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FTSE 100 Closes Down 0.27% on Inflation Worries, Profit-Taking

17/08/2022 5:45pm

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The FTSE 100 closed down 0.27% Wednesday, as gains were trimmed in stocks due to renewed inflation concerns. After rises in the last few sessions, the market saw a bout of profit-taking creep back in, although relatively orderly so far, IG Group PLC chief market analyst Chris Beauchamp says. "The U.K.'s CPI reading and ongoing concerns about Europe's seemingly-inevitable winter energy crunch have been behind the risk-off move, with investors tempering their optimism about the next few months as they fret about recessions in both the U.K. and the rest of Europe," Mr. Beauchamp says.

 
Companies News: 

GSK Says Plaintiff to Drop Zantac Case

GSK PLC said late Tuesday that the plaintiff's counsel in the first of the U.S. lawsuits over discontinued heartburn drug Zantac plans to file a notice of voluntary dismissal.

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ASOS CFO to Step Down as Company Restructures Executive Team

ASOS PLC said Wednesday that Chief Operating Officer and Chief Financial Officer Mat Dunn has agreed to step down as the company looks to restructure its executive team.

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Boohoo Group Buys 7.1% of Revolution Beauty Shares

Boohoo Group PLC said Wednesday that it has bought 22.1 million shares in Revolution Beauty Group PLC, or 7.1% of its issued share capital, and plans to be a long-term supportive partner.

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Persimmon 1H Pretax Profit Fell; Backs 2022 Legal-Completions Target

Persimmon PLC said Wednesday that pretax profit and revenue fell in the first half of 2022, and that it anticipates delivery volume to increase in the second half as the company rebuilds its outlet position.

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Glanbia 1H Pretax Profit Rose on Favorable Pricing, Higher Volumes; Updates Guidance

Glanbia PLC said Wednesday that its pretax profit for the first half of fiscal 2023 rose on favorable pricing and an increase in volumes, and updated its guidance for the year.

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Plus500 1H Pretax Profit Rose; Launches $60.2 Mln Share Buyback Program

Plus500 Ltd. said Wednesday that pretax profit for the first six months of 2022 rose, adding that it has launched a share buyback program and updated its shareholders return policy.

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Predator Oil & Gas to Raise GBP3.3 Mln to Fund Drilling

Predator Oil & Gas Holdings PLC said Wednesday that it is raising 3.3 million pounds ($4 million) via a share placing and will use the money toward drilling.

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Cineworld Anticipates Significant Share Dilution After Weak Admissions

Cineworld Group PLC said Wednesday that it is in funding talks that will likely result in a significant dilution for existing shareholders, as recent admissions have been below expectations.

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Gem Diamonds 1H Revenue Fell From Previous Six Months

Gem Diamonds Ltd. said Wednesday that revenue fell in the first half of 2022 from the second half of 2021, and that strong demand and robust prices are driving a continued positive sentiment in the sector.

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Balfour Beatty 1H Pretax Profit Rose as Costs Fell

Balfour Beatty PLC said Wednesday that pretax profit for the first half of fiscal 2023 rose on lower costs, and that for the full 2022 calendar year, its UK construction division looks set to deliver industry-standard margins in the 2% to 3% range.

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Gooch & Housego Lowers Profit Views on Ramp-Up Delay, CEO to Retire; Shares Fall

Gooch & Housego PLC shares fell on Wednesday after the company downgraded its profit views for fiscal 2023 as its capacity to ramp up production to meet a robust order book is taking longer than expected, and said that its chief executive officer will step down.

 
Market Talk: 

Cineworld to Look to Debt or Equity to Boost Liquidity

0858 GMT - Cineworld Group is evaluating options to increase liquidity and restructure its balance sheet through but how isn't currently clear, Peel Hunt analysts say in a research note. "It is not clear whether Cineworld will be able to raise fresh debt or issue fresh equity but, in either case, it appears that the value of the existing equity will be further diluted," they say. Peel Hunt has a hold rating on the stock and cuts the target price to 20 pence from 32 pence. Shares trade down 43% at 11.81 pence. (kyle.morris@dowjones.com)

Persimmon Could Soon Feel Cost-Of-Living Pressures

0855 GMT - Persimmon's margins may be insulated from rising costs by increased house prices but shortages of skilled labor and materials are pressuring volumes, AJ Bell says. The U.K. house builder is confident about a second-half volume recovery but it is easy to understand why the market is being cautious, AJ Bell financial analyst Danni Hewson says. "Now it looks like they could be overtaken by inflationary pressures amid the first signs [that] mounting mortgage costs and cost-of-living pressures are finally having some impact on house prices," the brokerage says. The appetite for change has driven a buoyant housing market but there is a limit, and as financial pressure grows, people will find it harder to afford moving house, Hewson says. Shares are down 1.6% at 1,820 pence. (joseph.hoppe@wsj.com)

UK Inflation Heads Above 10%, Peak Has Yet to Come

0845 GMT - U.K. inflation has gone above 10% for the first time since 1980 and a large part of the increase can be traced back to a huge 2.2% month-on-month increase in food prices and a sizable increase in various housing costs, ING's developed markets economist James Smith says in a note. Next month, headline inflation looks set to dip back below 10% due to a sharp fall in average petrol and diesel prices, the economist says. But that is only a temporary reprieve with a 75% increase in the household energy cap on its way in October, he says. Therefore, U.K. inflation is likely to head above 12% from October, according to ING. (maria.martinez@wsj.com)

UK Domestic Inflationary Pressures Seen Leading BOE to 50bp Raise

0841 GMT - Inflationary concerns continue to dog the Bank of England, Capital Economics senior U.K. economist Ruth Gregory says in a note. While global pressures are beginning ease, signs point to more persistent domestic inflationary pressures, she says. This increases the chances that the BOE will opt for a 50 basis-point interest rate hike on Sept. 15, rather than 25 basis points. Despite inflation in the U.S. peaking, Capital Economics says inflation in the U.K. will rise to at least 12.5% in October, while the recent increases in price and wag expectations will keep inflation higher for longer. (maria.martinez@wsj.com)

Persimmon's In-House Production Seems a Good Decision

0756 GMT - Persimmon's decision to bring part of the production in house is giving signs of being a positive choice as it is protecting the group from inflationary pressures and supply-chain issues, Richard Hunter, head of markets at Interactive Investor, says in a research note. The U.K. house builder has not only expanded its factory capacity but has also kept its gross margin at 31%, the analyst notes. The house building sector, however, continues to be out of favor with investors and Persimmon's shares look increasingly cheap despite its healthy financial position and room for further land acquisitions, Hunter says. (michael.susin@wsj.com)

 

Contact: London NewsPlus; paul.larkins@wsj.com

 

(END) Dow Jones Newswires

August 17, 2022 12:30 ET (16:30 GMT)

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