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FTSE 100 Falls After Weaker-Than-Forecast GDP Data

10/13/2021 | 03:00am EST

FTSE 100 Falls After Weaker-Than-Forecast UK GDP Data

0755 GMT - The FTSE 100 falls 0.5% to 7095 points as investors digest data showing U.K. economic growth missed forecasts in August and exercise caution ahead of U.S. inflation data and the Federal Reserve's latest meeting minutes later. Mining shares are top fallers while housebuilders rise after Barratt Developments posted a well-received trading update. The U.K. economy grew 0.4% month-on-month in August, versus the 0.6% growth expected in a WSJ survey of economists. "The overall third-quarter GDP figure is set to come in around half the Bank of England's 3% forecast," ING economist James Smith says. The focus now turns to U.S. inflation data at 1230 GMT and the Fed's minutes at 1800 GMT.

 
Companies News: 

NatWest Pledges $136 Bln Climate and Sustainable Funding and Financing by 2025

NatWest Group PLC on Wednesday pledged to provide 100 billion pounds ($135.88 billion) of climate and sustainable funding and financing, or CSFF, by the end of 2025.

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Barratt Developments' 1Q Forward Sales Rose, New CFO Incoming

Barratt Developments PLC said Wednesday that total forward sales rose 7.9% at the start of fiscal 2022, and named a new chief financial officer.

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Centrica Says Performance in Line With Views; Well Hedged for Winter and Beyond

Centrica PLC said Wednesday that performance since July has been in line with expectations, and that it is well hedged for the coming winter and beyond.

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THG PLC Knows No Reason for Share-Price Fall

THG PLC said Wednesday that it doesn't know of any reason for the recent fall in its share price.

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Darktrace 1Q Revenue Rose; Slightly Raises Full-Year Revenue Forecast

Darktrace PLC on Wednesday reported strong sales performance and improved revenue in its first quarter, and broadly reiterated its full-year guidance, though with slightly improved revenue expectations.

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Marston's FY 2021 Pub Sales Slipped; Returned to Growth in Final Quarter

Marston's PLC said Wednesday that overall pub sales in fiscal 2021 fell due to significant coronavirus pandemic-driven disruption, but returned to growth in the final quarter.

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Rainbow Rare Earths to Raise GBP6.4 Mln via Premium-Priced Share Placing

Rainbow Rare Earths Ltd. said Wednesday that it is planning to raise 6.4 million pounds ($8.7 million) via a share placing and will use the money towards the Phalaborwa and Gakara projects, as well as to repay a loan.

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Man Group's Funds Under Management Rose in 3Q

Man Group PLC said Wednesday that funds under management at the end of the third quarter were 3.1% higher than at the end of the second quarter, and that the board sees positive momentum carrying over into the fourth quarter.

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Kerry Group Targets 4%-6% Revenue Volume Growth in 2022-2026

Kerry Group PLC said Wednesday that it has updated its average revenue volume growth target to 4%-6% for 2022-2026.

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Serabi Says Gold Production on Track to Meet 2021 Guidance

Serabi Gold PLC said Wednesday that its Palito Complex project in Brazil is on track to meet 2021 production guidance of 33,000-36,000 ounces.

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Oxford Cannabinoid Technologies FY 2021 Pretax Loss Widened on IPO-Related Costs

Oxford Cannabinoid Technologies Holdings PLC on Wednesday reported a widened pretax loss for the fiscal year 2021 as it booked higher costs related to its initial public offering.

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Victoria Sees FY 2022 Pretax Profit Ahead of Market Views

Victoria PLC said Wednesday that its underlying pretax profit will exceed consensus market expectations for fiscal 2022, and that its revenue has increased, driven by strong consumer demand for flooring products.

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Brickability Sees 1H Revenue, Earnings Rising Significantly

Brickability Group PLC said Wednesday that its expects its first-half revenue to triple and earnings to more than double on year, following a strong pandemic recovery in the U.K. building sector.

