LONDON MARKET OPEN: Stocks rise as Crest Nicholson lifts housebuilders

(Alliance News) - The FTSE 100 climbed early Thursday, with gains from housebuilders, on the back of positive results from mid-cap peer Crest Nicholson, adding impetus to London's blue-chip index ahead of the latest Bank of England interest rate decision at midday.

The BoE updates the market amid a backdrop of inflationary worries and its US counterpart, the Federal Reserve, making hawkish noise last week.

"Today's Bank of England update is likely to see monetary policy unchanged. In the run-up, there has been some focus on May CPI data, which were above BoE expectations and saw inflation move slightly above the 2% target. April GDP data also pointed to stronger Q2 growth than the BoE predicted. That has caused some forecasters to bring forward their expected date for a first rise in Bank Rate," analysts at Lloyds Bank commented.

"This is not one of the meeting where the BoE issues a new set of forecasts and there won't be a press conference. The minutes may acknowledge near-term upside risks for growth and inflation. However, we expect a key message to be that the rise in inflation is temporary and that the Monetary Policy Committee is content to just monitor the situation for now."

The FTSE 100 index was up 15.08 points, or 0.2%, at 7,089.14 early Thursday. The mid-cap FTSE 250 index was up 34.66 points, or 0.2%, at 22,694.08. The AIM All-Share index was up 0.79 of a point, 0.1%, at 1,231.88.

The Cboe UK 100 index was up marginally at 705.96. The Cboe 250 was up 0.1% at 20,383.08, and the Cboe Small Companies fell 0.1% to 15,388.21.

In Paris, the CAC 40 was up 0.5%, while Frankfurt's DAX 30 rose 0.6%.

The pound was quoted at USD1.3962 early on Thursday in London, soft on USD1.3965 at the equities close on Wednesday. The euro stood at USD1.1937 early Thursday, down against USD1.1947 at the European equities close on Wednesday. Against the yen, the dollar was trading at JPY110.88, up against JPY110.85.

In the FTSE 100, housebuilders Berkeley, Barratt Developments and Taylor Wimpey rose 2.4%, 1.8% and 1.0% respectively on a positive read across from mid-cap Crest Nicholson.

Peer Crest Nicholson rose 1.8%, among the best performers in the FTSE 250, after raising its annual outlook.

Crest Nicholson posted revenue growth of 35% to GBP324.5 million in the six months to April 30, from GBP240.0 million a year earlier. It swung to a pretax profit of GBP36.3 million from a GBP51.2 million loss.

It also noted an inventory impairment provision release of GBP7.6 million, swinging from a GBP43.2 million exceptional hit a year earlier, "reflecting confidence in market conditions".

Crest declared a 4.1 pence per share payout, having not released a first half dividend last year. The company also lifted its profit guidance.

For the year, adjusted pretax profit is now expected to be at least GBP100.0 million, so more than double the GBP45.9 million in financial 2020.

Bunzl rose 2.7%. The distribution firm kept its annual revenue guidance unchanged but lifted its margin outlook.

Bunzl said it has seen "good overall growth" in its first half ending June 30. Revenue for the period is tipped to rise 1% year-on-year, and by around 6% to 7% at constant exchange rates.

"At constant exchange rates, underlying revenue growth is expected to reflect a strong recovery in the base business, including the foodservice and retail sectors, largely offset by the anticipated decline in larger Covid-19 related orders. Underlying revenue over the first half is expected to be approximately 6% higher than the comparable 2019 period," Bunzl added.

"At constant exchange rates, underlying revenue is expected to be moderately higher in 2021 compared to 2019, demonstrating the resilience of the Bunzl business model. The group is increasing its adjusted operating margin expectations for the year to be slightly ahead of historical levels."

Back among the mid-caps, 888 Holdings rose 2.7% after securing a deal which boosts its US footprint.

The gambling firm will partner with Sports Illustrated on a betting and iGaming platform.

"888 expects to kick off the partnership with the launch of an all-new Sports Illustrated wagering experience later this year branded SI Sportsbook, which is expected to launch in Colorado in the second half of 2021, with other states to follow," the company said.

Sports Illustrated is owned by Authentic Brands Group. Under the deal, ABG will grant 888 an exclusive license to use the Sports Illustrated brand for online sports betting and iGaming.

Sports betting laws in the US are being relaxed in many states for the first time following a Supreme Court ruling in 2018, allowing bookmakers to tap into the lucrative market there.

The Nikkei 225 in Tokyo and Shanghai Composite both ended flat on Thursday. The S&P/ASX 200 shed 0.3%, though the Hang Seng in Hong Kong was up 0.2% in late trade.

"With very little in the way of local macro news, it has been a very quiet start to the day in the Asia-Pacific region. In equity markets, the major bourses have recorded no more than modest gains or losses," Daiwa Capital Markets analyst Chris Scicluna commented.

Gold was quoted at USD1,775.96 an ounce early Thursday, down from USD1,788.30 late Wednesday. Brent oil was quoted at USD75.48 a barrel, down from USD75.65.

By Eric Cunha; ericcunha@alliancenews.com

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