UPDATE 1-FTSE 100 nears record high as miners and Micro Focus drive gains

Reuters

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    * FTSE 100, mid-caps both up 0.2 pct at close
    * Burberry rises on forecast-beating results
    * Contract win pushes Micro Focus up 6.2 pct
    * Crest Nicholson margin cut drives shares down 12.8 pct
    * Paddy Power Betfair in talks to buy Fanduel in U.S.
expansion

 (Adds detail, closing prices)
    By Helen Reid
    LONDON, May 16 (Reuters) - Strong results from leading
software company Micro Focus and a rally among mining stocks
drove Britain's FTSE 100 higher on Wednesday, while Crest
Nicholson and mid-cap pub companies suffered sharp losses. 
    The FTSE 100  .FTSE  was up 0.2 percent at at 7,734.20
points by the close, flirting with the record high reached in
mid-January. 
    Micro Focus  MCRO.L  was top of the heap, jumping 6.2
percent to a two-month high after the software company won a new
$40 million licensing deal earlier than expected, saying it
would bolster first-half revenue. urn:newsml:reuters.com:*:nL5N1SN19N
    The share price reached levels last seen in mid-March when a
profit warning dented the stock. 
    "We see this as positive for sentiment, but only helping to
reduce the extent to which H2 had to improve versus H1 to meet
full-year guidance, rather than placing any upward pressure on
numbers," Investec analysts said. 
    Mining stocks Anglo American  AAL.L , Glencore  GLEN.L  and
Rio Tinto  RIO.L  also pushed the index higher.  urn:newsml:reuters.com:*:nL3N1SN347
    Burberry  BRBY.L  shares rose 3.6 percent after the luxury
group beat market forecasts as it took the first steps to
reinvigorate the brand.  urn:newsml:reuters.com:*:nL5N1SN19N
    Overall the UK earnings season has driven sharp share price
reactions, with a negative skew.
    "Those companies that are disappointing relative to
expectations are being treated pretty harshly by the market, and
conversely those with very low expectations and particularly a
big short position are being relatively rewarded for at least
meeting expectations," said Guy Ellison, head of UK equities at
Investec. 
    Several mid-cap stocks registered sharp falls after results.
    Homebuilder Crest Nicholson  CRST.L  sank 12.8 percent to
the bottom of the FTSE 250 after saying rising construction
costs were hurting the pricing of its homes, forcing it to cut
its full-year operating margin forecast.  urn:newsml:reuters.com:*:nL3N1SN2TB
    Rising costs were also cited by pub firm Mitchells & Butlers
 MAB.L  as a reason for its profit dip, sending its shares down
7.2 percent.  urn:newsml:reuters.com:*:nL3N1SN2UQ
    Peer Marston's  MARS.L  also fell, sliding by 12.2 percent
after reporting half-year results.  urn:newsml:reuters.com:*:nL3N1SN2XC
    "Anything consumer-facing that's having to pay UK wages and
UK rates is facing cost inflation," said Investec's Ellison.
    Meanwhile, M&A news continued to drive shares. 
    Paddy Power Betfair  PPB.L  rose 6.3 percent after the
bookmaker said it was in discussions to combine its U.S.
business and fantasy sports company Fanduel to target the U.S.
after a Supreme Court ruling on Monday paved the way for states
to legalise sports gambling.  urn:newsml:reuters.com:*:nASO0004VG
    Overall earnings from UK companies have been encouraging
this quarter, while macroeconomic data has been poor. 
    "It seems the first quarter for UK companies was better than
for the UK economy," said Caroline Simmons, deputy head of the
UK chief investment office at UBS Wealth Management. 
    "We expect a modest upside over the next six months, but we
don't expect it to outperform other markets." 
    Analysts are downgrading earnings expectations for the UK,
however, as the results season draws to a close. 
    

    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
FTSE 100 earnings revisions    https://reut.rs/2rKAvr8
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 (Reporting by Helen Reid and Kit Rees
Editing by David Goodman)
 ((kit.rees@thomsonreuters.com; +44 207 542 2784;))
 
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