FTSE 100 Closes Down on Higher UK Rate Outlook

The FTSE 100 Index closed Wednesday down 0.4% to 7356 points--its fourth consecutive day in red terrain--dragged by real estate stocks and the basic-resource sector as investors weight the possibility of interest rates staying higher for longer after core CPI remained unchanged in July, CMC Markets U.K. Chief Market Analyst Michael Hewson says in a note. "Banks are also starting to lose the benefit accorded to them from rising rates as higher rates for longer threatens to squeeze their margins and increase the pressure to pay savers more," he adds. NatWest was the worst performer, with shares closing down 3.1%, followed by property search website Rightmove and Fresnillo, down 2.6% and 2.4%, respectively. Admiral shares outperformed the index, closing up 7.2%, after reporting its 1H earnings.

COMPANIES NEWS:

Admiral Group 1H Pretax Profit Rose as Insurance Revenue Increased

Admiral Group said pretax profit for the first half rose as revenue from insurance increased, and that challenging market conditions were turning.

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Aviva Operating Profit Beats Views

Aviva beat its guidance and analyst expectations as it reported higher operating profit for the first half of 2023 on growth across its divisions and said it expects to exceed its mid-term targets.

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Balfour Beatty's On Track to Meet Views Despite Pretax Profit Slip

Balfour Beatty's first-half pretax profit slipped slightly on year on higher costs and expenses but was on course to meet full-year expectations, it said Wednesday.

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Marshalls Cuts Dividend After Pretax Profit Fell on Costs and Adjusted Items

Marshalls said that pretax profit fell on adjusted items and higher costs and cut its dividend, but that revenue increased and it was well-placed for a market recovery.

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Concurrent Technologies Buys Stryker for GBP2.6 Mln; To Raise Up to GBP6.8 Mln

Concurrent Technologies is buying Phillips Machine & Welding Company, known as Stryker, for 2.6 million pounds ($3.3 million) to be funded via a share placing and retail offer, with the rest of the money being used toward growth opportunities.

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Restore Swung to Pretax Loss; Names Mike Killick as Interim CFO

Restore PLC said it swung to a pretax loss and revenue slipped slightly, though it remains on track to meet revised full-year expectations, and named Mike Killick as interim chief financial officer.

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Glanbia Pretax Profit Rose; Lowers Glanbia Performance Nutrition Revenue Guidance

Glanbia said pretax profit rose for the first half of fiscal 2024 as it booked an exceptional net post-tax gain, and lowered revenue guidance for its Glanbia Performance Nutrition for the year, on Wednesday.

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Gattaca Sees Higher FY 2023 Underlying Profit on Cost Rebalancing

Gattaca expects to report a fall in net fee income for the fiscal year but beat underlying pretax profit expectations due to its cost rebalancing program and exit from low margin contracts.

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Calnex Solutions Expects to Meet Views; Sees Outlook Improving

Calnex Solutions said Wednesday it was confident in meeting fiscal 2024 expectations, engagement levels remain high and there are signs of optimism for its second-half pipeline, as the industry outlook cautiously improves.

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Plus500 to Launch $60 Mln Share Buyback Program

Plus500 will start a new share buyback program, repurchasing up to $60 million of shares once its existing $70 million buyback program completes.

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Rockhopper Exploration Names Simon Thomson as Incoming Nonexecutive Chair

Rockhopper Exploration said it has appointed Simon Thomson as incoming nonexecutive chair, succeeding Keith Lough effective from October 1.

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Aquila Energy Efficiency Starts Portfolio Sale Market Test

Aquila Energy Efficiency Trust has started the process of market testing the sale of its portfolio, the company said Wednesday.

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Tern Shares Fall on Widened Pretax Loss

Shares in Tern fell after the company said its pretax loss widened in the first half on a higher fair value adjustment to investments, and that it is implementing cost-saving measures to save around 40% of central costs by 2024 when compared with 2022.

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Pathfinder Minerals Shares Rise on Advice to Issue Bonus Shares; Chairman Steps Down

Pathfinder Minerals shares rose after it said it has been legally advised to issue bonus preference shares to shareholders following a disposal and after it reshuffled its management.

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Tungsten West CFO Resigns From Role and Board

Tungsten West said Wednesday that Chief Financial Officer Nigel Widdowson has resigned from the role and stepped down as a director of the company with immediate effect.

