14th Mar 2024 07:52
(Alliance News) - London's FTSE 100 is set to tread water after the opening bell sounds on Thursday, as investors look to a batch of US data to come in the early afternoon.
At 1230 GMT, there is the weekly initial jobless claims reading, as well as producer price and retail sales data.
Swissquote analyst Ipek Ozkardeskaya commented: "Retail sales are expected to have rebounded following a relatively weak read in January, while producer prices are expected to have risen in February, fuelled by higher energy prices. Normally, I would expect higher-than-expected retail sales and higher-than-expected PPI data to temper the Fed rate cut bets, back a further rise in US yields and the dollar, and trigger a downside correction in the US stock markets."
The producer price index numbers are expected to show the pace of year-on-year US producer price growth picked up to 1.1% on in February, according to FXStreet cited consensus, from 0.9% in January.
Retail sales are expected to have risen 0.8% on month in February, following a 0.8% fall in January from December.
In early UK corporate news, AstraZeneca announced a USD1.05 billion deal to boost its rare disease pipeline, Halma backed its outlook and Trainline said its revenue growth was better-than-forecast.
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 just 1.0 points at 7,773.17
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Hang Seng: down 0.9% at 16,934.40
Nikkei 225: up 0.3% at 38,794.36
S&P/ASX 200: closed down 0.2% at 7,713.60
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DJIA: closed up 37.83 points, 0.1%, at 39,043.32
S&P 500: closed down 0.2% at 5,165.31
Nasdaq Composite: closed down 0.5% at 16,177.77
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EUR: lower at USD1.0934 (USD1.0945)
GBP: flat at USD1.2798 (USD1.2798)
USD: up at JPY147.92 (JPY147.70)
GOLD: down at USD2,167.96 per ounce (USD2,173.55)
(Brent): up at USD84.08 a barrel (USD83.50)
(changes since previous London equities close)
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ECONOMICS
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Thursday's key economic events still to come:
11:30 GMT Ireland CPI
12:30 GMT US initial jobless claims
12:30 GMT US PPI
12:30 GMT US retail sales
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A "solid rise" in sellers in the UK putting their homes on the market was seen in February, with the strongest upswing recorded since autumn 2020, according to surveyors. A net balance of 21% of property professionals reported new instructions to sell rising rather than falling, marking the strongest reading since October 2020, the Royal Institution of Chartered Surveyors said. This finding is in contrast to the continuously negative picture cited throughout 2023, Rics added. On average, estate agents' branches had 42 properties, the highest number recorded by Rics since February 2021, with those surveyed noting an increase in market appraisals during the month, compared with the same period last year. Across the UK, new buyer inquiries grew for the second month in a row, with a net balance of 6% of professionals reporting a rise rather than a fall.
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The UK's defence secretary has called for military spending to be increased to 3% of gross domestic product in a debate about the funding of Britain's armed forces. Speaking on a visit to Poland, Grant Shapps called for the inclusion of the 3% target in the Conservatives' election manifesto, saying: "I want a bigger budget." He also called for an overhaul of recruitment, including an end to certain medical requirements and a lifting of the ban on soldiers growing beards, the Daily Mail reported. Shapps said: "I have coined the phrase 'moving from post-war to pre-war'. We have to be much better prepared. "Defence is the best way to protect ourselves against a military conflict – you have to show your adversaries – so I am clearly in favour (of a 3% target). We live in a more dangerous world, we've got Putin on the front line making gains." Research by the Royal United Services Institute in 2022 suggested that increasing defence spending to 3% of GDP by 2030, as suggested by Liz Truss's government, would require GBP157 billion in additional spending over the following eight years.
