27th Apr 2016 07:25
LONDON (Alliance News) - UK shares opened flat Wednesday, ahead of an interest rate decision by the US Federal Reserve after the London close and amid a full tide of earnings reports from the UK, US and Europe.
Barclays said first-quarter results showed a core business in rude health even as the bank saw a 25% drop in pretax profit. Pretax profit fell to GBP793 million in the three months ended March 31, Barclays said in a statement, down from GBP1.06 billion the corresponding quarter a year earlier.
It was the first set of results since Chief Executive Jes Staley outlined in March a vision of Barclays as a transatlantic consumer, corporate and investment bank anchored in London and New York.
The stock was leading FTSE 100 risers, up 3.6%.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: down 0.1% at 6,277.57
FTSE 250: flat at 16,947.56
AIM ALL-SHARE: flat at 729.44
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Hang Seng: down 0.3% at 21,352.47
Nikkei 225: closed down 0.4% at 17,290.49
DJIA: closed up 0.1% at 17,990.32
S&P 500: closed up 0.2% at 2,091.70
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GBP: up at USD1.4615 (USD1.4590)
EUR: firm at USD1.1323 (USD1.1310)
GOLD: up at USD1,246.30 per ounce (USD1,241.76)
OIL (Brent): up at USD46.34 a barrel (USD45.60)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Wednesday's Key Economic Events still to come
(all times in BST)
09:00 Italy business and consumer confidence
09:00 EU private loans and M3 money supply
09:30 UK gross domestic product preliminary and index of services
11:00 UK CBI Distributive Trades Survey
12:00 US MBA mortgage applications
13:30 US goods trade balance
15:00 US pending home sales
15:30 US EIA crude oil stocks
19:00 US Fed interest rate decision
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More than 20,000 junior doctors are thought to have gone on strike on Tuesday as the Health Secretary admitted this was likely to be his "last big job in politics". Figures complied by NHS England suggest 78% of junior doctors (21,608) who were expected to be working on Tuesday did not report for duty. Health Secretary Jeremy Hunt has insisted the government will not be "blackmailed" into dropping its manifesto pledge of improving seven-day services as the dispute with the British Medical Association over a new contract continues.
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Republican Donald Trump swept to victory in five north-eastern state primaries, while Democrat Hillary Clinton won four states as the front-runners cemented their status in the state-by-state process to pick US presidential candidates. Trump won by large margins in all five states: Maryland, Pennsylvania, Delaware, Connecticut and Rhode Island, with the billionaire real estate mogul nabbing more than 60% of the vote in two of states and well over 50% in the others, official results showed. Clinton's leads were just as commanding, but she faced a loss to rival Bernie Sanders in the small state of Rhode Island.
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The palace of Spain's King Felipe IV said late Tuesday that two days of coalition talks with party leaders in a bid to solve the country's political crisis have ended without result, making fresh elections an almost certain prospect. The monarch was unable to put forward a candidate after discussions with party leaders, the palace said. Fresh elections set for June 26 have become inevitable as a result, Patxi Lopez, speaker of Spain's lower house of Parliament, said.
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Austria is set to move towards tougher measures on Wednesday to limit the number of new asylum requests. Legislators in Vienna are expected to pass an amendment that allows the government to adopt emergency measures if the number of arrivals threatens to overburden Austria's public services. These measures would include the rejection of all asylum seekers at borders except for those few who have immediate family in Austria or who face inhumane treatment if they are pushed back to another country.
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China's industrial profits logged a double-digit expansion in March, data from the National Bureau of Statistics showed. Industrial profits climbed 11.1% from a year ago.
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Japan's all industry activity decreased at a slower-than-expected pace in February, after rising in the previous month, figures from the Ministry of Economy, Trade and Industry showed. The all industry activity index fell 1.2% month-over-month in February, in contrast to a 1.2% climb in January. Economists had expected a 1.3% decline for the month.
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BROKER RATING CHANGES
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BARCLAYS RAISES INFORMA TO 'OVERWEIGHT' ('EQUAL WEIGHT') - TARGET 750 (630) PENCE
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COMPANIES - FTSE 100
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London Stock Exchange Group said it made a "strong start" to 2016, amid "testing" market conditions in the first quarter, with total revenue driven higher by its FTSE Russell indexes business and clearing house LCH. Revenue increased to GBP358.9 million in the three months ended March 31, LSE Group said in a statement, from GBP332.1 million the corresponding quarter a year earlier. LSE Chief Executive Xavier Rolet said LSE is "advancing" with the merger agreed with Frankfurt-based Deutsche Boerse to create a European powerhouse that can compete globally. Work is underway on shareholder documentation as well as preparations for winning approvals needed for the deal to go through, he said.
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Antofagasta said copper production was down from the previous quarter thanks to maintenance work at the flagship Los Pelambres mine and because the Michillia mine was placed on care and maintenance, but said it remains on track to deliver its full-year guidance. The miner operating in Chile said production of copper, its main commodity, amounted to 157,100 tonnes in the first quarter of 2016, a 7.3% increase from a year earlier. Production for the full year remains on track, it said, as does the company's cash cost targets for 2016.
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Irish building materials company CRH said a robust trading environment in its key markets drove revenue higher in the first quarter. The group said sales grew 9.0% year-on-year in the first quarter, with sales in the Americas rising 22%, Asia sales up 12% and Europe sales flat. CRH said it expects its group earnings before interest, taxation, depreciation and amortisation for the first half to be around EUR1.0 billion, with more progress on earnings expected in the second half.
