FTSE 100 Closes Down 0.5% Dragged by Financial Stocks After ECB Holds Rates

The FTSE 100 index closed Thursday down 0.5% to 7923 points, dragged by financial, industrial and consumer goods stocks following the ECB's decision to keep interest rates unchanged, a day after U.S. reported a hotter-than-expected inflation, AJ Bell investment director Russ Mould writes in a note. Shares of grocer Tesco retreated from yesterday's rise and were the index's worst performer, down 5%, followed by airlines easyJet and IAG, down 3.7% and 3.6%, respectively. On the green side, Kingfisher shares were among the top performers, up 2.4% after HSBC upgraded its rating on the stock to buy from hold.

COMPANIES NEWS:

AstraZeneca Raises Dividend

AstraZeneca is raising its dividend for this year, it said.

---

M&C Saatchi Names Rob Doubal, Laurence Thomson as New Chief Creative Officers

M&C Saatchi named Rob Doubal and Laurence Thomson as its new joint global chief creative officers.

---

Norcros Revenue Declines; Key Profit Figure in Line With Views

NorcRos said it expects to report a fall in revenue for its fiscal year, but that a key profit figure will be in line with market expectations.

---

Lok 'n Store Group Agrees to GBP378 Mln Takeover

Lok 'n Store Group has agreed to a 378 million pound ($474 million) takeover by Shurgard Self Storage.

---

Distil's Gross Profit, Revenue Tumbles on Weak Consumer Demand

Distil's fourth-quarter performance was slower than it had expected due to consumers cutting back on spending.

---

Darktrace Returns to Growth, Boosted by Investment Strategy

Darktrace reported a return to growth for its third quarter boosted by its go-to-market initiatives undertaken early in its financial year and raised its full-year expectations.

---

Pepco Appoints Stephan Borchert CEO

Pepco Group said it has appointed Stephan Borchert as chief executive officer from July, and that revenue rose in its second quarter.

MARKET TALK:

Darktrace Remains Undervalued Despite Sustained Growth

0952 GMT - Darktrace continues to be undervalued versus its U.S. peers, Quilter Cheviot analyst Ben Barringer writes in a research note. The cybersecurity company's third-quarter performance demonstrated consistent strong growth with higher revenue and net annualized recurring revenue turned positive, the analysts says. "Roughly half of this growth is coming from new customers, while the other half is coming from an increase in sales to existing customers," he adds. Shares are up 6.2% at 461.00 pence. (najat.kantouar@wsj.com)

---

European Telecom Dealmaking Might Be on the Rise After Investment Peak

0947 GMT - Mergers and acquisitions among European telecommunications operators might pick up given that their investment is past the peak and EU conditions on a merger between Orange's Spanish business and MasMovil seem more benign than initially assumed, UBS analysts say in a research note. "We think investors are turning more constructive on the outcome of recent Spanish M&A after having initially been cautious," UBS says. Evidence of improving returns in Spain could lead to optimism about mergers and acquisitions and markets such as Italy and Denmark face more tougher competition dynamics than Spain, UBS says. UBS says its most preferred names in the industry are Deutsche Telekom, Telenor, Orange and 1&1, while its least preferred are Tele2 and BT Group. The Stoxx Europe 600 Telecom index falls 1.8%. (adria.calatayud@wsj.com)

---

Currys's Greece Business Disposal Indicates Positive Prospects Ahead

0931 GMT - Currys's completed disposal of its Greece operations brings further positive news, following two guidance upgrades, as proceeds came in as expected, Liberum analysts Adam Tomlinson and Wayne Brown write in a note. The U.K. electronics retailer, which received GBP156 million from the sale, will benefit from a simplified business structure, they highlight. Currys will be able focus on its core U.K. and Ireland and Nordics operations, with the possibility to invest and grow given the stronger balance sheet flexibility, they say. Added to that, the current valuation implies that shares remain far too cheap, "giving no credit for any upside from the current depressed earnings, especially as macro signs improve," they add. Shares are up 0.5% and 14% on a 12-month basis. (michael.susin@wsj.com)

---

Heathrow's March Passenger Numbers Benefit From Travel Remaining a Priority

0903 GMT - Heathrow Airport enjoyed a boost in March thanks to the earlier-than-normal Easter weekend and school holidays as families took the chance to go abroad on vacation, interactive investor analyst Victoria Scholar says in a note. The airport saw almost 7 million passengers travel through it as cost-of-living pressure eased and wage growth remained strong, Scholar says, adding that the U.K.'s economic dynamics improving at the start of 2024 encouraged greater spending in the economy, including on air travel. "Despite pressures from inflation and a weak economic backdrop, individuals and families clearly continue to prioritize their travel plans at the expense of other spending," she says. (anthony.orunagoriainoff@dowjones.com)

---

Pepco's Financial Data Unlikely to Excite Markets

0752 GMT - Pepco's unexciting stock performance in recent months makes analysts expect neutral to slightly negative market reaction to its reported data, Citi analyst Rafal Wiatr says in a note. The discount retailer--which houses Poundland in the U.K. and Dealz and Pepco in continental Europe--posted weak 2Q like-for-like sales, Citi says, while the company's management said the macro environment is still challenging. Still it guided for improved 2H like-for-like sales, with management seeing better profitability and this, combined with lower capex, should lead to stronger cash flow generation, Wiatr says. Furthermore, the announcement of Stephan Borchert as new CEO is surprising, he says. (anthony.orunagoriainoff@dowjones.com)

---

M&S's Extended Partnership With HSBC UK Another Step in Transformation

0731 GMT - Marks & Spencer's extended partnership with HSBC UK shows CEO Stuart Machin is getting through his to-do list, Shore Capital says in a note after the companies confirmed a seven-year agreement to improve the credit and payment proposition of M&S Bank, a subsidiary of HSBC UK. The agreement is a component of extensive workstreams coming through and is another of the many individual actions that make the retailer more modern and relevant in the midterm though the outcome of the partnership won't be transformative for its trading performance, analysts Clive Black and Darren Shirley write. "Modernizing the M&S Bank proposition should be a helpful nudge forward to sequential earnings growth," they say. Shore Capital has M&S as a house stock. Shares are up 58% on a 12-month basis. (elena.vardon@wsj.com)

---

Darktrace Set to Sustain Continued Growth

0725 GMT - Darktrace remains poised to outperform, Berenberg analysts write in a research note. Its third-quarter performance shows the cybersecurity company's ability to maintain sustained strong momentum seen in the second quarter, which is particularly significant given negative year-on-year changes in net annualized recurring revenue added in the previous quarter, the analysts say. Darktrace has the potential to exceed growth and margin expectations with operating leverage to drive a 30% fiscal 2023-fiscal 2026 compound annual growth rate in free cash flow per share, the German brokerage adds. Shares are up 8.5% at 471.90 pence. (najat.kantouar@wsj.com)

Contact: London NewsPlus, Dow Jones Newswires;

(END) Dow Jones Newswires

April 11, 2024 12:10 ET (16:10 GMT)

Copyright (c) 2024 Dow Jones & Company, Inc.