MARKET REPORT: ‘Milder’ recession puts banks on firmer footing

Bank stocks gained as analysts said the sector was more than capable of weathering a likely superficial recession.

In a note to clients, Citi painted a more optimistic picture of the outlook for the UK economy and the country’s largest lenders.

“Lower gas prices, additional fiscal stimulus and lower market rates have all provided much-needed support to the UK economy, where a recession is now likely to be shorter and milder,” the Citi report said.

“British banks are also entering this recession with healthy balance sheets, excess capital and improving profitability.”

It marked a U-turn for Citi, which published a report last summer suggesting inflation in the UK could reach 18 percent early this year.

Shares in Lloyds rose 1.2 per cent, or 0.62p, to 53.45p, NatWest gained 1.3 per cent, or 3.8p, to 304p, Barclays climbed 1.2 per cent, or 2.3p, to 188 .84p, HSBC added 1.5 per cent, or 9p, to 605p and Standard Chartered increased 1.7 per cent, or 11.2p, to 682.6p.

The FTSE 100 rose 0.36 percent, or 28 points, to 7864.71, but the FTSE 250 fell 1.08 percent, or 220.38 points, to 20189.

Morgan Advanced Materials warned annual profits would be lower than hoped after a recent cyberattack.

The company FTSE 250, which makes ceramics for metal smelters, estimated it could cost up to £12 million to solve the problem.

As a result, Morgan Advanced Materials estimated that earnings for 2023 could be about 10 to 15 percent below previous expectations.

Stock Watch – Zinc Media Group

Shares in Zinc Media soared after a great update from the company behind the BBC series Putin vs The West.

The manufacturing company expects revenue and profit for 2022 to be ahead of market forecasts.

And it has already secured £15 million in revenue for 2023, up from £9 million a year earlier.

“This is the strongest start to a fiscal year during my time at Zinc,” said CEO Mark Browning.

Shares rose 16.8 percent, or 14 pence, to 97.5 pence.

It added that it “does not expect the incident to have a material long-term impact.”

But the group, which expected to publish its 2022 results on February 28, is now aiming to do so by the end of April. Shares fell 4.9 percent, or 15.5 pence, to 300.5 pence.

The update came just a day after fellow midcap firm Vesuvius (2.2 percent, or 8.8 pence, to 396.2 pence) suffered a cyberattack.

Auction Technology was on the rise after acquiring a US real estate sales site.

The FTSE 250 company, which acts as a marketplace connecting bidders to auction houses to buy items such as antiques, sofas and paintings, took on Missouri-based ESN for £33 million. Shares rose 9.5 percent, or 65 pence, to 748 pence.

The other way went Ukraine-focused Ferrexpo. The miner, which produces and exports iron ore pellets, fell 9.8 percent, or 15 pence, to 137.5 pence after a Ukrainian court issued an order freezing the bank accounts of one of its subsidiaries.

It is part of an investigation into possible underpayment of iron ore royalties by Ferrexpo Poltava Mining between 2018 and 2021.

Ferrexpo said it rejected all allegations and will appeal the court’s decision. There was a mini-reshuffle of the boardroom at Victorian Plumbing.

The bathroom retailer has appointed Daniel Barton, the group’s chief financial officer, as chief financial officer after Paul Meehan said he wanted to step down from his position to pursue other opportunities.

Barton, who joined Victorian Plumbing last August, will begin his new job on April 1.

Shares rose 0.3 percent, or 0.3 pence, to 92.5 pence.

Luxury wallpaper and textile company Sanderson Design Group saw shares fall after its European operations were impacted by the exit from Russia.

The group, which has showrooms in London, New York, Chicago, Amsterdam and Dubai, said total sales for the full year to January 31 remained stable at £112 million.

Sanderson touted 18 percent growth in North America, but these gains were offset by a slump in Northern Europe after ending trading in Russia, where it had previously recorded £1.8m in sales. Shares fell 7.6 percent, or 10 pence, to 121.5 pence.