Metro Bank Share News (MTRO)

(Alliance News) - While European bourses were busy clocking record highs on Thursday, the FTSE 100 continued to trundle behind, hampered by a stronger pound and weaker oil price.

While sterling strength was bad news for London's blue-chip index, it acted as a boon for the more domestically-focused FTSE 250, which was trading nearly 90 points higher at midday.

The FTSE 100 index was down 12.51 points, or 0.2%, at 7,278.69 midday Thursday. The FTSE 250 index was up 87.39 points, or 0.4%, at 23,521.46. The AIM All-Share index was down 5.67 points, or 0.5%, at 1,241.21.

The Cboe UK 100 index was down 0.2% at 721.14. The Cboe 250 was up 0.3% at 20,977.40 and the Cboe Small Companies down 0.6% at 15,495.35.

In mainland Europe, the CAC 40 in Paris was up 0.2%, while the DAX 40 in Frankfurt was up 0.1%. Both hit fresh record highs in morning trade Thursday.

In contrast to its European counterparts, the FTSE 100 has so far been unable to break above pre-pandemic levels and remains well below its record high of 7,903.50 set back in 2018.

Capping any progress for the blue-chip index this week has been a resurgent pound, regaining some momentum after a tumble earlier in the month when the Bank of England surprised markets with a decision to hold interest rates.

However, stronger-than-expected UK inflation and jobs data this week has set the stage for a December rate hike.

Sterling was quoted at USD1.3499 midday Thursday, higher than USD1.3465 at the London equities close on Wednesday and up around 0.8% higher since the week began. The currency had topped USD1.35 before slipping back.

"When some 70% of its constituents' earnings are derived from overseas, strength in sterling isn't that helpful," commented AJ Bell investment director Russ Mould.

While higher on the day, both the euro and yen are tracking week-to-date losses. The euro traded at USD1.1344 Thursday midday, up on USD1.1309 late Wednesday. Against the yen, the dollar was quoted at JPY114.13, down from JPY114.51.

Gold was quoted at USD1,862.97 an ounce on Thursday, soft on USD1,864.44 on Wednesday.

Wall Street is set for a higher start, with the Dow Jones pointed up 0.2%, the S&P 500 up 0.3% and the Nasdaq Composite up 0.5%.

The economic events calendar on Thursday has the latest US jobless claims numbers at 1330 GMT.

In London, energy majors were weighing on the FTSE 100 as oil prices retreated. Brent oil was trading at USD79.98 a barrel, falling from USD81.58 late Wednesday.

Crude prices received a knock after US President Joe Biden called on US regulators Wednesday to look into the causes of the nationwide spike in gasoline prices, which he said is hurting workers. In a letter to the Federal Trade Commission, Biden took aim at oil companies he says are raising prices at the pump even as their expenses decline and profits soar.

Royal Dutch Shell 'A' and 'B' shares were both down 1.9% at midday, while BP fell 1.6%.

The worst performer in the index was GlaxoSmithKline, falling 2.6% as the stock went ex-dividend, meaning new buyers no longer qualify for the latest payout.

Topping the index was Royal Mail, the postal operator up 5.7% as investors gave plans for GBP400 million worth of shareholder returns their stamp of approval.

Revenue in the first half ended September 26 climbed 7.1% year-on-year to GBP6.07 billion from GBP5.67 billion. Royal Mail's pretax profit multiplied to GBP315 million from GBP17 million a year earlier.

Royal Mail declared an interim dividend of 6.7 pence, having paid none last year. It also will pay a special dividend worth GBP200 million in total and also will start a GBP200 million share buyback immediately.

The more domestically-focused FTSE 250 was outperforming on Thursday, helped as Playtech shares rose 4.4% on a potential third suitor.

The gambling software provider confirmed that on November 5, it received a preliminary approach from JKO Play. JKO is controlled by Eddie Jordan and Keith O'Loughlin. This third approach follows Gopher Investments making an approach for the company - just days after Playtech accepted a GBP2.1 billion offer from Aristocrat Leisure, which closed down 3.6% in Sydney on Thursday.

Shares in Mecca Bingo owner Rank Group rose 3.2% in a positive read-across after blue-chip Flutter Entertainment agreed to buy online bingo operator Tombola for GBP402 million.

Limiting the FTSE 250's advance was a 15% slump in Biffa shares. The waste management firm reinstated its interim dividend after a first half that saw revenue top levels seen prior to the coronavirus pandemic, but it warned that progress at its Seaham recycling plant has been slower than expected.

The High Wycombe, England-based company trimmed its pretax loss to GBP25.6 million for the first half ended September 24 from GBP52.5 million a year previously.

Rotork fell 7.4% on a warning over supply chain strife. Bath-based Rotork, which serves the energy, water and chemical industries, said order intake has remained strong, but supply chain disruption is set to continue at least in the near-term.

Rotork said component sourcing over the past few months has become difficult, resulting in revenue over the four-month period being down year-on-year and hitting margins.

Elsewhere in London, Metro Bank shares dived 18% after agreeing to end talks over a possible takeover offer by private equity firm Carlyle Group for the retail bank. Both parties announced the decision but neither gave a reason.

"The board continues to strongly believe in the standalone strategy and future prospects of Metro Bank," the lender said.

However, Interactive Investor's Victoria Scholar believes a standalone future for the bank could be short-lived. "With interest rates in the UK on the cusp of moving higher and with Metro Bank's share price down more than 20% year-to-date, the challenger lender remains a possible M&A target," she said.

By Lucy Heming; lucyheming@alliancenews.com

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