5th Nov 2015 08:21
LONDON (Alliance News) - Drug giant AstraZeneca led blue-chip gainers early Thursday, up 2.4%, after upgrading its revenue guidance for 2015 following a generally positive third quarter.
Overall, the London market has started softly, ahead of the Bank of England's "Super Thursday" of policy and outlook announcements.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: down 0.4% at 6,388.79
FTSE 250: down 0.3% at 17,123.45
AIM ALL-SHARE: down 0.1% at 746.34
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Hang Seng: closed flat at 23,051.04
Nikkei 225: closed up 1.0% at 19,116.41
DJIA: closed down 0.3% at 17,867.58
S&P 500: closed down 0.4% at 2,102.31
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GBP: flat at USD1.5383 (USD1.5378)
EUR: soft at USD1.0853 (USD1.0861)
GOLD: down at USD1,107.50 per ounce (USD1,112.99)
OIL (Brent): firm at USD48.84 a barrel (USD48.68)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Thursday's Key Economic Events still to come
(all times in GMT)
09:00 EU Economic Bulletin
09:30 UK Bank of England Quarterly Inflation Report
10:00 EU Retail Sales
11:00 UK BoE Interest Rate and Asset Purchase Facility Decision
11:00 UK Bank of England Minutes and Monetary Policy Statement
11:45 EU ECB President Draghi speech
12:30 US Challenger Job Cuts
12:45 UK BOE Governor Carney speech
13:30 US Initial and Continuing Jobless Claims
13:30 US Unit Labor Costs and Nonfarm Productivity preliminary
15:00 Canada Ivey Purchasing Managers Index
15:30 US EIA Natural Gas Storage change
17:30 US Fed's Lockhart speech
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The British government has said an "explosive device" may have brought down a Russian plane in Egypt's Sinai Peninsula at the weekend that killed all 224 people on board. "While the investigation is still ongoing we cannot say categorically why the Russian jet crashed," read a statement from Prime Minister David Cameron's office. "But as more information has come to light we have become concerned that the plane may well have been brought down by an explosive device. In light of this and as a precautionary measure we have decided that flights due to leave Sharm for the UK this evening will be delayed," the government said, as it suspended flights from Egypt's Sharm el-Sheikh airport. Egyptian Foreign Minister Sameh Shoukry had decried the flight stoppage as a "premature and unwarranted" step that would damage the country's important tourism industry.
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The rate-setting US Federal Reserve could begin the long-awaited tightening of monetary policy as early as December, central bank chief Janet Yellen said. In testimony before a congressional committee she reiterated the Fed's October statement that the bank's monetary policy committee expects the US economy to continue to grow "at a pace that's sufficient to generate further improvements in the labour market and to return inflation to our 2% target over the medium term." If economic data in the weeks ahead reinforces expectations for economic growth and rising inflation, a hike of interest rates "would be a live possibility," Yellen said. "We have made no decision about it," she emphasized.
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Members of the Bank of Japan's monetary policy board said that the country's economic recovery continues to move forward, minutes from the bank's October 6-7 meeting revealed. The board conceded that exports and production have been affected by a slowdown in many of the emerging economies. The members added that inflation is expected to remain close to flat for the foreseeable future because of weak energy prices. At the meeting, the central bank refrained from adding more monetary stimulus, maintaining its target of raising the monetary base at an annual pace of about JPY80 trillion. The bank also left its benchmark lending rate unchanged at 0.10%.
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Germany's factory orders declined unexpectedly in September due to a notable decrease in foreign demand, data from Destatis revealed. Factory orders fell 1.7% month-on-month in September, confounding expectations for a 1% rise. This was the third consecutive fall in orders. Orders had declined 1.8% in August and 2.2% in July.
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Chief diplomats of Germany, France, Russia and Ukraine will meet Friday in Berlin to agree on next steps in ending the Ukraine conflict, a German Foreign Ministry spokeswoman said Wednesday, citing heavy weapons withdrawal as one possible measure. A ceasefire between Ukrainian government troops and pro-Russian separatists in the east had largely been kept since September, and there had been exchanges of prisoners, the spokeswoman said.
