FTSE 100 Closes Up 1.9% on Hopes of Rate-Hike Cycle End

The FTSE 100 index closed Thursday up 1.9% at 7882 points, with just a few stocks in the negative, lifted by miners and the consumer-discretionary sector amid increasing hopes of the end to the rate-hikes cycle, XTB research director Kathleen Brooks says in a note. "Overall, the BOE was more dovish than expected because no MPC members are voting for rate hikes. This is an historic shift at the BOE for this hiking cycle, and suggests that we are moving to a new phase of monetary policy for the BOE and that lower interest rates are coming," she says. 3i Group led the risers, with shares closing up 8.7%, after the international investment manager said it had a strong start of 2024. Next PLC followed the list of outperformers, up 6.7% after the group backed its growth guidance.

COMPANIES NEWS:

Virgin Money UK Agrees to $3.71 Bln Nationwide Building Society Takeover

Virgin Money UK has agreed to a 2.9 billion pound ($3.71 billion) takeover by Nationwide Building Society, creating the second largest provider of mortgages and savings in the U.K.

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Direct Line Swings to Pretax Profit, Boosted by Customer Growth

Direct Line Insurance Group swung to a pretax profit after strong customer growth and an improved performance, but missed market views.

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Next PLC Backs Guidance After Profit Rose

Next PLC's pretax profit rose as expected in fiscal 2024, while it confirmed its expectation of further growth next year.

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Games Workshop Declares Dividend, Says Trading Was In Line

Games Workshop Group said it traded in line with views in its most recent quarter and declared its dividend for fiscal 2024.

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Dowlais Pretax Loss Widens on Higher Costs; Launches Share Buyback

Dowlais Group said its pretax loss widened on higher costs, and that it will launch a share buyback program of up to 50 million pounds ($63.9 million) next month.

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UK Commercial Property Agrees to GBP924M All-Share Takeover by Tritax Big Box

UK Commercial Property REIT has agreed to an all-share takeover by Tritax Big Box REIT that values the company at 924 million pounds ($1.18 billion), as previously flagged.

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National World Revenue Rises But Costs Hit Pretax Profit

National World reported a fall in pretax profit despite revenue rising in line with its expectations as it booked higher costs, and backed its guidance for the year ahead.

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Energean Backs Targets After Jump in Pretax Profit

Energean backed its 2024 targets after booking a tripled pretax profit last year, driven by significantly higher production, as it looks to expand its presence in the Mediterranean.

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Direct Line Launches Cost-Cutting Plan, Business Review -- Update

Direct Line Insurance has set out a plan to cut 100 million pounds ($127.8 million) worth of costs a year by the end of 2025 and launched a strategic review of the business designed to deliver higher returns.

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CAP-XX Shares Soar on Patent-Case Settlement With Tesla

Shares in CAP-XX soared 97% in early trade Thursday after the company said it has signed a settlement deal with Tesla, ending all litigation matters in relation to a patent infringement case.

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Esken to Enter Administration, Shares Suspended

Esken said it would appoint administrators after deciding that its restructuring plan isn't commercially viable, and that its shares have been suspended from trading with immediate effect.

MARKET TALK:

BOE Needs to Signal June or May Rate Cut for Pound to Fall Significantly

1007 GMT - The Bank of England would need to signal that interest rates could be cut as early as June or even May for the pound to fall significantly, says MUFG currency analyst Lee Hardman. Current expectations are that the BOE will most likely cut rates in August. The central bank will announce a decision at 1200 GMT, which could question the prevailing view that the U.S. Federal Reserve and European Central Bank will cut rates before the BOE, given that U.K. inflation and wage growth have slowed since the last BOE meeting, he says. Voting patterns will be scrutinized, with potential for just one rather than two policymakers voting for a hike this month, Hardman says. GBP/USD falls 0.1% to 1.2773. ([e-mail])

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Next PLC's FY 2025 Performance Is Poised to Improve as Inflation Eases

1004 GMT - Next PLC delivered another excellent performance in FY 2024, with sales and profit both progressing against a backdrop of deep economic uncertainty and rising inflation, Wealth Club portfolio manager Charlie Huggins says in a note. The fashion retailer backed its FY 2025 sales and profit growth guidance of 5.9% and 5%, respectively. Given that inflationary pressures are easing and fears of a hard economic landing are receding, the group can look forward to fiscal 2025 with confidence, Huggins adds. "Next's core proposition is clearly resonating with the U.K. consumer and is arguably stronger than ever," he adds. Next shares are up 4.9%, among the FTSE 100 top risers, and up 30% on a 12-month basis. ([e-mail])

