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Friday, June 2, 2023

FTSE set for best week this year

By Kit Rees

LONDON (Reuters) – UK shares were set for their best week since October 2015 with sentiment lifted by positive company results for Coca-Cola HBC (CCH.L) and Standard Life (SL.L), plus a rebound in the battered banking sector.

The blue-chip FTSE 100 (.FTSE) index rose 0.2 percent to 5,981.30 points by 0933 GMT, outperforming the broader European market.

“We’ve (had) a very strong rally, a fair bit of short-covering no doubt … However, now the market is looking to consolidate and regain some form of direction from here,” Dafydd Davies, partner at Charles Hanover Investments, said.

Shares in soft drink bottling company Coca-Cola HBC (CCH.L) jumped 2.7 percent after reporting a profit lift following a return to growth for the first time in five years in its established markets, with good performances in Italy and Greece.

Likewise a strong set of results from insurer and asset manager Standard Life (SL.L) helped hoist its shares by 1.5 percent after it posted an above-forecast pre-tax operating profit of 665 million pounds ($ 952.01 million) for 2015.

Among mid-caps engineering company Essentra (ESNT.L), a supplier of specialty plastic and packaging components, surged over 11 percent after posting strong full year results.

Its like-for-like full year revenue rose 5 percent, excluding unit pipe protection technologies, which have exposure to oil and gas, and its sales surpassed the 1 billion sterling mark for the first time ever.

A rebound in banking shares also helped boost UK shares. The FTSE 350 Banks index rose 0.7 percent, setting the stage for its biggest weekly gain of 2016 so far following a brutal sell-off earlier in February on concerns over the impact of negative interest rates on banks.

“Last week, the spike in the credit default swaps on Deutsche Bank (DBKGn.DE) raised significant concerns of a credit crunch Round Two-type scenario,” said Charles Hanover Investments’ Davies. He added that the ECB saying on Monday it was ready to ease policy further had reassured investors.

(Reporting by Kit Rees; Editing by Mark Heinrich)

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