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BROKER RATING CHANGES
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JPMorgan places Legal & General on 'positive catalyst watch'
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JPMorgan reinitiates LondonMetric with 'overweight' - price target 230 pence
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COMPANIES - FTSE 100
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Pharmaceutical firm AstraZeneca said it has struck a deal to acquire Amolyt Pharma, strengthening its late-stage rare disease pipeline. Astra will pay up to USD1.05 billion to acquire the developer of endocrine disease treatments. The endocrine system includes major glands in the body such as the thyroid and the hypothalamus. Astra said: "The proposed acquisition will bolster the Alexion, AstraZeneca rare disease late-stage pipeline and expand on its bone metabolism franchise with the notable addition of eneboparatide (AZP-3601), a phase III investigational therapeutic peptide with a novel mechanism of action designed to meet key therapeutic goals for hypoparathyroidism. Additionally, Alexion is looking forward to welcoming talent from Amolyt Pharma." Astra will pay USD800 million at closing, and the deal also includes a possible USD250 million milestone payment. Hypoparathyroidism is when the parathyroid glands produce too little of the parathyroid hormone. It can cause muscle crumps, facial twitches and rough skin.
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Halma left its full-year outlook unchanged, as the safety equipment firm hailed the "further progress" it made in the second half of its financial year. For the year to March 31, it expects adjusted pretax profit to be in line with consensus of GBP388.5 million, which would be a 7.5% rise from GBP361.3 million in the year prior. Halma said: "We have delivered strong constant currency revenue growth in the year to date, comprising good momentum on an organic constant currency basis and a continued healthy contribution from recent acquisitions." Halma said order intake "remains ahead of the comparable period last year". The firm also noted that sterling appreciation has been a currency translation headwind, however.
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COMPANIES - FTSE 250
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Lender OSB Group said its net interest income and profit weakened in 2023, though it maintained its final dividend and announced a new GBP50 million share buyback programme. Pretax profit was 30% lower at GBP374.3 million in 2023, from GBP531.5 million in 2022. Total income fell 15% to GBP658.1 million from GBP775.4 million. Hurting its total income, it reported a GBP4.4 million fair value loss on financial instruments, contrasting with a GBP58.9 million gain in 2022. Net interest income alone fell 7.2% to GBP658.6 million in 2023. OSB, which stands for OneSavings Bank, in July warned its results would be hurt by customers acting more quickly than expected to refinance their mortgages at favourable rates. OSB declared a 21.8 pence per share final dividend, unmoved from the year prior. Its total dividend was boosted by 4.9% to 32.0p from 30.5p. "We have also announced a new GBP50 million share buyback over the next six months and the board will consider additional shareholder returns later in the year," it added. Further, Chief Financial Officer April Talintyre will not be seeking re-election at the annual general meeting on May 9 and will also retire as executive director that day. Deputy CFO Victoria Hyde will serve as acting CFO until the company finds a new permanent CFO.
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Rail ticket selling platform Trainline said it "outperformed expectations" in its recently-ended financial year. It said revenue in the year to February 29 rose 21% to GBP397 million from GBP327 million. It had guided for a rise between 15% and 20%. Net ticket sales were 22% higher at GBP5.30 billion, at the top end of its growth outlook range. Chief Executive Jody Ford said: "Trainline is a home-grown British tech success that has scaled beyond domestic borders to become Europe's most downloaded rail app. We outperformed expectations this year, growing strongly in the UK and across the continent, with International Consumer net ticket sales of more than GBP1 billion."
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OTHER COMPANIES
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Food delivery firm Deliveroo hailed a "good financial performance" in 2023, and said it expects to be free cash flow in 2024. For 2023, Deliveroo reported a GBP10.9 million pretax loss, narrowing from GBP230.6 million in 2022. It achieved adjusted earnings before interest, tax, depreciation and amortisation of GBP85.4 million, however, swinging from a loss of GBP45.0 million. Revenue rose 2.8% to GBP2.03 billion from GBP1.97 billion. Chief Executive Will Shu said: "2023 was a good year for Deliveroo and I am proud of what we have delivered financially, operationally and for our consumers. Our focus on service and value for money continues to build consumer trust, which are fundamental to unlocking future growth in this industry. Alongside this, our restaurant and grocery businesses are performing well, we launched our retail offering, Deliveroo Shopping, and we are scaling our advertising business. Building on the strong progress we made in 2023, I'm excited about the further opportunities ahead." For 2024, it expects an adjusted Ebitda in the range of GBP110 million to GBP130 million. It predicts it will be free cash flow positive this year, after reducing its outflow to GBP38 million in 2023, from GBP243 million in 2022.
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By Eric Cunha, Alliance News news editor
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