A brief foray higher in the past hour has seen the leading UK benchmark reach its highest level since the start of the month, but the market still appears to lack the momentum needed for a sustained push higher. The pound is fairly mixed in what has been a surprisingly quiet week for sterling after the fireworks seen last time out.
Centrica (LON:CNA) rises despite regulator ticking off
News that Energy regulator Ofgem has directed the UK’s biggest suppliers to improve the process in how they deal with complaints has done little to dampen Centrica, with the parent company of British Gas the biggest riser on the FTSE 100. While the regulator told the firm to improve in this area and come up with plans to improve complaint handling it stopped short of opening a compliance case, like it has against rivals First Utility, Ovo Energy and Utilita while the recent one with ScottishPower has been expanded. It’s not just disgruntled Centrica customers who have endured tough times of late with investors also suffering as the stock has lost nearly two-thirds of its value in the past 5 years to trade close to 15-year lows. However, increased regulatory oversight may well help the firm going forward, especially if it can position itself towards the better end of a bad bunch.
Italian public finances in the spotlight
Investors appear cautious ahead of the first budget from Italy’s populist government, with bond yields jumping higher after reports that a cabinet meeting scheduled for today to agree targets may be delayed. The government's bond fell on this news in the Corriere della Sera newspaper and the Euro dropped to its lowest level in a week against the US dollar. For much of the month yields on Italian 10-year bonds have been trading lower but there clearly remains some caution that Finance minister Tria could embark on a path that would put the country at odds with EU deficit rules. According to Reuters Tria is said to have threatened to resign in the past hour, defending his stance for a deficit target of 1.6%. For now, this remains a side story for the Euro and stock markets on the continent, but it’s not hard to envisage how quickly this could blow up and become an important driver of more than just the Italian debt market.
8% drop for 888
Reports of a sharp decline in revenue for gambling firm 888 in its key UK market have sent the stock lower by around 8%. This coincidence of 8s continues when the latest figures are viewed with a decrease of 18% to $87m for UK revenues in the first half of the year. Having said that, the FTSE 250 firm performed better elsewhere with total group sales rising by 1% to $273M and the company was keen to point out that a ruling from the US Supreme Court earlier in the year which paves the way for states to legalize sports betting represents a big opportunity to expand in that market.