LONDON MARKETS: U.K. Stocks Flirt With 4-month High As Burberry, Micro Focus Rally
May 16 2018 - 4:44AM
Dow Jones News
By Sara Sjolin, MarketWatch
Paddy Power rises after M&A chatter
U.K. stocks moved higher on Wednesday, heading for a four-month
closing high as shares of Micro Focus International and Burberry
climbed after well-received earnings reports.
The beaten-down pound, which has still struggled to rebound,
also helped lift the London benchmark.
What are markets doing?
The FTSE 100 index rose 0.2% to 7,738.62, on track for its
highest close since Jan. 16, according to FactSet data.
The pound traded at $1.3505, unchanged from late Tuesday in New
York. Sterling is now down almost 6% against the dollar over the
past month. A weaker pound tends to boost the FTSE 100 as the
index's components make the bulk of their earnings overseas, with a
softening sterling lifting revenues when converted back into the
U.K. currency.
What is driving the market?
In the absence of any major macroeconomic data releases traders
instead looked to the latest corporate news.
Shares of Micro Focus International PLC (MCRO.LN) jumped 8.7% to
lead the FTSE 100 after the software group said it expects revenue
for the first fiscal half of 2018 to be better than forecast due to
an unusually large license deal of about $40 million that closed
earlier than expected.
The company in March SHYannounced its then-CEO's resignation and
warned of a revenue drop, spurring a big selloff that bulls viewed
as overdone
(http://www.marketwatch.com/story/its-half-off-for-this-hewlett-packard-spin-offs-stock-why-thats-still-not-a-great-deal-2018-03-24).
In other upbeat corporate news on Wednesday, shares of Burberry
Group PLC (BRBY.LN)(BRBY.LN) rose 1.7% after the luxury goods
company reported a rise in full-year profit
(http://www.marketwatch.com/story/burberry-to-start-150-million-share-buyback-2018-05-16)
and said it will start a new 150 million pound ($202.8 million)
share buyback.
More broadly on the global financial scene, traders watched the
return of geopolitical tensions after North Korea threatened to
call off a historic meeting
(http://www.marketwatch.com/story/north-korea-threatens-to-call-off-us-summit-if-washington-insists-on-denuclearization-2018-05-16)
with the U.S. A senior North Korean official said Pyongyang doesn't
want an upcoming summit to focus solely on denuclearization. U.S.
President Donald Trump is scheduled to meet North Korean leader Kim
Jong Un on June 12 in Singapore.
Other stock movers
Shares of Paddy Power Betfair PLC rose 3% after the gambling
company confirmed it is in talks about a potential merger of its
U.S. business with FanDuel Inc
(http://www.marketwatch.com/story/paddy-power-fanduel-in-talks-about-us-business-2018-05-16).
Paddy Power shares are now up 13% this week, boosted by U.S.
Supreme Court ruling on Monday that could open for sports betting
around the country.
Mondi PLC (MND.JO) climbed 1.8% after the paper and packaging
company said underlying operating profit rose 15%
(http://www.marketwatch.com/story/mondi-quarterly-underlying-profit-rises-2018-05-16)
in the first quarter and its business outlook remains positive.
(END) Dow Jones Newswires
May 16, 2018 04:29 ET (08:29 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
FTSE 100
Index Chart
From Apr 2024 to May 2024
FTSE 100
Index Chart
From May 2023 to May 2024