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Centaur Media Sees 2021 Revenue Increasing; Shares Rise

Centaur Media PLC shares rose Wednesday after it said that it expects its 2021 revenue to be at the top end of market expectations, and that its adjusted earnings continue to grow across its brands.

 
Market Talk: 

Shortages, Energy Crisis Could Hobble UK Economy in Months Ahead

0835 GMT - The U.K. economy grew 0.4% in August after contracting 0.1% in July, confirming that the rapid gains registered during the reopening phase from the pandemic-induced lockdown are largely behind, Capital Economics' chief U.K. economist Paul Dales says. August's data add to the evidence that product and labor shortages are restraining economic activity, particularly in the manufacturing and construction sectors, he says. "We suspect shortages will be a bigger drag on GDP in September and October--the petrol crisis probably prevented some people from getting to work," Dales says. In this context, the U.K. economy isn't expected to rise much in the coming months, but growth should accelerate from mid-2022 and into 2023 once the current supply-related strains ease, he says. (xavier.fontdegloria@wsj.com)

Just Eat Takeaway.com Business Mix Shift Has Reduced Its Long-Term Potential

0805 GMT - Just Eat Takeaway.com's third-quarter order numbers were 8% below RBC Capital Markets' forecast. The food-delivery company expects order growth--excluding the Grub business--to exceed 45% for the year and projects gross transaction value, including Grub, to be in the range of EUR28 billion to EUR30 billion. RBC forecasts a gross transaction value of EUR28.6 billion. While the company is investing significantly to defend its market position, analysts at the Canadian bank see continued downside risk to consensus profit expectations beyond 2021. "The stock's valuation discount relative to history, in our view, reflects the shifting business mix towards less-profitable, own-delivery services, which has reduced the group's long-term margin potential," RBC says. (anthony.orunagoriainoff@dowjones.com)

UK 10Y Gilt Yields Slip After August GDP Miss

0754 GMT - Borrowing costs for the U.K. ease slightly after official data showed output fell below expectations in August, pointing to a slowdown in economic growth. The yield on the 10-year U.K. benchmark bond trades last at 1.141%, having briefly breached the 1.2% level on Monday, the highest level since May 2019, according to Tradeweb. Economic activity in August rose by 0.4%, missing expectations in a WSJ poll of economists of 0.6%. Slower growth could potentially cool expectations of an interest rate rise by the Bank of England this year. "Moving too sharply could see the economy go into reverse, but the Bank won't want to risk losing credibility if prices keep accelerating," says Hargreaves Lansdown's Susannah Streeter. (lorena.ruibal@wsj.com)

UK March 2051 Index-Linked Gilt Auction to Test Investor Appetite

0734 GMT - The U.K. Debt Management Office's planned sale of GBP500 million in the 0.125% March 2051 index-linked gilt will test whether there is demand at current pricing levels, says RBC Capital Markets. The gilt hasn't seen any concessions ahead of today's auction on micro-relative value metrics and it has outperformed comparable gilts of similar maturities over the past two sessions, analysts at the bank say. "What this could suggest however, is that there is demand for the bond around current levels on micro-relative value," they say, adding that this measure shows the bond trades almost in line with the level at which it traded before the previous tap on July 7. It outperformed after the tap, they add. (lorena.ruibal@wsj.com)

Barratt Developments 1Q Update was Reassuringly Undisruptive

0730 GMT - Barratt Developments' first quarter trading update was reassuring, with no significant disruption to building, construction rates in-line with fiscal 2022 planned output and no change in guidance for cost inflation, Jefferies says. The house builder's relatively cheap price attached to its shares offer strong value as a result, the U.S. bank says. Barratt said it has a substantial net cash balance, but there was no reiteration of fiscal 2022 cash guidance and no mention of a possible special dividend next year--likely reflecting public relations sensitivity ahead of a residential property developer tax in the upcoming U.K. government budget, Jefferies says. Jefferies retains its buy rating and price target of 868.0 pence. Shares are up 3.4% at 663.8 pence. (joseph.hoppe@wsj.com)

Contact: London NewsPlus, paul.larkins@wsj.com

(END) Dow Jones Newswires

10-13-21 0500ET

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