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Highlights
- The UK stock market is trading lower as investors anticipate the UK’s energy crisis could become worst due to the recent rise in crude oil and gas prices.
- The rise in energy prices will have a direct impact on the country’s inflation, which is already at a 10-year high of 3.2%.
The UK stock market is under pressure as investors anticipate the energy crisis to worsen due to the continued rise in crude oil and gas prices. Energy is one of the constituents of the inflation basket and has a bigger weightage. Hence, an increase in the energy prices will directly impact the country’s inflation, which is already at a 10-year high at 3.2% and well above the central bank’s target of 2%.
A rise in inflation and increases in energy prices could push the Central Bank to take steps to reduce price rise, leading to a rise in stock market volatility.
© 2021 Kalkine Media
Let us look at 3 FTSE listed stocks that are in focus today:
Greggs Plc (LON: GRG)
The company operates in the food retailing segment offering a range of bakery products to its customers. The company sells its products through its retail shops and franchisee stores which are located across the country. The company has over 2000 shops and more than 300 franchised shops.
The company, in its third-quarter update reported a 3.5% rise in the company managed shop sales compared to the same period in 2019. The new menu at its stores was well received by the customers, which includes vegan-friendly food and drinks. The company has opened 68 new shops during the ongoing year, taking the total count to over 2100 retail outlets throughout the country. However, the company continues to face labour shortages and supply chain disruption. In addition, it expects increases in the cost of raw materials and products in the coming months because of the upsurge in food inflation.
Greggs Plc shares trade at GBX 3123, down by 2.16% on 6 October at 8:45 am GMT+1 with a market cap of £3,251 million.
Melrose Industries Plc (LON: MRO)
The company operates in diversified industrial segments like aerospace, automotive, metallurgy and other businesses having major operations in the United Kingdom and European countries.
The company reported a significant rise in the aerospace segment revenue, which was up by 16% compared to the same period last year, mainly due to business restructuring during the three months ended 30 September 2021. In addition, the company expects further pick up in the business segment in the last quarter of 2021. However, the Automotive and Powder Metallurgy segment faces certain problems like supply chain issues that could impact the company. Nevertheless, the company still expects positive cash flow from all businesses.
Melrose Industries Plc shares trade at GBX 164, down by 2.99% on 6 October at 8:45 am GMT+1 with a market cap of £7,391 million.
Gulf Keystone Petroleum Ltd (LON:GKP)
The company operates in the oil and gas sector, focusing on the exploration and production of oil and gas assets located in Iraq. It also provides engineering support services.
The company’s revenue and profitability are expected to benefit from the recent rise in international crude oil prices. In the first half of 2021, the company sold its crude oil output at realized prices of USD 43.7/barrel, up by 129% compared to the same period last year, and it is expected to rise further in the coming months due to strong growth in crude oil prices. Also, the company expects average gross production in the range of 40,000 – 44,000 bopd.
Gulf Keystone declared an interim dividend of USD 50 million to be paid on 8 October 2021 and expects to distribute further dividends to shareholders if the business continues to generate strong cash flow.
Gulf Keystone Petroleum Ltd shares trade at GBX 213.50, up by 0.47% on 6 October at 8:45 am GMT+1 with a market cap of £454 million.
