UK stocks gave up all of their early gains on Monday as US index futures pointed lower, driven by rising bond yields.

Having at one stage tacked on 70 points or 1%, by midday the FTSE 100 index was trading completely flat at 7,052 points as investors turned their attention away from corporate earnings and back to concerns over higher inflation, supply chain constraints and disruptions to fuel supplies.

Brent crude traded 62 cents firmer at $78.71 per barrel, its highest level in over a year, as rising demand around the world in the lead-up to winter pushed energy prices higher across the board.

In response, shares in BP (BP.) gained 2.9% to 329p and Royal Dutch Shell (RDSB) added 3.2% to £15.78.

COMPANY NEWS

Aero engine manufacturer Rolls-Royce (RR.) was the top FTSE performer after announcing it had won a contract to supply engines for the iconic B-52 Stratofortress for the US Air Force for the next 30 years.

The firm called the contract a ‘major win’, although it didn’t reveal the commercial details. Shares gained 11% to 147p

Shares in serviced office group IWG (IWG) jumped 5% to 301p after news reports over the weekend suggested founder and chief executive Mark Dixon was considering breaking the firm up and listing its corporate booking app on the US market.

The company, which owns the Regus and Spaces office brands, could list its Worka comparison app through an initial public offering or a merger with a special purpose acquisition company (SPAC), according to Sky News.

United Utilities (UU.), which supplies water to the North West of England, said trading in the first half was in line with its expectations, although it noted household consumption remained high as many customers were continuing to work from home, driving up operating profits. Shares were up 1.3% at 994p

Private equity and infrastructure company 3i (III) reported good progress in its investment portfolio in the first half.

Dutch retailer Action, the fund's largest holding, posted a 20% increase in sales year-to-date to more than €4.5 billion. 3i said it expected further strong progress in the firm's EBITDA going into the year-end. Shares fell 1.9% to £12.75.

Generic pharmaceutical company Hikma (HIK) revealed it had agreed to acquire US based generic sterile injectable company Custopharm for up to $425 million.

Under the terms of the deal, Hikma will pay an initial cash consideration of $375 million, with a further $50 million in contingent consideration payable upon the achievement of certain commercial milestones. Shares were 1.9% higher at £24.12

Insurance company Prudential (PRU) set the offer price for its Hong Kong raising at HK$143.80 ($18.47) each, the company said, fleshing out its announcement of 20 September.

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Issue Date: 27 Sep 2021