The FTSE 100 managed to hold onto most of its earlier gains despite a surprise interest rate hike from the Bank of England which pushed up the pound.

Around 70% of the FTSE’s constituents earn in foreign currencies so a rising pound is negative for them.

The central bank was widely expected to keep rates on hold due to the uncertainty created by the Omicron variant. However, it has acted now due to concerns about rising inflation.

Banking stocks were the key beneficiaries with Lloyds (LLOY) up 5.2%, Barclays (BARC) rising by 4.6%, NatWest (NWG) trading 3.3% higher and Virgin Money (VM.) advancing by 2.8%.

At 12.40pm, the FTSE 100 traded 1% higher at 7,243. The pound was 0.7% higher versus the US dollar at $1.3358.

CORPORATE NEWS

Online fashion retailer Boohoo (BOO:AIM) has reduced earnings guidance for 2021-22 citing disruption to international deliveries and pandemic-related cost inflation. The shares slumped 15.7% lower to 116.5p.

Guidance for adjusted earnings before interest, tax, depreciation and amortisation margin has been reduced to 6% to 7%. Previously the market had been guided to a figure of 9% to 9.5%. This equates to an adjusted EBITDA figure of between £117 million and £139 million.

Management now anticipate net sales growth to be 12% to 14%, compared to previous expectations of 20% to 25%.

Shares in Domino’s Pizza (DOM) rallied 24% to 428.2p after announcing it had resolved a long-running dispute with its franchisees. This will enable more store openings and the implementation of new technology.

Management has also indicated that trading in the current year will be in line with expectations. In 2022 it anticipates an acceleration in sales growth. Over the medium term the company believes it will hit the upper end of its £1.6 billion-to-£1.9 billion sales forecast.

AROUND THE MARKET

Fund management group Schroders (SDR) confirmed that it is in advanced talks with Greencoat Capital, a renewables infrastructure manager, about taking a significant stake in the business. The shares edged 2.1% higher to £34.60.

‘Schroders continued to evaluate potential acquisition opportunities in line with its strategy to build a comprehensive private assets platform and enhance its leadership position in sustainability,’ the company added.

Shares in recruitment firm Robert Walters (RWA) moved 1.6% higher to 770p after it lifted its full-year expectations. This followed a strong trading in the fourth quarter.

The group now expects pre-tax profit for the year to the end of December 2021 to be ‘comfortably ahead’ of current market expectations.

Shares in unbranded consumer goods maker McBride (MCB) fell 5.7% to 55.8p as it warned rising costs would result in losses 70% higher than it was guiding for two months ago.

And ProCook (PROC) warmed up 3% to 147p after the direct-to-consumer kitchenware brand posted encouraging maiden interim results following its initial public offering last month.

ProCook generated strong revenue growth in the half to 17 October as the company continued to gobble up market share, although underlying pre-tax profits came in 11% lower, reflecting more normal levels of digital marketing spend and as the company invested to drive growth.

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Issue Date: 16 Dec 2021