London midday: Stocks push higher as Rentokil, Entain gain; ECB eyed

17th Oct 2024 10:42

(Sharecast News) - London stocks had pushed higher by midday on Thursday, helped along by solid performances from the likes of Rentokil and Entain, as investors eyed an expected rate cut by the European Central Bank.

The FTSE 100 was up 0.5% at 8,366.81.

Kathleen Brooks, research director at XTB, said: "There are two key events today, the ECB meeting and this evening's Netflix results. Both events are highly anticipated, and the market has big expectations: the ECB will cut rates and signal a new more dovish phase, while Netflix is set to announce a stellar quarter of earnings growth and news about future revenue streams.

"We don't think that the market is wrong to assume that the ECB will turn super dovish, or that Netflix will kick off the start of tech earnings season in style, however, we do think that there is no room for error. The market has fully priced in just over two 25bp rate cuts from the ECB by the end of the year, and there are another 4.5 cuts priced in after that. Bloomberg's ECB Speak index has fallen to one of its lowest levels, which suggests that ECB officials are now more dovish than they were during the peak of the pandemic.

"This also suggests that ECB officials are singing from the same hymn sheet, as the typically hawkish German ECB members also shift to a dovish stance. This compares to the Fed, although Fed members have generally spoken in more dovish tones, they are hovering somewhere around neutral. This fits with the switch from expecting a 50bp rate cut at the November Fed meeting to expecting a 25bp rate cut."

The ECB rate announcement is due at 1315 BST.

In equity markets, pest control services group Rentokil Initial surged as it held on to full-year guidance following a profit warning last month, reporting a steady third quarter with revenues unchanged year-on-year at £1.38bn.

Russ Mould, investment director at AJ Bell, said: "While today's material bounce in the share price for pest control firm Rentokil will be sweet relief for shareholders who have endured a tough period, the move is worth putting in context.

"The shares had been weak heading into the third-quarter update so they are now only modestly higher over the course of the last week and are still down more than 20% since September's profit warning.

"Investors will have been reassured by the fact full-year targets remain unchanged and by the action taken to boost organic growth in North America and bring costs back under control. The company has also revamped its senior leadership team across the Atlantic.

"These are baby steps in the right direction but, with a representative from Nelson Peltz's Trian vehicle on the board, after the activist snapped up a stake in the company, pressure on its management is likely to remain acute. Chief executive Andy Ransom needs to deliver after more than a decade in situ."

Gambling and gaming group Entain rallied as it boosted its full-year outlook after third-quarter numbers came in ahead of expectations.

Chemring was also in the black as it said its performance remained in line with analyst expectations, supported by a robust order intake of £638m and an order book of £1.1bn as of 30 September.

St James's Place gained as it said funds under management reached a record £184.4bn in the three quarter to September end, up from £158.6bn a year earlier, boosted by an improving macroeconomic environment. It was also an improvement on the second quarter, when FUM reached £181.9bn.

Outside the FTSE 350, N Brown rocketed after agreeing to be taken private by a company owned by Joshua Alliance - whose family has been involved with the group since the 1960s - in a £191m deal.

On the downside, paper and packaging group Mondi tumbled as it said that underlying core profit fell in the third quarter in "muted" trade, mainly due to more planned maintenance shuts.

Investment management firm Man Group was weaker as it said assets under management fell to $174.9bn as at 30 September, from $178.2bn as at 30 June.

Investment platform AJ Bell lost ground despite saying that assets under administration hit record highs in the year ended 30 September as both customer numbers and inflows grew.

Smiths Group, Persimmon and Howden Joinery all fell as they traded without entitlement to the dividend.

RS Group was hit by a downgrade to 'hold' from 'buy' at Deutsche Bank, which cut the price target to 830p from 950p.

Market Movers

FTSE 100 (UKX) 8,366.81 0.45%

FTSE 250 (MCX) 21,083.93 0.50%

techMARK (TASX) 4,794.13 0.40%

FTSE 100 - Risers

Rentokil Initial (RTO) 371.80p 9.00%

Entain (ENT) 748.00p 5.06%

Informa (INF) 831.00p 2.69%

Anglo American (AAL) 2,321.00p 2.68%

Melrose Industries (MRO) 442.70p 2.60%

Barclays (BARC) 242.80p 2.43%

Intermediate Capital Group (ICG) 2,154.00p 2.18%

Flutter Entertainment (DI) (FLTR) 17,750.00p 1.84%

Diageo (DGE) 2,622.00p 1.75%

3i Group (III) 3,378.00p 1.56%

FTSE 100 - Fallers

Mondi (MNDI) 1,295.50p -6.80%

Smurfit Westrock (DI) (SWR) 3,308.00p -3.08%

Smith (DS) (SMDS) 457.60p -2.31%

Vodafone Group (VOD) 74.40p -2.23%

Rio Tinto (RIO) 4,954.50p -1.68%

Antofagasta (ANTO) 1,789.00p -1.68%

Smiths Group (SMIN) 1,628.00p -1.63%

Persimmon (PSN) 1,694.00p -1.51%

United Utilities Group (UU.) 1,092.00p -1.27%

Bunzl (BNZL) 3,596.00p -1.05%

FTSE 250 - Risers

Wood Group (John) (WG.) 133.00p 4.31%

Chemring Group (CHG) 381.50p 4.23%

Indivior (INDV) 646.00p 3.78%

Hochschild Mining (HOC) 225.50p 3.44%

Burberry Group (BRBY) 673.00p 2.81%

Petershill Partners (PHLL) 223.00p 2.76%

Centamin (DI) (CEY) 161.50p 2.67%

W.A.G Payment Solutions (WPS) 82.80p 2.48%

Marshalls (MSLH) 356.00p 2.45%

Apax Global Alpha Limited (APAX) 140.20p 2.34%

FTSE 250 - Fallers

RS Group (RS1) 723.00p -3.92%

Empiric Student Property (ESP) 94.20p -2.79%

Tate & Lyle (TATE) 785.50p -2.66%

Moonpig Group (MOON) 251.00p -2.33%

ITV (ITV) 76.95p -1.85%

Hays (HAS) 84.25p -1.75%

Fidelity China Special Situations (FCSS) 210.50p -1.64%

Alpha Group International (ALPH) 2,135.00p -1.61%

Renewi (RWI) 627.00p -1.42%

Chrysalis Investments Limited NPV (CHRY) 90.90p -1.41%