FTSE Rises, Pound Lifted by Positive Risk Appetite, BOE Rate Rise Bets

10/26/2021 | 04:32am

Pound Lifted by Positive Risk Appetite, BOE Rate Rise Bets

Positive market sentiment and the prospect of the Bank of England tightening monetary policy are lifting sterling, particularly against the euro, ActivTrades says. Risk appetite is boosted by positive earnings, which tends to support sterling, while the market seems "increasingly convinced" that it's only a matter of time before the BOE raises rates, ActivTrades analyst Ricardo Evangelista says. Meanwhile, the euro falls as the European Central Bank is expected to stick to its loose policy stance and dismiss calls for interest rate rises next year at Thursday's meeting, he says. In this scenario, EUR/GBP could fall further, he says. EUR/GBP drops 0.2% to 0.8421, having reached a 20-month low of 0.8413 earlier, according to FactSet.

Companies News: 

Softcat FY 2021 Pretax Profit Rose; Says Strong Start to FY 2022

Softcat PLC on Tuesday reported a rise in pretax profit for fiscal 2021 and said that its new financial year has started well.


Petrofac 1H Pretax Loss Widened on Lower Revenue, Provision on Bribery Fine

Petrofac Ltd. on Tuesday reported a widened pretax loss for the first half of 2021 as revenue continued to be hit by Covid-19 and as it booked a provision related to the penalty imposed by a U.K. court on bribery offences.


Smartspace Software 1H Pretax Loss Widened on Higher Costs

Smartspace Software PLC reported on Tuesday a widened pretax loss for the first half of fiscal 2022 due to higher costs and said that the continued effects of Covid-19 mean that growth won't be as strong as it had hoped.


Essentra Has Had a Strong 2H Start

Essentra PLC said Tuesday that it has had a robust start to the second half of the year, and that it expects strong revenue growth in its components and filters divisions in the fourth quarter.


Kin & Carta FY 2021 Pretax Loss Narrowed on Higher Revenue

Kin & Carta PLC on Tuesday reported a narrowed pretax loss for fiscal 2021 as revenue increased.


Schroders to Buy River & Mercantile's Solutions Division for GBP230 Mln

Schroders PLC said Tuesday that it will acquire River & Mercantile Group PLC's solutions division.


Sylvania Platinum 1Q Profit Fell on Price Reductions

Sylvania Platinum Ltd. said Tuesday that its profit in the first quarter of fiscal 2022 was lower than in the previous quarter due to a drop in prices and reduced production.


RWS Holdings FY 2021 Adjusted Pretax Profit Seen Beating Market Views

RWS Holdings PLC said Tuesday that its performance for fiscal 2021 was strong, with adjusted pretax profit expected to be ahead of market expectations.


E-Therapeutics 1H Pretax Loss Widened, Revenue Rose

E-Therapeutics PLC said Tuesday that its pretax loss for the first half of fiscal 2022 widened on higher costs, and revenue increased.


Science Group Calls for the Removal of TP Group Chairman

Science Group PLC said Tuesday that it has requisitioned a general meeting to remove TP Group PLC's Chairman Philip Holland after he refused to step down following unsuccessful attempts to engage in dialogue.


Yourgene Health Expects to Swing to Positive 1H Ebitda

Yourgene Health PLC said Tuesday that it expects to report a swing to positive earnings for the first half of fiscal 2022, and that revenue was ahead of previous guidance of at least 15.0 million pounds ($20.6 million).


Heathrow Says Air Traffic Won't Recover Until 2026, Despite Rising Passenger Numbers

London's Heathrow Airport said Tuesday that its pretax loss narrowed for the first nine months of 2021 as passenger numbers rose in the third quarter but it doesn't expect air traffic to fully recover for another five years.


THG Shares Fall Despite Rise in 3Q Revenue, Backing Guidance

Shares in THG PLC fell Tuesday depsite the company reporting that third-quarter revenue grew significantly and reiterating full-year guidance, adding that it has begun the process to appoint a new chair.

Market Talk: 

Hochschild Delivers Solid 3Q Production, Exploration

0933 GMT - Hochschild has released a solid third-quarter update, with silver and gold production directly in line with estimates and full-year guidance reiterated, RBC Capital Markets says. On the negative side, silver-price realizations were light at $22.0 per ounce, the bank says. As for exploration, the flagship Inmaculada mine in Peru is delivering more robust results with notable intercepts on the Juliana veins, RBC says. "Inmaculada drilling continues to drive potential for higher grade and longer life production, something that should drive consensus earnings upgrades through 2022," RBC adds. Shares in Hochschild rise 1.7%.