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Direct Line's New CEO Approach Will Drive Performance

1002 GMT - Direct Line is now on the comeback trail and dividends are back, AJ Bell Investment Director Russ Mould writes in a research note. The nonlife insurer has been through a challenging period due to rising inflation pushing up costs and unfavourable weather causing a surge in claims, which cost its position to the former CEO, Mould says. However, new CEO Adam Winslow is taking the right approach to drive performance and will put the company back on top, Mould says. "He's being open and honest that the company needs to do more to drive performance." Shares are up 0.95% at 213.50 pence. ([e-mail])

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Centamin's Dividend Slightly Lags Expectations

0951 GMT - Centamin's full-year results were broadly in line with estimates, but the final dividend slightly disappointed, RBC Capital Markets analyst Marina Calero says in a research note. The gold miner's earnings-per-share also missed expectations, but this was due to non-cash items, Calero says. "Dividends were weaker than our forecasts and consensus [...]although we note this came in excess of the company's policy establishing a 35% minimum dividend." Shares are up 4.7% at 111.00 pence. ([e-mail])

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Virgin Money UK's Unsweetened Takeover Deal Shows Little Faith in Strategy

0927 GMT - Virgin Money UK received an unimproved final takeover offer from Nationwide Building Society Shore Capital, analyst Gary Greenwood writes in a market comment after the companies said they agreed on a GBP2.9 billion deal. At 220 pence per share, the transaction values the financial-services group lower than its last reported tangible net asset value per share of 337 pence, he notes. "By accepting such a low valuation multiple, we think the board of VMUK must have had little faith in its management team to execute on its strategic plan and ultimately deliver a double digit return on equity and so a higher rating," he says. Shares trade 2.4% higher at 212.7 pence. ([e-mail])

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Gilt Yields Fall Ahead of BOE's Policy Decision

0918 GMT - U.K. gilt yields decline ahead of the Bank of England policy decision at 1200 GMT and following Wednesday's U.S. Federal Reserve interest-rate announcement as investors increasingly expect central banks to start cutting rates sooner than previously priced in. Short-dated gilt yields are likely to fall faster than long-dated gilt yields as U.K. inflation continues to decelerate, making room for the BOE to start rate cuts, Mizuho rates strategist Evelyne Gomez-Liechti says in a note after U.K. data on Wednesday showed a bigger-than-expected fall in inflation. The 10-year gilt yield falls below 4.0%, last at 3.969%, while the 2-year gilt yield falls 7 basis points to 4.163%, Tradeweb data show. ([e-mail])

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Dowlais Positioned to Outgrow Underlying Auto Markets, Expand Operating Margins

0916 GMT - Dowlais's 2023 results and outlook against a flat wider auto market were solid, while the specialist engineering group surprised with the announcement of a GBP50 million share buyback, RBC analyst Mark Fielding says in a note. The company expects largely flat revenue this year in light of slight declines forecast for the auto markets and further expansion in operating margins, which is supportive of analysts' GBP390 million Ebita forecast, Fielding says. The company looks to be a net winner in the electric-vehicle transition and is positioned to outgrow underlying auto markets and expand operating margins as it benefits from a dominant position in sideshafts, a component used in a vehicle drivetrains. Fielding says. Shares are down 3.3% at 87 pence. ([e-mail])

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M&G's Solid Beat Lifts Shares to More Than Two-Year Highs

0911 GMT - M&G's results were supported by higher rates and exceeded market expectations, RBC Capital Markets says in a note after the savings-and-investments business's 2023 print. The higher rate environment--leading to increased returns and higher treasury income--contributed to better-than-expected results, analyst Mandeep Jagpal writes. Operating capital generation also benefited from a one-off capital reduction in asset management, he adds. Despite strong capital generation, the dividend was broadly flat while the market expected around 2% growth, the analyst adds. Shares in London rise 3.6% to 240 pence, their highest price since mid-2021. ([e-mail])

Contact: London NewsPlus, Dow Jones Newswires; Dow Jones Newswires; [e-mail]

(END) Dow Jones Newswires

03-21-24 1310ET