Major shares in London opened higher on Thursday, albeit modestly, lifted by earnings from energy and consumer companies as investors braced for an expected second consecutive rate hike by the Bank of England.
At 9am, the benchmark FTSE 100 is 0.1% up at 7,590.86, led by Compass (CPG), while BT (BT.A) checked further progress. Mid-caps remain under pressure, the FTSE 250 losing 0.25% at 22,198.16.
UK, households are bracing for a likely 50% rise in their heating bills as Ofgem announces the price cap for the next six months. A figure near £2,000 is being widely forecast.
Around the same time, the Bank of England is expected to raise interest rates for the second month running, the first time that has happened since 2004.
A 0.25% hike to 0.5% is the City’s prediction plus some change in the current quantitative easing programme.
Two-year UK bond yields slid marginally, having been at levels last seen in May 2011, while five-year yields also dipped a little from their highs earlier this week.
This follows a night of earnings in the US that saw a major split in the fortunes of mega tech stocks. Google-owner Alphabet smashed forecasts, as did Apple and Microsoft before it, but Facebook-owner Meta Platforms dived.
Shares in the social media platform tanked 20% overnight as it reported the first reduction in the number of daily users in its history alongside a lower than expected revenue forecast this quarter.
All three major US markets ended higher overnight with the S&P 500’s near1% gain leading the way. The tech-heavy Nasdaq Composite closed 0.5% up while the unweighted Dow Jones ended 0.6% higher.
BT’S SPORTS SPLITS
BT shed 3.5% at 188.6p after the telecoms giant lowered full-year revenue guidance for the year to 31 March 2022. The company also abandoned plans to sell its sports broadcasting arm and instead is setting up a 50/50 joint venture with Eurosport-owner Discovery. BT’s existing major sports broadcast rights include Premier League and Champions League matches.
A warmer reception was given to the fiscal third-quarter update from oil major Shell (RDSA), with the shares rising nearly 2% to 1,968p after the company announced a new share repurchase programme.
The best performing blue-chip this morning, however, is Compass, the contract caterer. Its’ stock jumped almost 8.5% to £17.93 after reporting a continued improvement in trading across all parts of its business.
‘The structural outlook for new business wins and market share growth is compelling,’ said analyst at Liberum. But the broker retained some caution given uncertainties over short-term volume and margin recovery given challenging market conditions, Liberum said in a note.
Gambling software maker Playtech (PTEC) rallied 12% to 655p after TTB Partners sought its release from takeover rules that prevent the shareholder from making a fresh offer for the UK company after the Aristocrat deal collapsed.
Measurement technology firm Renishaw (RSW) saw interim revenue increase 27% to £325.2 million and pre-tax profit almost double to £84.2 million as it recovers from the effects of the pandemic.
The company also unveiled a 16p per share dividend and pointed to further recovery ahead, guiding for adjusted pre-tax profit of between £157 million and £181 million on full year revenue in the range of £650 million to £690 million.
That saw Renishaw shares rally 6.5% on Thursday to £48.94.
ELSEWHERE ON THE MARKETS
The Independent Directors of ads agency M&C Saatchi (SAA) have rejected another takeover approach from AdvancedAdvT (ADVT), the buyout vehicle of IT entrepreneur and M&C non-executive director Vin Murria.
The UK Takeover Panel has agreed to extend the deadline for AdvancedAdvT to 3 March 2022, by when it must either announce a firm intention to make an offer for M&C Saatchi or walk away.
M&C stock rose 3.5% to 183.5p. AdvancedAvdT shares remain suspended.
Virgin Wines (VINO:AIM) plunged 24% to 152p after reporting a ‘material slowdown’ in sales in the second quarter. The company reported half-year revenue flat year-on-year, implying Q2 declines of somewhere between 10% and 15% on Q1 13% growth.
Sausages firm Cranswick (CWK) nudged 1% higher to £37.64 after reporting robust trading through the Christmas period, although the company’s full year expectations remain unchanged.
