MARKET REPORT: United Utilities Stock Soars on Analyst Update

United Utilities shares rose after an upgrade from City analysts.

With the water companies back in the headlines following a £158m fine imposed by regulator Ofwat, a report by RBC Capital Markets gave its backing to the company.

They raised their rating on United Utilities from “sector perform” to “outperform,” meaning they believe the stock will outperform its rivals.

RBC downgraded South West Water owner Pennon, citing pressure on its balance sheet. Severn Trent’s rating remained unchanged.

United Utilities rose 1.4 per cent, or 14.5p, to 1,020.5p, but Pennon fell 1.4 per cent, or 8p, to 551p, while Severn Trent rose 0.4 per cent. cent, or 11 pence, to 2524 pence. The report came a day after Ofwat told firms to return £158m to customers through lower bills after failing to meet key targets.

In the broader market, the FTSE 100 rose 0.65 per cent, or 53.13 points, to 8,243.74 and the FTSE 250 rose 0.93 per cent, or 191.18 points, to 20,822.38. The rally came after a brutal session in China in which stocks suffered their biggest drop in 27 years after traders were left disappointed by Beijing’s plans to revive the world’s second-largest economy.

The Shenzhen Composite Index fell 8.6 percent in its sharpest decline since May 1997.

The Shanghai Composite Index fell 6.6 percent and the benchmark CSI 300 Index fell 7.1 percent, the biggest drop since early 2020 during the Covid outbreak.

Stephen Innes of SPI Asset Management said: “Let’s call it what it is: an abject failure, as Chinese shares opened sharply lower, sending a clear signal that the market is no longer buying half-hearted promises.”

Marks & Spencer added 3%, or 11p, to 382.9p after Deutsche Numis analysts advised clients to buy the shares. The broker said the High Street stalwart “continues to do things well” with its food business, a rise in clothing sales and strong growth in its Ocado Retail joint venture.

Carnival was swept up in an industry-wide rally after analysts at Citi upgraded their rating on Norwegian Cruise Line, lifting it 8.3 per cent, or 108 pence, to 1,402.5 pence.

Exhibition giant Informa has completed a £1.2bn takeover of rival Ascential after the pair agreed a 568p-a-share deal in July, lifting it 1.8 per cent, or 14.6p, to 816 pence. Trading platform CMC Markets has seen an increase in revenue over the past six months following a period of strong trading and a cost-cutting programme.

The London-listed company said its net operating income appears to have increased by 45 percent to £180 million.

CMC Markets has been trying to keep costs under control after it reported a £2m loss last year. The shares fell 0.5 per cent, or 1.5p, to 303.5p.

But Vistry remained under pressure a day after the housebuilder revealed its annual profits would be hit by £115m, saying it had underestimated construction costs on nine developments by around a tenth.

Shares in the housebuilder, which fell 24.3 per cent following the news on Tuesday, fell another 2 per cent, or 19p, to 944.5p yesterday.