FTSE 100 Closes Higher As UK Economy “Runs Hot”

The FTSE 100 closed higher on Wednesday, with healthcare technology giant Renishaw PLC topping the list and Associated British Foods PLC topping the list. “The FTSE outperforms its European competitors on the back of financials as the UK economy is hot,” said Sophie Griffiths, market analyst at OANDA.

 
Companies News: 

Best of the best stocks plummet as customer engagement declines – update

Best of the Best PLC’s shares fell on Wednesday after the company warned of a decline in customer loyalty amid easing restrictions in the UK

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Origin Enterprises sees adjusted earnings per share spike in fiscal 2021 despite lower revenue in the third quarter

Origin Enterprises PLC announced on Wednesday that it expects adjusted diluted earnings per share for fiscal 2021 after a decent third quarter given the inclement weather.

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Severfield FY 2021 pre-tax profit decreased

Severfield PLC announced on Wednesday that FY 2021 pre-tax profit has decreased after posting higher costs and that its high quality UK and Europe order book supports continued growth throughout FY 2022 and beyond.

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Castings FY 2021 profit, sales decreased due to Covid-19 disruptions

Castings PLC announced on Wednesday that profit and pre-tax sales had declined in fiscal year 2021 as the coronavirus pandemic caused disruption but is now back to full production.

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Renold shares fall due to accounting delay in fiscal 2021; Trade in line with views

Renold PLC shares fell as much as 12% on Wednesday after the company announced that its fiscal 2021 results will be delayed as auditors finalize the audit process.

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Oilex appoints Roland Wessel as CEO

Oilex Ltd. announced on Wednesday that Roland Wessel has been appointed Chief Executive Officer effective June 16 and that Managing Director and Interim Chairman Joe Salomon will assume the position of Executive Chairman for a transitional period.

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Political summits signal an international focus on ransomware

The attention of world leaders to ransomware in a series of high-level meetings shows how quickly destructive cyberattacks have risen to the political agenda as a number of recent attacks have destroyed businesses and critical infrastructures in the US and elsewhere.

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UK regulator accepts commitment to acquire Asda

The UK competition and market regulator told Wednedsay it has accepted commitments from Issa Brothers and TDR Capital LLP to acquire UK grocer Asda Group.

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PureTech Health buys remaining stake in Alivio Therapeutics

PureTech Health PLC announced on Wednesday that it has acquired the remaining 22% stake in Alivio Therapeutics Inc., which it founded, to leverage its strengths in immunology and related technologies to treat potentially inflammatory diseases.

 
Market Talk: 

Electra Private Equity is expected to capitalize on assets prior to its IPO

1249 GMT – Electra Private Equity should benefit from the structural changes made to TGI Fridays that have resulted in an encouraging start to proforma trading, Liberum says. The U.S. restaurant chain – which accounts for 87% of Electra’s remaining assets – plans to add five more stores per year that can be self-financing from cash generation, Liberum says. The investment group is expected to use a significant portion of its roughly £ 28 million cash balance to ensure that TGI Fridays and shoe brand Hotter Shoes are well capitalized ahead of their upcoming IPOs, the broker says. The company will likely pay off some of TGI Fridays’ debt before the split occurs later in the year, the broker says.

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Higher UK inflation is expected to fuel Hawkish Policy Talk

1246 GMT – Rising UK consumer prices could spark a more meaningful discussion about tightening monetary policy, says Bank of America. While investors might be tempted to expect the Bank of England to follow other central banks and see through inflation news, the US bank warns that the BOE has much more restrictive guidance and is “more reactive than other central banks.” Economist Robert Wood says. “In our opinion, higher inflation will lead to more aggressive speech.” BofA has raised its inflation forecast for the consumer price index in 2021 by 4 basis points to 1.8% and core inflation by 10 basis points to 1.6%.

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Chance of increasing BOE rates in the 3rd quarter 22

1207 GMT – The likelihood of a rate hike in the third quarter of 2022 has increased despite lower market inflation expectations, says Oliver Blackbourn, multi-asset portfolio manager at Janus Henderson Investors. Wednesday’s release of inflation data, showing consumer prices up 2.1% in May, has given sterling some boost so far, but 10-year gilt yields have fallen, he says. Similarly, global concerns about the sustainability of price pressures seem to have subsided recently despite the spikes in realized inflation, resulting in slightly lower longer-term break-even rates, a measure of market-based inflation expectations, he says. “Accompanied by a general decline in real bond yields, this has resulted in lower nominal government bond yields in many developed countries.”

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Extension of the lockdown in Great Britain should offset the risk of inflation

1137 GMT – An expansion of current UK social restrictions suggests risks to the economy are more balanced ahead of next week’s Bank of England meeting, Societe Generale says. “GDP is likely to grow by around 5% in the second quarter and inflation to reach 1.8%, both slightly above the bank’s latest projections, and unemployment continues to fall while the Monetary Policy Committee had predicted a slight increase,” he says. However, a four-week delay in lifting the remaining lockdown restrictions signals that “the risks are not all on one side,” says economist Brian Hilliard. “The MPC is far from ready to tighten policy, but we expect Andy Haldane … to vote again to reduce target wealth,” he says.

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The surge in inflation in the UK could scare investors despite BOE assurances

1133 GMT – The sharp spike in inflation in the UK was inevitable as the government released the country’s economy from the shackles of lockdown, says eToro’s Ben Laidler. Rising inflation will scare some investors who see rising prices as a sign that a rate hike is approaching, says Laidler. It seems we haven’t gotten to that point, however, as the Bank of England has consistently stated that it regards the recent inflation buying as temporary, or, in other words, temporary, he says. “Wages will grow more slowly than prices and so this will act as a natural containment of inflation in the coming months,” says Laidler.

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Temporary rise in inflation shifts the focus of the ECB to negotiated wage increases

1124 GMT – The European Central Bank sees the rise in inflation in 2021 as entirely temporary; Hence, it is not the most relevant factor where inflation will peak, says Marchel Alexandrovich, senior European economist at Jefferies, in a webinar. “The ECB, but also the BOE, will monitor how big the negotiated wage increase is,” he says. “It is less relevant where inflation peaks,” he says.

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The continued recovery of the Christie Group should result in outperformance

1123 GMT – Professional services provider Christie Group’s update entering the second half is on a positive note and investors should expect further outperformance in its share price, Shore Capital says. “We are pleased that the recovery, which was first seen in the second half of 2020, has continued with the expectation that if the current momentum of a strong second half of the year is maintained,” said the investment group. Shore predicts that Christie will return to operating profit of £ 3.5million in FY 2021 and £ 4.6million in FY 2022, and says the update adds to the view that Christie is moving from a lighter, more flexible one Can work from a cost base without reducing capacities or capacities. Shares are up 4.8% to 119.5 pence.

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Rising inflation is not just a US phenomenon as inflation is rising in the UK

1122 GMT – The UK’s annual inflation rate surpassing the Bank of England’s 2% target shows the specter of rising inflation is not just a US phenomenon, says Pete Drewienkiewicz of Redington Ltd. The UK is at an earlier stage in the cycle after hitting the pause button for economic reopening earlier this week, says Drewienkiewicz. “We are seeing a similar dynamic with a high number of vacancies, which increases the chances that wage inflation will pick up in the coming months and place increasing pressure on the BOE to act,” says Drewienkiewicz.

Contact: London NewsPlus, Dow Jones Newswires; + 44-20-7842-931

(END) Dow Jones Newswires

Jun 16, 2021 12:06 PM ET (4:06 PM GMT)

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