The FTSE 100 index closed Monday up 0.9% to 7245 points in line with European peers, helped by financial and oil-exposed stocks as investors wait for U.S. inflation numbers amid expectations that interest rates peaked despite Fed's Chair Jerome Powell attempt to counter this narrative, AJ Bell investment director Russ Mould says in a note. "U.S. inflation numbers out tomorrow will tell their own story and a higher-than-expected reading could well prompt renewed jitters among investors," Mould adds. Oil-and-gas majors BP and Shell closed up 1.4% and 1%, respectively, as Brent crude rose nearly 1.3% at $82.49. Shares of insurer Phoenix outperformed the blue-chip index, closing up 5.7%, after lifting its cash-generation target, followed by Rolls-Royce and Melrose Industries, up 3.5% and 3% respectively.
COMPANIES NEWS:
Vodacom Group Revenue Surges on Egypt Acquisition
Vodacom Group said its revenue jumped in the first six months of the year, boosted by the acquisition of Vodafone Egypt, and declared an interim dividend.
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BAE Systems Says Order Flow Is Strong; Backs Guidance
BAE Systems said order flow on new and existing programs remains strong, and backed its guidance for the year.
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British Land Loss Widened as Portfolio Value Slipped; Backs Guidance
British Land said its pretax loss widened, as portfolio valuations fell on higher interest rates, though it backed full-year rental growth guidance.
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Tullow Oil Enters $400 Mln Debt Facility, Offtake Deal with Glencore Unit
Tullow Oil said it has agreed to a $400-million five-year debt facility and an oil marketing and offtake deal with the subsidiary with Glencore's U.K. oil and gas division.
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Phoenix Group Raises Cash Generation Target on Completion of Funds Merger
Phoenix Group Holdings has upgraded its cash generation target after completing the transfer of Standard Life and Phoenix Life businesses into Phoenix Life.
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Ingka Centres Buys UK Shopping Center, to Open New IKEA City Store
STOCKHOLM--IKEA store owner and operator Ingka Group said Monday it has bought Churchill Square shopping center in Brighton, U.K., with plans to bring a new IKEA City store to the site.
MARKET TALK:
UK House-Builder Stocks are Looking More Attractive for Investors
1315 GMT - U.K. house builders are gearing for the biggest driver in share prices in the form of the country's inflation print next week--but even without significant moves in yield expectations there are a lot of attractive points in the sector, Jefferies says. Lower build-cost inflation is driving positive momentum and improving selling rates through spring and the U.K. government's spring budget could offer more meaningful upside, Jefferies analysts say in a research note. "Reflecting this week's trading updates--Persimmon, Taylor Wimpey and Redrow--[along with] our Vistry management meeting and channel check on Berkeley, we have increasing confidence in fiscal 2024, even upping forecasts for some stocks," the U.S. bank says. Jefferies's top picks are Bellway and Taylor Wimpey, whose shares are down 0.3% and up 0.7%, respectively. (joseph.hoppe@wsj.com)
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Marks & Spencer's Clothing and Home Division Likely to Drive Gains
1236 GMT - Marks & Spencer remains mispriced as the group could see potential share growth of 30%, mainly supported by its clothing and home division, despite the year-to-date performance, Bank of America Global Research analysts say in a note. BofA sees the U.K. retailer's pretax profit estimates 5% ahead of market consensus over FY 2024 to FY 2028, largely supported by higher margin forecasts for C&H, they say. "We think this remains a key underappreciated part of the turnaround story however and shift our FY 2027 operating margin to 11.1% from 10.0%," they add. In the closer term, further market share gains and the potential expectations beat of its Christmas performance could be the next possible catalysts, the analysts add. Shares are up 0.9%. (michael.susin@wsj.com)
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UK OBR Could Reduce Public Sector Borrowing Forecast By GBP12B in FY2023/24, HSBC Says
1224 GMT - The U.K. Office for Budget Responsibility could lower the forecast for public sector net borrowing by GBP12 billion in the fiscal year 2023/24, HSBC senior economist Elizabeth Martins says in a note. "The OBR is likely to present the Chancellor with a somewhat improved picture, with higher inflation/nominal GDP alone reducing borrowing by around GBP22 billion this year and next," Martins says. Higher inflation and big real growth revisions have resulted in better economy than OBR's March predictions leading to above-forecast government revenue and lower borrowing, she says. "But the outlook from here may be less positive," Martins says. (miriam.mukuru@wsj.com)
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Diageo's Target Cut Too Pessimist Given Rebound Prospects
1158 GMT - Diageo's medium-term targets downgrade due to weaker Latin America sales could be exaggerated given the potential regional improvement ahead, Barclays analysts say in a note. The liquor maker could deliver margin expansion in fiscal 2025 as Latin America's volume performance is likely to rebound, coupled with a substantial reduction in agave prices, the analysts say. "Our take is that it is driven by inflation--as long as we see inflation ahead of normal levels, the company doesn't expect to deliver much margin. However, if/when the inflation cycle turns, margin expansion would return," they add. Shares are down 0.8%. (michael.susin@wsj.com)
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Primark's Price Hikes Could Fade As Deflation Nears
1146 GMT - AB Foods's retail arm--Primark's--momentum is robust and deflation could be around the corner, Barclays analysts say in a note after speaking with Finance Director Eoin Tonge. In 2022 Primark substantially increased prices for the first time in a decade, but it was well-executed and it didn't seem to faze customers with minimal disruption and better-than-expected volume elasticity, they highlight. Looking ahead, price increases will fade this fiscal year, with an 1% increase expected in the first half and price increases seen flat in the second, they say. "Tonge said he doesn't see much deflation on its spring/summer ranges but admitted it's possible there could be some deflation on its autumn/winter ranges," the analysts add. Shares are down 0.6%. (michael.susin@wsj.com)
Contact: London NewsPlus, Dow Jones Newswires;
(END) Dow Jones Newswires
11-13-23 1202ET
