Proactive Investors -
- FTSE 100 advances but mid caps decline
- BoE Governor stresses UK financial system remains robust
- Kantar and BRC surveys show food prices keep rising
Mid-cap rally falters
While the FTSE 100 is holding in the green the mid-cap FTSE 250 has tumbled now down 0.4%.
Among the fallers are Synthomer (LON:SYNTS) were shares have dipped over 13% after the UK chemicals group said its performance reflected “challenging macroeconomic conditions” at the end of last year and noted “subdued” demand across most of its markets.
CMC Markets has slipped a further 5% after a trading update late in yesterday's session. Lower equity volumes and lower margin institutional business in February and March were behind a warning of new net operating income guidance of £280mln to £290mln against a consensus of £323mln.
Heading the other way was Softcat which rose 5% after the London-based IT group posted £63mln in operating profit for the six months to January 31, ahead of initial expectations. The group added its full-year performance would beat previous estimates.
Peel Hunt called the numbers "very strong."
Reiterating a buy rating the broker said: "We continue to believe Softcat is the best way of playing a number of pertinent thematics, ranging from: (1) cost optimal cloud adoption; (2) reducing cybersecurity risks; and (3) the medium-to-long term resilience of DX spend."
888's William Hill hit by record fine
Shares in 888 Holdings PLC (LON:888) slipped in early trading after news that William Hill has been hit by a record fine by the Gambling Commission.
William Hill, which is owned by 888, will have to pay penalties of £19.2mln for failing to protect consumers and weak anti-money laundering controls.
The record penalty comes after the Gambling Commission found “widespread and
alarming” issues at the company, which led the commission to give “serious consideration” to spending the firm’s licence.
Andrew Rhodes, the Gambling Commission’s chief executive said, “because the operator immediately recognised their failings and worked with us to swiftly implement improvements, we instead opted for the largest enforcement payment in our history.”
The Commission found that customers were allowed to deposit large sums of money without the companies conducting any checks.
One customer was allowed to open a new account and spend £23,000 in 20 minutes without any checks. Another was allowed to open an account and spend £18,000 in 24 hours without any checks.
It is the latest scandal to hit 888 which at the end of January suspended VIP activities in some of its .com markets pending the outcome of an internal compliance investigation and, separately, announced the departure of Itai Pazner, its chief executive officer (CEO) and executive director.
Shares in 888 fell 1.4% to 53.76p in early exchanges in London.
Blue chips rally
Blue chip stocks remained on the front foot on Tuesday as buyers dipped their toes back into the market after the recent volatility.
At 9.00am the FTSE 100 was up 35 points at 7,506.78. The gains were reflected in Europe where the Cac 40 advanced 0.8% and the Dax gained 0.7%.
Richard Hunter at interactive investor said: “Some semblance of calm may be returning to wider markets following the unwelcome recent shocks provided by stresses in parts of the banking sector.”
“It may be premature to call an end to what could have turned into a crisis given both the fragility of sentiment and, over the coming days, the possibility of any further unwelcome surprises. Even so, time heals all wounds and in the absence of any new negative news, a return to business as usual is possible.”
Top of the risers in the lead index was Ocado Group PLC (LON:OCDO) after Ocado Retail’s (the joint venture with M&S) trading statement.
Hunter described the update as “something of a curate’s egg.”
He felt “with guidance unchanged and the outlook for earnings remaining “marginally positive”, there is little to excite investors in terms of any further measured progress for the Retail part of the business.”
Nonetheless shares rose 2.4% although they eased from earlier highs.
Banks continued to make steady progress recouping recent losses. Barclays PLC (LSE:LON:BARC) rose 1.3%, NatWest Group PLC (LSE:LON:NWG) firmed 1.2% and HSBC (LON:HSBA) rose 0.9%.
Retailer Next PLC gained 0.9% on reports it is looking at buying Cath Kidston following its recent purchases of Joules and Made.com.
Halma PLC (LON:HLMA) said it has acquired FirePro, a maker of aerosol-based fire suppression systems, for €150mln (£132mln) sending shares up 1.3% but Diageo (LON:DGE) fell 0.5% after it announced that Ivan Menezes will retire as chief executive officer on 30 June 2023 and be succeeded by the current chief operating officer Debra Crew.