10th Mar 2025 07:54
(Alliance News) - London's FTSE 100 is called to open slightly higher, despite a softer Chinese inflation reading stoking growth worries for the Asian economy.
China's consumer price index fell 0.7% in February, according to data released on Sunday by China's National Bureau of Statistics.
This is the first time in a year that the consumer price index has sunk to deflationary territory, and represented a steeper decline than the 0.4% forecast by a Bloomberg survey.
It also reversed the 0.5% uptick recorded in January, when a surge in spending during the Lunar New Year boosted inflation to its highest rate in months.
China has been battling falling consumption rates since the end of the pandemic. Adding to the pressure is US President Donald Trump's introduction of sweeping tariffs on Chinese products.
"The week starts on a sharp negative note for the Chinese stocks, as the latest inflation update showed that consumer prices in China fell the most in more than a year," Swissquote analyst Ipek Ozkardeskaya commented.
"Overall, the week is expected to bring more tariffs: the Chinese tariffs on US agricultural and some Canadian products will start today, while the US steel and aluminium tariffs will be live from Wednesday."
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: called up 0.1% at 8,688.68
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Hang Seng: down 1.8% at 23,789.76
Nikkei 225: up 0.4% at 37,028.27
S&P/ASX 200: up 0.2% at 7,962.30
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DJIA: closed up 222.64 points, 0.5%, at 42,801.72
S&P 500: closed up 0.6% at 5,770.20
Nasdaq Composite: closed up 0.7% at 18,196.22
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EUR: lower at USD1.0834 (USD1.0851)
GBP: lower at USD1.2913 (USD1.2920)
USD: higher at JPY147.62 (JPY147.34)
GOLD: flat at USD2,914.47 per ounce (USD2,914.44)
(Brent): lower at USD70.37 a barrel (USD70.47)
(changes since previous London equities close)
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ECONOMICS
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Monday's key economic events still to come:
11:00 GMT Ireland industrial production
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UK Prime Minister Keir Starmer has hailed the EU's "historic step forward" as he spoke to leaders after the bloc backed moves to free up hundreds of billions of euros for security. In a phone call with the president of the European Council, the president of the European Commission and the leaders of Canada, Turkey, Norway and Iceland on Friday, the prime minister also welcomed the prospect of talks next week in Saudi Arabia after they were confirmed by Volodymyr Zelensky. Issuing a readout of the call, a Downing Street spokeswoman said: "The prime minister applauded the progress the EU had made at the European Council yesterday, saying it was a historic step forward and another sign of Europe stepping up." Closer collaboration between the EU, its partners and our combined defence industrial base was vital as Europe stepped up to counter egregious Russian aggression, the prime minister added. Updating on the intensive diplomacy between the US, UK, France and Ukraine, the prime minister welcomed the potential for peace talks in Saudi Arabia next week. "The leaders also discussed the "coalition of the willing" and looked ahead to the chiefs of defence meeting in Paris on Tuesday." It would be another important moment to drive forward planning, they agreed. "The leaders agreed to stay in close touch." On Thursday, European leaders had backed new defence spending plans aimed at freeing up billions of euros as the bloc grapples with the prospect of Donald Trump reducing security assistance for Europe. The 27 EU leaders signed off a move to loosen budget restrictions so that willing EU countries can increase their military spending, which could free up around EUR650 billion. It comes as Trump said he was "strongly considering" sanctions on Russia until a final peace deal is reached. The US president threatened on Friday to place tariffs on Vladimir Putin's country, in response to Russia "absolutely pounding" Ukraine.
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BROKER RATING CHANGES
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Barclays cuts BT Group to 'underweight' (equal-weight) - price target 150 (190) pence
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Berenberg cuts BAE Systems to 'hold' (buy) - price target 1,700 (1,440) pence
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COMPANIES - FTSE 100
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WPP and Bain Capital are plotting the break-up of market research group Kantar, the Financial Times reported. It is a departure from the stock market floatation plan advertising agency WPP and private equity firm Bain previously had for Kantar, the FT noted. The FT reported that a "person close to the process" said a sale of Kantar would be a faster and more certain way for WPP and Bain to cash in on their investment. Bain bought a 60% stake in Kantar back in 2019. WPP had a 40% stake.
