The UK equity markets started Wednesday’s trading session on a firmer footing, recovering some of yesterday’s losses, despite a poor performance from US equity markets.

Asian markets were mixed with the Shenzhen and Nikkei indices both recording losses. The Hang Seng Index managed to record a modest gain.

Concerns regarding supply chain disruptions, and elevated oil price and the potential for longer term inflation remain.

Recent consumer confidence figures on both sides of the Atlantic have been indicative of a potential retardation in the economic growth rate.

UK investors will be focused on the lending figures and mortgage approvals data due out later this morning. The FTSE 100 was trading 0.75% higher at 7080.52 and the FTSE 250 was trading 0.94% higher at 23,345.56.

Corporate News:

Fashion retailer Next (NXT) saw its share price jump to the top of the FTSE 100 leaderboard after upping full year guidance alongside rising interim profits.

Shares in the company rallied nearly 3% in early trade to £83.06 as investors welcomed news that Next is reaping the benefits of post-pandemic store re-openings. Profit for the six months to 31 July rose 5.9%, compared to 2019 figures, to £346.7 million, driven by a 7.6% increase in sales, which hit £2.2 billion.

Next is guiding towards a pre-tax profit for the full year of £800 million, up 6.9% versus 2019 and £36 million ahead of its previous guidance. The company has also declared a special dividend of 110p per share.

Investors will now turn their attention to the key Christmas run-in, with Next set to report an update on 6 January 2022.

Pharmaceutical company AstraZeneca (AZN) revealed that its recently acquired Alexion business will purchase the remaining shares of Caelum Biosciences offering a potential treatment for amyloidosis. The acquisition is expected to close on 5 October 2021, with an agreed option price of around $150 million.

There is potential for additional payments of up to $350 million if regulatory and commercial milestones are met. AstraZeneca shares were trading 2.6% higher at £86.97.

TRAVEL TROUBLE REMAINS

Airport food and travel owner SSP (SSPG) was one of the heavier losers on Wednesday, its shares slumping nearly 4% to 278.2p, after issuing a distinctly cautious outlook despite revealing positive earnings in the fourth quarter of the financial year. Revenue in the latest week of the year was 53% of 2019 levels. Fourth quarter recovery had enabled the group to re-open 60% of its outlets, up from 30% at the end of the first half of 2021.

‘Reflecting this, our expectation for profit conversion on reduced sales in 2022 compared to 2019 continues to be at the upper end of a range of 25% to 30%,’ the company said. Shares were trading -3.2% at 280.3p

Power utility SSE (SSE) has agreed to form a joint venture with Pacifico Energy to pursue offshore wind developments in Japan.

The pact involved the acquisition by SSE of 80% of an offshore wind development platform from the Japanese company for $208 million. SSE Renewables has the largest offshore wind pipeline across UK and Ireland at 7GW and is currently leading the construction of more offshore wind than any company in the world.

It has a renewable output target of 30TWh a year by 2030, which it expects to exceed and has clear aspirations to reach a run rate of at least 1GW of new assets a year during the second half of this decade. Shares in SSE were trading marginally lower, down 0.3% at £15.90.

Online auctions platform Auction Technology (ATG) has received full antitrust and regulatory clearances for its acquisition of Live Auctioneers, lifting its share price around 2% to £13.18.

The $525 million deal was announced in June and is expected to close soon.

‘Through further building our presence in the large and rapidly growing US arts and antiques market, and adding technology capability and scale, we look forward to continuing to strengthen our partnership with auctioneers in the years ahead,' said CEO John-Paul Savant.

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Issue Date: 29 Sep 2021