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Chaarat Gold to Sell Kapan Mine in Armenia

Chaarat Gold Holdings is selling Chaarat Kapan, which owns the Kapan Mine in Armenia, to Gold Mining Company for $55.4 million.

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Essentra Backs Board's Expectations After Swinging to Pretax Profit on Lower Costs

Essentra said it swung to a pretax profit for the first half after booking lower costs, and backed the board's expectations for the year.

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Asda 2Q Sales Rose Supported by Own-Label Products

Asda's sales grew in the second quarter, driven by an increase in sales in its own-branded products category.

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I(x) Net Zero Shares Rise After Sale of Carbon Engineering Stake

i(x) Net Zero shares rose after the group reached a conditional agreement regarding the sale of the outstanding shares in Carbon Engineering to Occidental Petroleum Corporation.

MARKET TALK:

Antofagasta's Share Price Looks at Risk Given Weakening China

1308 GMT - Antofagasta's shares have been the best performing among European miners in RBC Capital Markets' coverage in the year to date, analysts at the bank say. The Chile-focused copper miner is trading just off its 25-year relative highs, however, its premium valuation is at risk given the uncertain Chinese outlook, they say. The company has outperformed the wider sector by 12% in the year to date despite an operationally weaker first half, but a lot of that reflects the market increasingly favoring copper equities over iron ore, RBC says in a note. "We think this puts Antofagasta's relative premium at risk in light of the growing macro challenges facing the Chinese economy," they say. RBC cuts its rating to underperform from sector perform and target price to 1,200 pence from 1,500 pence. ([e-mail])

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Trainline's Long-Term Outlook Seems Positive

1226 GMT - For Trainline further market-share gain opportunities are seen beyond the continuing recovery from the pandemic, Shore Capital analysts Katie Cousins and Greg Johnson say in a note. Its market share should grow through the leveraging of its extensive coverage and increased digital penetration within the U.K. market--where increasingly it is the default booking platform for U.K. rail--as well as through industry liberalization and the increased carrier competition within Europe, the analysts say. "We believe the group has a positive long-term outlook, with our forecasts suggesting robust top-line growth over the medium/long term, with margin accretion coming from economies of scale and strong free-cash flow generation," the analysts say. Shore initiates cover with a buy rating on the stock. ([e-mail])

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Aviva's Shares Seen Driven by Improved Metrics in 2H

1208 GMT - Aviva's delivery of underlying combined operating ratio improvement in general insurance and normalized contractual service margin growth will be key drivers for its shares in the second half, Citi says in a note after the British insurer and asset manager's first-half earnings call with management. On COR, further improvements should help offset prior-year development and weather normalization, analysts James Shuck and Andrew Baker write. CSM is expected to continue to grow over the medium term on newbusiness and interest accretion, and will benefit from management actions such as second-half longevity releases, they add. Shares rise 2.1% at 388 pence. ([e-mail])

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European Stocks Trade Mixed; US Set to Edge Higher

1159 GMT - European stocks trade mixed following downbeat Asia trading and ahead of an expected slightly higher U.S. open. The Stoxx Europe 600 drops 0.1%, the FTSE 100 falls 0.4%, the CAC 40 gains 0.1% and the DAX advances 0.2%. IG futures data show the Dow opening at 34964, versus Tuesday's close of 34946. Major Asia markets fell 1% or more. U.K. headline inflation for July eased versus June, but core inflation stayed the same and services inflation increased. "Whilst the latest headline inflation numbers have finally followed the Bank of England's repeatedly rewritten script, the BOE will have little cause for celebration," AJ Bell analyst Danni Hewson writes, adding that falling energy prices were mainly responsible for the lower headline rate. ([e-mail])

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Marks & Spencer's FY 2024 Profit Could Come Ahead of Market Views

1150 GMT - Marks & Spencer's latest update lifts fiscal 2024 profit estimates despite the need for some caution, Numis analysts say in a note. The U.K. brokerage expects M&S's fiscal 2024 pretax profit to reach GBP630 million, while market consensus is expected to be more conservative towards GBP550 million, they highlight. The British retailer is capitalizing on the opportunity from food inflation, which is supporting top-line trends, they add. Added to that, retail spend is being supported from wage growth, robust employment and mitigable cost/financing pressures, the analysts add. Numis upgrades its rating on the stock to add from hold and price target to 250 pence from 195 pence. ([e-mail])

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Essentra's Medium-Term Targets Execution Offers Outperformance Scope

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08-16-23 1215ET