FTSE 100 Closes Thursday Up Despite BOE Rate Hikes -2-

1349 GMT - Investors should steer clear of U.K. stocks amid severe risks facing the country's economy, Blackrock Investment Institute says following the Bank of England's 0.5 percentage-point interest-rate rise to 4%. Damage to the U.K.'s real economy from rate increases is only starting to emerge and while U.K. inflation is set to fall, it will remain above the BOE's target in the longer-term as supply shortages prevail, Blackrock says. High job vacancies, low productivity, ageing demographics and falling forecasted net migration suggest real challenges ahead, the fund manager adds. "Equity investors should consider opportunities elsewhere, for now," Blackrock U.K. chief investment strategist Vivek Paul writes. "Emerging markets have a comparatively better backdrop in the near-run as EM rates peak and China re-opens." ([e-mail])

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Banks With Strong Deposit-Taking Franchise to Benefit From BOE Rate Rise

1405 GMT - Banks with a stronger deposit-taking franchise and a truly differentiated offering will likely benefit from further margin expansion after the Bank of England increased the base rate by 50 basis points to 4%, says Jon Causier, partner at global consultancy Simon-Kucher & Partners. Banks with weaker franchises, however, are more likely to pass on the full benefit of the rate increase to depositors, he says. Thursday's rate rise is the latest step of the BOE's campaign to tame inflation and the effect will be felt differently, he says. "Amongst consumers, savers will benefit from an increase in yield, whereas borrowers, especially those on variable rate mortgages will lose out," he says. ([e-mail])

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Superdry Gains After Takeover Speculation

1428 GMT - Superdry shares jump 6% after the fashion brand said founder and chief executive Julian Dunkerton had no plans at present to take it private. Dunkerton noted media speculation about a possible bid, but said there were "no plans to do this at the moment", the company said in a statement. The shares, which have fallen about 16% following a full-year profit warning last week, look cheap and offer significant long-term value, analysts say. "Investors have fallen out of favor with the stock, which is down more than 90% in the past five years," Interactive Investor head of investment Victoria Scholar writes. "Despite enjoying a boost to warm winter clothing demand and a record for jacket sales over Black Friday, investors remain cautious." ([e-mail])

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Dollar Strengthens Against Euro, Pound

0940 ET - Central banks in the US, UK and EU raise interest rates and the dollar seems to benefit from it. The Fed increased by 25 basis points, while its British and European counterparts raised rates by 50 bp. US rates, however, remain higher, offering support for the dollar. Resilience in American labor markets suggest the Fed may need to raise more and keep rates high for longer, although many investors are betting monetary policy will start to ease later this year. The ICE dollar index is flat after giving up early gains. The dollar strenghtens 0.7% against the pound and 0.6% against the euro. ([e-mail]; @ptrevisani)

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02-02-23 1236ET