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BROKER RATING CHANGES
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GOLDMAN CUTS CENTRICA TO 'NEUTRAL' ('BUY') - TARGET 215 (295) PENCE
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Deutsche Bank Lifts Glencore To Buy From Hold, Ups Target To 200p From 190p
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GOLDMAN CUTS SSE SSE TARGET TO 1,225 (1,455) PENCE - ADDS TO PAN-EUROPE 'CONVICTION SELL LIST'
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COMPANIES - FTSE 100
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AstraZeneca said its operating profit increased in the third quarter and was ahead for the year to date, as AstraZeneca upgraded its revenue guidance for 2015 in constant currencies. The pharmaceutical giant said its operating profit for the third quarter to the end of September rose to USD137.0 million from USD116.0 million a year earlier, helped by an improvement in margins in the half. Total revenue for the quarter fell 10% to USD5.95 billion and was down 2.0% in constant currencies. AstraZeneca upgraded its revenue guidance for the full year in constant currencies to expectations for a broadly flat performance against 2014, having previously guided to a low-single-digit percentage decline.
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The US Food and Drug Administration approved GlaxoSmithKline's Nucala or mepolizumab for use with other asthma medicines for the maintenance treatment of asthma in patients age 12 years and older. Nucala is approved for patients who have a history of severe asthma attacks (exacerbations) despite receiving their current asthma medicines.
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Wm Morrison Supermarkets said sales fell in the third quarter of its financial year as it continued to invest in price cuts amid a deflationary UK grocery market. The food-store chain said total sales excluding fuel were down 2% in the 13 weeks to November 1, on the same period the year before, or down 4.6% including fuel. Like-for-like sales declined 2.6% excluding fuel, and 5.1% including fuel. Despite this, Morrisons said that there was good progress during the quarter against many aspects of its plan, and that it is continuing to invest in lower prices.
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Low-cost airline easyJet said its passenger traffic and load factor both improved in October. The FTSE 100-listed budget carrier said it carried 6.4 million passengers in October, versus 5.8 million a year earlier, up 9.7%. On a rolling 12-month basis, passenger numbers were up 6.3% to 69.2 million, it said. It also said its load factor for the month improved, up to 93.3% from 90.9%.
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Schroders said it has showed resilience so far this year as the asset manager took a GBP14.6 billion hit due to weak investment performance in the third quarter. In a statement, the London-listed money manager said that assets under management fell to GBP294.8 billion at the end of September from GBP309.9 billion at the end of June. Assets under management amounted to GBP300.0 billion at the end of 2014. Net outflows amounted to GBP0.5 billion, meaning the fall in assets under management was largely due to investment performance.
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Randgold Resources said its revenue from gold sales dipped in the third quarter, leaving its profit for the period lower, as it continued to deal with the tough conditions in commodities markets. The gold miner, which operates mainly in central and west Africa, said its profit for the nine months to the end of September was USD159.2 million, down from USD216.8 million a year earlier, as profit for the third quarter fell to USD48.8 million from USD59.2 million.
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COMPANIES - FTSE 250
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Amec Foster Wheeler warned on its outlook for the remainder of the year and into 2016 as it said margin deterioration will hit its second-half results and said it will slash its dividend in half in order to cope with the tough conditions. The oil and gas engineering services company said its underlying revenue for the full year has been in line with expectations in the first nine months of 2015, but said that due to the ongoing weakness in oil and gas markets, its second half margins will be weaker than the first due to continued pricing pressures and an adverse revenue mix. Amec said it will cut its dividend payout for 2015 by 50%.
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Aerospace and defence manufacturer Cobham said it expects its underlying earnings for the full year will miss market expectations as it takes a hit from weak demand in Asia-Pacific and delays on US surveillance orders. The group has seen some tough conditions in its satellite communications business, particularly from poor demand in Asia-Pacific and weak orders from the oil and gas industry. It has also seen some delays in US surveillance orders which had been anticipated.