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COMPANIES - FTSE 250
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Care property investor and developer Assura said it would be "minded to accept" a GBP1.61 billion cash bid from a private equity consortium, should one be made. It also noted it received a takeover approach from fellow London listing Primary Health Properties. Assura said it received an indicative proposal from Kohlberg Kravis Roberts & Co Partners and Stonepeak Partners at 49.4 pence per share. It gives Assura a GBP1.61 billion valuation on a fully diluted basis. The price is a 32% premium to Assura's undisturbed share price of 37.4p on February 13, the day prior to Assura announcing it received an unsolicited approach from KKR and USS Investment Management. KKR noted that tilt valued Assura at GBP1.56 billion and also said in February that it was considering if there is any "merit" in engaging with Assura's board. On the latest proposal, Assura said: "The consortium of KKR and Stonepeak, both long-term infrastructure investors, recognises that Assura's leading platform and portfolio are important social infrastructure assets for the UK, and has indicated its intention to deploy further capital to the portfolio to continue its growth." Assura said it also received an indicative, non-binding proposal from Primary Health Properties for an all-share tie-up. That proposal values Assura at 43p per share, it noted. Assura said the private equity cash bid proposal is more attractive, however. "Therefore, the board has rejected the PHP proposal," it said.
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Clarkson reported record annual profit despite "another year of disruption" in 2024. The provider of shipping services said pretax profit in 2024 rose 3.0% to GBP112.1 million from GBP108.8 million. On an underlying basis, it spiked 5.6% to a record high of GBP115.3 million from GBP109.2 million. Revenue improved 3.4% to GBP661.4 million from GBP639.4 million. "2024 was another year of disruption, complexity and opportunity for global shipping markets and against this backdrop I am immensely proud of the hard work and dedication of all my colleagues in producing another record result. The geo-political outlook remains uncertain as we enter 2025, with ongoing regional conflicts and trade tensions creating uncertainty for markets reflected by freight rates and asset values currently lower than 2024. The resolution or continuation of these events during the year will provide potential headwinds and tailwinds to the group's performance as we support our clients through this complexity," Chief Executive Officer Andi Case said. Clarkson lifted its final dividend by 6.9% to 77 pence from 72p. Its total dividend was also 6.9% higher at 109p from 102p. Looking ahead, it said: "The opportunity before us remains significant, as commodity demands combined with energy security and environmental factors, provide a complex backdrop for market growth in the medium term. However, following a year of extensive political change, ongoing conflicts in the Middle East and Russia-Ukraine, adding further complexities, markets have softened as economies grapple with the immediate impacts of this phase of change."
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Takeaway delivery company Deliveroo said it has exited the Hong Kong market, after selling some assets to Delivery Hero-owned foodpanda and closing others. Deliveroo said there are "several dynamics specific to the Hong Kong market" which led to it mull its options there. Deliveroo said it would serve "shareholders' best interests to continue to operate in Hong Kong". It added: "Deliveroo has decided to exit its Hong Kong operations through a sale of certain assets to foodpanda and the closure of other assets. Deliveroo Hong Kong has nominated liquidators to manage closure of the Hong Kong business and the remainder of its assets in the most efficient way possible." In 2024, Hong Kong accounted for 5% of Deliveroo's gross transaction value but had a 5 percentage point negative impact on the International division's GTV growth. The market was adjusted earnings before interest, tax, depreciation and amortisation negative.
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Great Portland Estates hailed its largest "fully managed deal to date", letting office space to retailer Next in the Fitzrovia area of London. The space has been let on a five-year term and ahead of the estimated rental value, the property investor said. "Next has required additional office space to complement their existing London offices and will be moving into the building at the end of March to occupy a total of four floors, including the lower ground, duplex, third and fourth floors," GPE explained. "It is located in Fitzrovia, next door to GPE's recent acquisition Whittington House and opposite another GPE fully managed building, the Courtyard; which recently achieved planning permission. Together these buildings form an appealing cluster of premium workspaces within walking distance of the Elizabeth line."
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OTHER COMPANIES
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Engineering firm Mincon reported a decline in annual earnings during what was a "tough" 2024. Pretax profit from continuing operations from 38% to EUR5.49 billion from EUR8.90 billion in 2023. Revenue declined 8.0% to EUR144.4 million from EUR156.9 million. CEO Joe Purcell said: "2024 has been a tough year for Mincon but I am pleased to report that we see an improved global environment in the year ahead for all our target markets. The weakness we saw at the end of 2023, continued through H1 2024, but with the moderation of global interest rates and a general uptick in business confidence, we did see an increase in activity in H2 2024 which led to a stronger performance, and this improvement has continued into early 2025. Our root and branch review has resulted in the closure of our business in Sheffield. This difficult decision was taken due to cost inflation and a lopsided tariff structure in Europe that meant we could not compete with the products which were manufactured there. It should be noted that the closure was not a reflection of the quality and workmanship of the products made at the plant but simply a matter of market dynamics." It maintained its final dividend at 1.05 cents per share and the total payout at 2.10 cents.
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By Eric Cunha, Alliance News news editor
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