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FTSE Rises in Early Trade; IAG Jumps

17/09/2021 9:59am

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London Stocks Rise in Early Trade; IAG Jumps

The FTSE 100 index rises 0.3% to 7050.63, as sentiment picks up, albeit tentatively, with gains for travel and entertainment stocks offsetting falls in most heavyweight mining stocks. British Airways owner International Consolidated Airlines Group is the biggest riser, up 4% after reports that the U.K. is set to make major changes to the current international-travel rules. Reports say the government will merge the current green and amber lists of countries into one low-risk category and reduce the number of red-list countries. Meanwhile, retailers mostly shrug off earlier data showing an unexpected fall in U.K. retail sales. "Stock markets have endured a see-saw week, but as the week enters its final day there are indications in price action that a low may be forming," IG says.

 
Companies News: 

UK Competition Watchdog to Consider Pennon's Acquisition of Bristol Water

The U.K. Competition and Markets Authority said Friday that it is looking at Pennon Group PLC's acquisition of Bristol Water.

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S4 Capital's Media.Monks Mergers with Zemoga

S4 Capital PLC, a U.K. digital-advertising and marketing-services company, said Friday that its new unitary brand Media.Monks is joining forcer with Zemoga via a merger.

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Foxtons Group Names Nigel Rich as Next Chairman

Foxtons Group PLC said Friday that it has appointed Nigel Rich as chairman with effect from Oct. 1, succeeding Ian Barlow.

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Aegon to Buy Back Shares Worth EUR96 Mln to Offset Paying Dividend in Shares

Aegon NV said Friday that it will repurchase common shares worth 96 million euros ($112.9 million) to neutralize the dilutive effect of its first-half dividend in shares.

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CEPS Raises GBP1.6 Mln in Discounted Share Placing

CEPS PLC said Friday that it raised 1.6 million pounds ($2.2 million) in a discounted share placing.

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Safestay Says Board Was Approached About Possible Offer

Safestay PLC said on Friday that the board has received a "very early stage and highly conditional approach" from a third party in relation to a possible offer for the company.

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Volvere 1H Pretax Loss Narrowed

Volvere PLC on Friday reported a significantly narrowed pretax loss for the first half of 2021, noting that its financial position continues to be strong, with high liquidity.

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Accsys Technologies Five-Month Performance Marked by Sales, Revenue Growth

Accsys Technologies PLC said Friday that its performance in the first five months of fiscal 2022 was strong, marked by growth in sales and revenue.

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GoldStone Resources Shares Drop on Continued Halt to Gold Production at Ghanian Mine

Shares in GoldStone Resources Ltd. fell on Friday after the company said that it hasn't been able to start gold production at the Homase Mine in Ghana.

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NextEnergy Solar Fund Enters Into GBP100 Mln Joint Venture with Eelpower

NextEnergy Solar Fund Ltd. said Friday that it has entered into a 100 million-pound ($137.9 million) joint-venture partnership with Eelpower Ltd., a battery storage specialist in the U.K.

 
Market Talk: 

Markets Overprice Prospect of BOE Rate Rises, Says Deutsche Bank

0818 GMT - Interest-rate markets are overpricing prospects of the Bank of England raising interest rates next year, says Deutsche Bank. "Rates pricing is consistent with 50 basis-point base rate by end of 2022 and a very flat curve hereafter implying 75 basis points as the long run terminal rate," DB's Sanjay Raja and Panos Giannopoulos say. The February 2022 overnight index swap, currently at 15.9 bps, is implying around a 70% chance of a 15 basis-point increase, they note. "Whilst of course a February [rate] hike could materialize, it is far from a foregone conclusion." The analysts estimate a rate increase in February should be less than 50% priced at this stage given the net balance of risks.

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BOE Expected to Keep Policy On Hold

0756 GMT - The Bank of England is expected to keep monetary policy on hold at next week's meeting. "It remains too early to expect a further hawkish pivot from the Monetary Policy Committee at this stage," says Deutsche Bank. Growth has slowed materially and while hiring, unemployment and job vacancies have been positive, "the scale of furloughed staff remains worryingly high with only weeks to go on the furlough scheme," DB's Sanjay Raja and Panos Giannopoulos say. The likely uncertainty around labour market slack combined with the slowdown in demand and uncertain health outlook could weigh on the final Monetary Policy Report later this year, they say.

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Weak UK Retail Sales Could Hamper Sterling's Rise

0736 GMT - Data showing an unexpected 0.9% fall in U.K. retail sales in August, against the consensus forecast in a WSJ poll for a rise of 0.8%, "may take some of the momentum out of the rise in U.K. money market rates and also GBP," ING says. The impact may be limited, however, as the weak figures are unlikely to prompt the Bank of England to "deliver a 'rate protest'" against market pricing of future interest-rate rises at next week's meeting, ING says. This is likely to leave GBP/USD gravitating around 1.3800 and EUR/GBP near 0.8500, it says. GBP/USD is last up 0.1% at 1.3801, having traded at around 1.3806 before the data. EUR/GBP rises 0.1% to 0.8535, versus around 0.8525 beforehand.

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Near-Term Outlook for UK Retail Sales Looks Challenging

0654 GMT - August's U.K. retail sales data bring more evidence that the recovery in consumer spending has lost considerable momentum in the third quarter, Pantheon Macroeconomics chief U.K. economist Samuel Tombs says. Retail sales volumes fell by 0.9% month-on-month in August but they were still 4.6% above their February 2020 level. So far, household spending appears to have been no stronger in September, Tombs says. "The near-term outlook for households' spending is overcast," the economist says. Households' real disposable incomes will decline in the fourth quarter as inflation soars to about 4%, labor income drops in the wake of the wind-down of the furlough program and a GBP20-a-week uplift to Universal Credit is withdrawn, he says.

 

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

(END) Dow Jones Newswires

September 17, 2021 04:44 ET (08:44 GMT)

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