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SuperGroup reported growth in revenue in the first half of its financial year, boosted by sales increases in both retail and wholesale, and said its gross margin is expected to be ahead of full-year guidance. The clothing retailer, which owns the Superdry brand, said total group revenue rose 22% in the 26 weeks ended October 24 to GBP254.9 million from GBP208.2 million in the same period the year before.
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Rentokil Initial said its revenue for the year to date is broadly flat but dipped slightly in the third quarter, though its guidance for the full year remains unchanged. The business services company said its revenue for the nine months to the end of September was USD1.29 billion, flat year-on-year but up 4.3% in constant currencies. The story was much the same for the third quarter, where revenue came in at USD438.0 million, down 0.4% but 4.1% higher in constant currencies.
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COMPANIES - INTERNATIONAL
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Facebook reported strong growth in earnings for the third quarter, with net profits up about 11% year-on-year to USD896 million. "We had a good quarter and got a lot done," founder and chief executive Mark Zuckerberg said. The world's largest social network continued to grow in the quarter that ended September 30, boosting advertising revenue with user traffic. Facebook said it had 1.55 billion monthly active users, including more than 1 billion who logged on every day - an increase of 17% from the same period in 2014.
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Food giant Kraft Heinz announced it will close seven factories and lay off 2,600 employees in North America. The factories that will be closed are in Fullerton, California; San Leandro, California; Federalsburg, Maryland; St. Marys, Ontario, Canada; Campbell, New York; Lehigh Valley, Pennsylvania; and Madison, Wisconsin.
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Travel giant Expedia has reached a deal to acquire vacation rental firm HomeAway for about USD3.9 billion in cash and stock. Expedia said that HomeAway was an entry into the alternative accommodations space, a sector currently valued at about USD100 billion in the firm's estimation.
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US federal and state authorities imposed penalties of USD258 million against Deutsche Bank over transactions with countries and entities under US sanctions including Iran, Libya, Syria, Myanmar and Sudan. The New York Department of Financial Services said that between 1999 and 2006, Deutsche Bank used "non-transparent methods" to conduct more than 27,000 transactions in dollars cleared through the US valued at nearly USD10.9 billion on behalf of entities subject to US economic sanctions.
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French lender Credit Agricole Group reported that its net income group share for the third-quarter 2015 increased 13.8% to EUR1.751 billion from EUR1.538 billion in the same quarter last year. Crédit Agricole also elected Dominique Lefebvre as chairman. Meanwhile, fellow French bank Societe Generale said its third-quarter group net income improved to EUR1.127 billion from EUR882 million in the prior year.
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French engineering giant Alstom reported net loss-group share for the first-half of the year of EUR57 million, compared to net income of EUR255 million in the year-ago perioid. Group sales for the period were EUR3.30 billion, up 8% from EUR3.06 billion in the prior year. Sales for the period were up 4% organically.
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Deutsche Telekom reported its third-quarter net profit increased to EUR809 million from EUR506 million last year. Net revenue was up 9.3% to EUR17.1 billion from EUR15.6 billion in the previous year.
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Zurich Insurance Group reported that its third-quarter net income attributable to shareholders plunged 79% to USD207 million from last year's USD966 million.
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Japanese automaker Toyota Motor reported its third-quarter net income attributable to the company increased 11.6% to JPY1.2581 trillion from JPY1.1268 trillion last year. On a consolidated basis, net revenue increased 8.9% to JPY14.09 trillion from JPY12.95 trillion a year ago. Consolidated vehicle sales totalled 4,278,007 units, a decrease of 198,515 units compared to the same period last fiscal year.
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Thursday's Scheduled AGMs/EGMs
Abcam
Wilmington
JPMorgan Overseas Investment Trust
Electra Private Equity
Development Securities
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By Tom Waite; [email protected]; @thomaslwaite
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