Sylvania Platinum's Production and Prices Look Ripe for Recovery

0906 GMT - Sylvania Platinum's 1Q production of platinum group metals slipped 3% quarter-on-quarter largely due to the disruption at its Lesedi site, but management is confident in delivering 70,000 metric tons in fiscal 2022, Liberum says. The AIM-listed mining company's forecasts imply a 14% rise in the run rate for the remaining quarters, Liberum says. The fall in quarterly earnings to $13.6 million was largely down to weakness in the PGM basket price, particularly of rhodium. Nevertheless, Liberum remains bullish on the price outlook, assuming the chip-related disruption to automobile output is soon resolved. The brokerage retains a buy rating and a target price of 170.0 pence on the stock. Shares are down 0.5% at 108.5 pence.


Polymetal 3Q Production Was as Expected

0857 GMT - Polymetal's gold-production results for the third quarter were in line with estimates and consensus, RBC Capital Markets analyst Tyler Broda says. Covid remains a risk, but operations continue to function as normal and the change in transport method has reduced delivery times, he says. RBC has an outperform rating on the FTSE 100 precious-metals miner, which operates in Russia and Kazakhstan. "Polymetal remains one of the highest-quality names in our EMEA precious coverage. We think that management's consistent strategy, clear communication and strong capital allocation framework sets the company apart from competitors," Broda says.


Reckitt Benckiser Gains After Upbeat 3Q

0853 GMT - Shares in Reckitt Benckiser rise 5% after the consumer-goods group raised its full-year revenue guidance. The third-quarter update was positive, with the company increasing sales forecasts and maintaining margin guidance despite inflationary pressures and supply-chain issues, AJ Bell says. It also has benefited from the sale of its troubled Chinese infant formula business and wider operational efficiencies. "Health and hygiene sales are also proving stickier than expected as it becomes clear we're going to be living with the virus for longer than some anticipated when successful vaccines were first developed," Bell analyst Russ Mould says.


Reckitt Benckiser's Strong Brands Drive Outperformance

0847 GMT - Reckitt Benckiser's update brings notable hikes in sales forecasts, outperformance in every division and maintained margin guidance, despite the inflationary pressures and supply chain issues, AJ Bell says. The consumer-goods company's strong performance is a testament to the strength of its brands, allowing it to pass price increases to customers and the continuing transformation of the businesses under CEO Laxman Narasimhan, the brokerage says. Reckitt's previously uneven performance has been addressed thanks to the sale of its troubled Chinese infant formula business and operational efficiencies, while sales are proving more sustainable than expected, AJ Bell says. Shares are up 5.6% at 5,777 pence.


Sterling Seen as Vulnerable to Potential UK Fiscal Consolidation

0842 GMT - Sterling could weaken if U.K. Treasury chief Rishi Sunak sets out tighter budget plans on Wednesday, ING says. "The pre-budget leaks have typically involved new spending plans rather than how this is going to be paid for," ING analysts say. "That does perhaps leave GBP a little vulnerable tomorrow should the U.K. Chancellor announce any kind of fiscal consolidation." If sterling avoids a sell-off on Wednesday, it could "enjoy some strength" into Friday when a more "conciliatory tone" on adjustments to the Northern Ireland protocol could be forthcoming, they say. Expectations that the Bank of England will raise interest rates next week could also support sterling, they say. GBP/USD is flat at 1.3770 and EUR/GBP falls 0.1% to 0.8430.


UK Gilt Yields Ease after BOE's Tenreyro Plays Down Rate Rise

0823 GMT - U.K. borrowing costs ease from recent highs after Bank of England rate-setter Silvana Tenreyro Monday suggested the central bank can wait to raise the base rate from a historic low of 0.1% as inflationary pressures are likely to wane. "BOE's Tenreyro [speech] may have helped to put things into perspective," Mizuho analysts say, adding that her remarks on supply constraints and monetary policy didn't give the impression that there's quite the urgency to tighten policy as that which has been priced into sterling rates. The 10-year gilt yield trades last at 1.141%, down from Friday's close of 1.167%, according to Tradeweb.

Contact: London NewsPlus, Dow Jones Newswires; Write to Sarka Halas at sarka.halas@wsj.com

(END) Dow Jones Newswires

10-26-21 0632ET

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