this increased cost, management are concentrating on the things within their control as they keep a tight lid on spending and look to streamline the business.

Genuit will look ahead with some hope to drivers linked to regulatory spending in the water sector and UK housing policy in the coming years, but the reaction to today’s update shows the market is running out of patience.

Wickes

A resilient update from home improvement retailer Wickes, suggesting the business is on solid foundations despite a tricky trading environment, was just the job for investors.

The company continues to benefit from its strategy of targeting trade customers. This cohort is a more reliable and consistent source of revenue than ordinary punters. That’s because materials and tools are not a nice-to-have for them but essential to their day job. The trade part of the business is also benefiting from the shift from Do-It-Yourself to Do-It-For-Me.

Some of this growth was down to price inflation but, crucially, Wickes is growing volumes too as it grabs market share from its rivals. This suggests Wickes has got its proposition right as it also makes efforts to revamp its store estate.

Where Wickes is faring less well is on the design and installation side where like-for-like revenue was in reverse. This was down to customers being more reluctant to splash out on bespoke kitchens.

This is no great shock given the pressure on household finances and Wickes will hope this is spending which might return if or when the backdrop improves.