UK stocks reversed Monday’s gains as investors began to factor in the impact of rising energy prices on top of supply chain disruption on corporate profit margins.

Overnight, US stocks fell back on growing fears of inflation with the weakness spreading to Asian markets which broke their three-day winning run. Technology stocks were among the biggest fallers in both regions.

Oil prices remained firm with Brent crude futures holding at $84 per barrel while sterling pushed above $1.36, adding to the headwinds facing export-reliant companies.

By 8.45am the FTSE 100 index was 55 points or 0.8% lower at 7,092, weighed down by profit-taking in miners and financials after their gains of the last few days.

COMPANY NEWS

Betting firm Entain (ENT) reported a 4% increase in net gaming revenue for the third quarter to September, driven once again by a 10% increase in its online business.

However, shares drifted 0.5% to £20.97 after the firm left its full year earnings target unchanged.

Shares in low-cost airline EasyJet (EZJ) ticked 0.1% higher to 649p after the firm posted a positive fourth quarter trading update with headline losses halving from a year ago and positive operating cash flow of £40 million.

The firm expects capacity to reach 70% of 2019 levels this quarter and said bookings for the first half of the new financial year were already double last year’s figure.

Bus and coach operator Stagecoach (SGC) posted a steady trading update for the quarter ended in September showing journey numbers had recovered to 70% of 2019 levels, although it kept its full year guidance unchanged, leaving the shares trading 0.5% lower at 82.5p.

MID- & SMALL-CAP NEWS

Asset manager Liontrust (LIO) recorded net inflows of £1.1 billion in the three months to September to take assets under management and advice to £35.7 billion, lifting shares 0.1% to £19.92.

The Economic Advantage team saw its assets top £10 billion during the quarter while sustainable funds also recorded inflows.

Banknote printer De La Rue (DLAR) said first half trading in its currency and authentication divisions had been ‘positive’, but an unchanged full year outlook sent the shares 0.2% lower to 166p.

Fashion retailer French Connection (FCCN) delivered a Covid-impacted first half trading update with revenues down 21% to £40.2 million, although underlying losses were reduced to £0.9 million compared with £3.6 million a year ago. Shares were unchanged at 29p.

Shares in platinum group metals mining firm Tharisa (THS) rose 2% to 127p after it reported the best quarterly production in the history of its South African mine in the final quarter to September, following on from record mining and processing in the previous quarter.

Property portal OnTheMarket (OTMP:AIM) posted a 46% increase in first half revenues to £14.9 million driven by a 52% rise in average revenue per advertiser.

The firm raised its full year revenue forecast to slightly ahead of expectations, and despite marketing costs more than doubling in the first half said it saw operating profits coming in ‘substantially ahead of expectations’, sending shares up 6% to 98p.

Telecom testing firm Calnex Solutions (CLX:AIM) reported ‘continued strong levels of trading’ in the first half of the year and said it expected the trend to continue through the second half of the year.

As a result, the company now sees revenues and profits ‘materially ahead of previous expectations’, boosting the shares by 10% to 126p.

There was less positive news from building materials group Marley, which pulled its planned initial public offering despite ‘considerable’ institutional interest saying the current market volatility was ‘not in the best interests of the group and its stakeholders’.

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Issue Date: 12 Oct 2021