FTSE 100 Extends Rise After Weak UK PMI Data

FTSE 100 Extends Rise After Weak UK PMI Data

0921 GMT - The FTSE 100 rises 0.8% to 7325.19, extending earlier gains after weak provisional U.K. purchasing managers' data showed a contraction in both manufacturing and services sector activity in August. Home builders lead gainers as the data suggest that U.K. interest rates could soon peak. "High interest rates are starting to have their intended effect of dampening demand and reducing inflationary pressures," CIPS chief economist John Glen says in a press release accompanying the PMI data. Taylor Wimpey rises 2.5% while Barratt Developments gains 1.7%. Utility stocks are broadly higher, with SSE leading gainers, up 2.7%. Next, focus will switch to U.S. central bankers' comments at the Jackson Hole symposium later this week. ([e-mail])

COMPANIES NEWS:

Reckitt Benckiser CFO to Retire; Shannon Eisenhardt Tapped as Replacement

Reckitt Benckiser Group said Chief Financial Officer Jeff Carr will step down on March 31, and that Shannon Eisenhardt will take up the role on Oct. 17.

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Costain 1H Pretax Profit Fell on Higher Costs; Mulls Dividend

Costain Group said that first-half pretax profit fell on the back of higher costs and that it is considering the payment of an interim dividend.

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Bluejay Mining Raises GBP600,000 Through Share Placing

Bluejay Mining said it has raised 600,000 pounds ($763,920) through a private share placing, which will be used on its wholly-owned Hammaslahti project in Finland.

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Angling Direct Sees FY 2024 in Line With Market Views, Buoyed by UK Sales Momentum

Angling Direct expects its fiscal 2024 performance to be in line with market views, driven by continuing U.K. sales momentum and growth in European sales during the first half, it said Wednesday.

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Pebble Beach Systems 1H Pretax Profit Fell on Higher Costs; Backs 2023 Views

Pebble Beach Systems Group said that pretax profit for the first half of 2023 has slightly dropped on the back of increased expenses but added that is in line to meet the board's expectations for the year.

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Tracsis Expects Revenue, Earnings to Rise Amid Growth Across Units

Tracsis said financial results for fiscal 2023 are expected to come in line with its expectations, with revenue and earnings rising on year on strong performance across divisions.

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Wynnstay Appoints Rob Thomas as Finance Director Designate

Wynnstay Group said that it has appointed Rob Thomas as finance director designate with effect from Oct. 2.

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Ithaca Energy Improves Full-Year Cost Guidance, Backs Production Views

Ithaca Energy said has improved its cost guidance for the year while backing its production guidance after pretax profit in the first half-year dropped significantly on the prior-year when profits were boosted by bargain purchases from acquisitions.

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Hitachi-Thales Deal Won't Hurt Competition in Urban Signalling Systems, UK Regulator Says

The U.K.'s competition watchdog said Wednesday that Hitachi Rail's proposed acquisition of Thales's transportation-systems business won't reduce competition in the supply of communications-based train control signalling systems in the U.K.

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Bluebird Merchant Ventures Shares Rise After Catalyse Buys Southern Gold's Stake

Shares of Bluebird Merchant Ventures rose as much as 24% in early trade after the company said Catalyse Capital is buying Southern Gold's 17.8% shareholding in the company.

MARKET TALK:

BOE's Tight Policy May Prove Too Oppressive

0945 GMT - "The risks of overtightening have risen," ING economist James Smith warns after U.K. private-sector output slumped in August amid a sustained cycle of interest-rate increases by the Bank of England. The bank has been laser-focused on bringing down inflation, which remains high on the back of sustained wage growth, but much of the effect of higher rates has yet to be felt, given the heavily fixed nature of the U.K. mortgage market, Smith notes. As such, the economy appears to be fading into stagnation or possible even recession ahead, though it should book modest growth in the current quarter, he says. The data are "unquestionably bad, and will give the BOE pause for thought as it nears the end of its tightening cycle," Smith says. (([e-mail]; @joshualeokirby))

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John Wood's Results Seen as Encouraging

0943 GMT - John Wood Group is showing encouraging early sings of progress, nine months into a three-year turnaround, after posting higher-than-expected revenue growth for the first half, Peel Hunt analysts Alexander Paterson and John Gilbert write in a research note. "We agree with CEO Ken Gilmartin's closing remarks to the results call...and see firm evidence that performance is improving," the analysts say. "Revenue growth was higher than we expected, the pricing environment is improving, as is employee engagement, and voluntary staff turnover across the professional roles has fallen," they add. Peel Hunt lifts its rating on the stock to buy from hold, while keeping its 200 pence price target. ([e-mail])

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BOE's Tight Policy May Prove Too Oppressive

0937 GMT - "The risks of overtightening have risen," ING economist James Smith warns after U.K. private-sector output slumped in August amid a sustained cycle of interest-rate increases by the Bank of England. The bank has been laser-focused on bringing down inflation, which remains high on the back of sustained wage growth, but much of the effect of higher rates has yet to be felt, given the heavily fixed nature of the U.K. mortgage market, Smith notes. As such, the economy appears to be fading into stagnation or possible even recession ahead, though it should book modest growth in the current quarter, he says. The data are "unquestionably bad, and will give the BOE pause for thought as it nears the end of its tightening cycle," Smith says. (([e-mail]; @joshualeokirby))

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BOE May Take Heart From Sliding Demand

0921 GMT - The Bank of England can draw some encouragement from worsening demand in the U.K., a sign that higher interest rates are acting as planned, Capital Economics' chief U.K. economist Paul Dales writes in a note. Activity contracted in August, according to the purchasing managers' index. The weaker activity appears to be helping price inflation ease, an encouraging sign for BOE policymakers, Dales says, though he adds that the bank is still likely to raise rates again next month. "Overall, the dual signs of weaker activity and easing price pressures give us a bit more confidence in our view that interest rates will peak around 5.50%, rather the 6.00% priced into the markets," he says. (([e-mail]; @joshualeokirby))

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Antofagasta's Share Price Looks Capped by Weak Global Copper Demand

0910 GMT - Antofagasta's share price isn't likely to rise in the near term due to weak global demand for copper, Peel Hunt analysts write in a research note. The Chilean copper miner's share price appears to price in $8,500 a metric ton for copper for the long term, limiting potential upside from higher prices, at least for now, the analysts say. "While the long-term thematic for copper may well support such a price, the shares have limited appeal for us at present, since it is priced in already," they say. Peel Hunt keeps a hold rating on the stock, looking for better entry points in the sector, while lowering its price target to 1,400 pence from 1,435 pence. Shares are up 0.1% at 1,421 pence. ([e-mail])

Contact: London NewsPlus, Dow Jones Newswires;

(END) Dow Jones Newswires

08-23-23 0633ET