FTSE 100 Falls After Fed Minutes -2-

1028 GMT - Shares in Marshalls drop 2% after the building-material supplier reported lower first-half profit, but said revenue increased. The results matched expectations and the group's 7% increase in like-for-like revenue was consistent with trends in the first four months of the year, indicating trading hadn't discernibly slowed at any point in the first half, Panmure Gordon says. "Crucially, the Marley acquisition is performing well, justifying the investment," Panmure analyst Adrian Kearsey says in a note. "Enhanced levels of disclosure highlight the breadth of the group's end markets and the resilience this brings. Within the mix, firm house-building order books and public-sector spending are offsetting a more subdued domestic landscaping segment." ([e-mail])

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Helios Towers Seems Committed to Rollout Plans

0956 GMT - Helios Towers looks committed to its rollout plans despite the macro backdrop and its strong execution in the first half seems to put it well on track to deliver the guided 1,200-1,700 organic tenancy adds this year, Jefferies's Jerry Dellis and Yi Hsin Yeoh say in a research note. The Africa- and Middle East-focused telecommunications-infrastructure company has confirmed guidance for the full year and it should be able to bring margins back up to the target range in the second half. Jefferies has a buy rating on the stock and raises its target price to 212.00 pence from 209.00 pence. ([e-mail])

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AO World's Longer-Term Earnings Look Set to Top Hopes

0925 GMT - Shares in AO World jump 16% to 47 pence after the U.K. consumer-electronics online retailer sounded optimism about its outlook despite swinging to a pretax loss in the year to March. The company said it was closing its German business, voiced confidence in the prospects of its U.K. operation and said it was focusing on cash and profit generation. Jefferies says the results were consistent with guidance and the brokerage's expectations, but the focus on profit looked set to drive earnings ahead of its previous estimates. "We upgrade our FY24 EBITDA estimate by 34%, our price target from 45p to 65p and our recommendation from hold to buy," Jefferies analyst Andrew Wade says in a note. ([e-mail])

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Rank Set to Book Energy Hit But Has Options Available

0921 GMT - Rank Group is set to take a GBP46 million hit from rising energy costs, but there is some uncertainty surrounding the cost for this year, Shore Capital's Greg Johnson says in a research note. The gambling group has seen an improvement intrading at its London casino estate and the pickup in digital is encouraging, with further significant profit growth seen this year, Johnson says. "Operationally, there remains numerous self-help opportunities, the balance sheet is strong and the valuation heavily depressed," he adds. Shore Capital has a buy rating on the stock. Shares trade down 3% at 85.40 pence. ([e-mail])

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Wynnstay Group Raises Funds for Growth Opportunities

0909 GMT - Wynnstay Group has completed a significantly oversubscribed GBP10.6 million placing, with funds primarily set for redeveloping the Calne feed facility as well as future acquisitions, Shore Capital says. The U.K. supplier of agricultural products and services has highlighted that despite cost inflation and supply chain pressures, it has been experiencing a strong trading backdrop supported by buoyant farmgate prices, Shore analysts Akhil Patel and Clive Black say in a research note. "We note the directors have identified several opportunities to accelerate Wynnstay's growth including having a strong and active pipeline," the investment group says. Shore acts as a broker and nominated adviser to Wynnstay. Shares are down 4.5% at 592.0 pence. ([e-mail])

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Rank Group Faces Regulatory Uncertainty Amid Delayed UK Gambling Reform

0851 GMT - Rank Group continues to suffer from regulatory uncertainty, with the U.K. government having delayed proposals to reform gambling laws four times since 2019 amid a dispute among Conservative party members, interactive investor's Head of Investment Victoria Scholar says in a note. "The U.K.'s regulatory tightening and uncertainty continue to be major headwinds for stocks like Rank Group and 888 alongside the cost-of-living crisis, which leaves individuals and households with less disposable income left over at the end of the month," Scholar says. Shares trade down 3% at 85.40 pence. ([e-mail])

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Gilt Curve Has Room to Flatten, But QT Might Muddy This Call, ING Says

0702 GMT - The U.K. gilt curve has room to flatten further with the peak in inflation still to come and recession fears further on the rise, ING's rates strategists write in a note. Core U.K. inflation might peak soon but ING's economists expect the headline rate to hover around 12% from October, the rates strategists say after annual inflation hit a four-decade high of 10.1% in July. In a market featuring widening bid-offer spreads, the Bank of England intends to embark on active quantitative tightening soon, they say. "It will test market functioning as private investors will effectively have to absorb significantly higher amounts of government debt going forward," the strategists say, adding that this factor muddies their call for a flatter curve. ([e-mail])

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London Stocks Seen Opening Little Changed

0644 GMT - The FTSE 100 index is expected to open up marginally, by 4.8 points, according to IG, as investors remain cautious after Federal Reserve minutes confirmed that U.S. interest rates would need to continue rising to bring down inflation. There was some comfort for investors, however, as some Fed members worried that rate increases could slow the economy more than warranted. The minutes were "more hawkish-than-what-was-needed-to-give-another-boost to the U.S. stock markets," says Swissquote analyst Ipek Ozkardeskaya in a note. Eurozone inflation data will be watched at 0900 GMT, after data Wednesday showing U.K. inflation jumped into double digits. DP World will be in focus after a 1H update. ([e-mail])

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U.K.'s High Inflation Is a Problem for Eurozone Government Bonds

0628 GMT - The U.K.'s four-decade-high 10.1% annual inflation for July caused a repricing of market expectations of interest-rate increases by the Bank of England, and the cross-read for eurozone government bonds is that the market discounts similar upward pressure for coming HICP releases, Commerzbank's strategists say. "10y Bunds [Bund yields] took out the 1% level effortlessly amid a flattening curve, before weakening equities helped Bunds to stabilize later in the session," Commerzbank's rates strategists Hauke Siemssen and Rainer Guntermann write in a note, referring to Wednesday's moves. They add that subdued summer liquidity doesn't help and might remain an obstacle in Thursday's trading as well. The 10-year Bund yield is trading unchanged at 1.088%, according to Tradeweb. ([e-mail])

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(END) Dow Jones Newswires

08-18-22 0747ET