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COMPANIES - FTSE 250
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Amec Foster Wheeler appointed Jonathan Lewis, who has held several senior roles at US giant Halliburton, as its new chief executive as the company reported a drop in revenue in the first quarter of 2016. The oilfield services company said Lewis will takeover as chief executive from the start of June. Current interim Chief Executive Ian McHoul will step down from his role but remain as Amec Foster Wheeler's chief financial officer. Amec Foster Wheeler said its financial guidance for the full year remains unchanged, and said it is still expecting a "slight like-for-like revenue decline" in 2016. The company is also expecting the decline in trading margins to be "significantly less" this year compared to the declines experienced in 2015.
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Home Retail Group said it swung to a loss in its recently-ended financial as the company prepares for its takeover by J Sainsbury and after offloading its Homebase business. The struggling retailer said it made a pretax loss of GBP840.3 million in the year ended February 27, having made a pretax profit of GBP87.8 million the year before. This was primarily due to it booking an GBP852 million goodwill impairment charge relating to its takeover. Revenue remained flat at GBP4.23 billion, with flat sales at Argos and a 3% decline at Homebase.
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Transport operator Stagecoach Group said like-for-like revenue grew in the first 48 weeks of its financial year in most of its operations, with only its North American arm suffering a decline. The bus and rail operator said like-for-like sales in its UK regional bus business grew 0.2% in the 48 weeks to April 2, while like-for-like sales in its London bus arm rose 1.1%. Like-for-like UK rail sales were up 2.5%, while like-for-like sales for its Virgin Rail Group venture were up 4.6%. Stagecoach said it remains on track to meet its expectations for its full financial year to the end of April.
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Specialty chemicals company Croda International said sales grew in the first quarter and remains on track to meet expectations for 2016. The company said first quarter sales were up 7.7% year-on-year to GBP306.8 million, helped by the acquisition of the Incotec seed treatment business and favourable currency translation effects from a stronger euro and dollar against sterling. In all, profit for the first quarter was in line with Croda's expectations, leading it to affirm expectations for the full year 2016.
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COMPANIES - LONDON MAIN MARKET AND AIM
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London-focused estate agent Foxtons Group said revenue surged in the first quarter, helped by higher levels of activity ahead of new buy-to-let and second home stamp duty legislation. Foxtons said total revenue for the quarter to the end of March was GBP38.4 million, up 16% year-on-year and driven by a 29% increase in property sales commissions. The increase came from a significant rise in transactions completing before the introduction of a 3.0% stamp duty surcharge on buy-to-let investments and second homes which came into force in the UK on April 1. With transactions brought forward to beat the deadline, Foxtons said its sales pipeline for the second quarter is lower year-on-year, as a result.
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COMPANIES - INTERNATIONAL
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Technology giant Apple reported a drop in second-quarter profit, hurt largely by a double-digit revenue decline reflecting weak iPhone sales. Poor results and a weak outlook sent the company's shares plunging more than 7% in after-hours trading in New York, erasing about USD40 billion in market cap. Apple reported its first year-over-year decline in iPhone sales since the product's launch in 2007, reflecting a saturated smartphone market. Sluggish economic growth in China - Apple's second-biggest market after the US - less frequent upgrades of iPhones by customers and a mediocre reception of the new iPhone SE also contributed to the iPhone sales decline. The smartphone pioneer said it sold 51.19 million iPhone units during the quarter, generating USD32.86 billion in revenues. This compares to sales of 61.17 million units and revenues of USD40.28 billion last year.
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Cable television giant Comcast is in talks to acquire DreamWorks Animation SKG for more than USD3 billion, the Wall Street Journal reported, citing people familiar with the matter. The tentative purchase price represents a healthy premium over DreamWorks' current USD2.3 billion market value, the report noted.
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AT&T reported first-quarter net income attributable to company of USD3.8 billion, or USD0.61 per share, compared to USD3.3 billion, or USD0.63 per share, in the year-ago quarter. First-quarter consolidated revenue totalled USD40.5 billion, up more than 24% versus the year-earlier period largely due to the July 24, 2015 acquisition of DIRECTV.
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ExxonMobil, the world's largest oil company, has lost its stellar credit rating in the wake of sinking oil prices, the rating agency Standard & Poor's said. The oil giant is now rated AA+, down a step from AAA. It is the first time since 1967 that it has not enjoyed the agency's top rating. S&P said it made the move due to the strain of lower commodity prices.
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Ford Motor is investing USD1.6 billion to upgrade two of its manufacturing facilities in Michigan and Ohio, and creating or retaining 650 hourly jobs in the US. The USD1.4 billion investment in the Livonia transmission plant and USD200 million investment in its Ohio assembly plant are part of the USD9 billion commitment the company made in the 2015 UAW-Ford collective bargaining agreement to continue investing in its US plants.
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Nomura Holdings expects about USD600 million to USD700 million of annual cost savings from restructuring its European equities business and cutting jobs there and in the Americas, Bloomberg reported citing people familiar with the matter. Top executives of Japan's largest securities firm expect the cost cuts to enable Nomura to post a profit from its overseas operations for the current fiscal year, something it last achieved in 2010.
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German sportswear giant Adidas reported first-quarter net income from continuing operations increased 38% to EUR350 million from EUR255 million, excluding goodwill impairment losses. Group revenue increased 22% on a currency-neutral basis and 17% in euro terms to EUR4.8 billion.
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Spain's Banco Santander reported first-quarter attributable profit was EUR1.63 billion, 5% lower than EUR1.72 billion a year ago. On a currency neutral basis, profit grew 8%. Profit before tax was EUR2.73 billion, down 8.6% from EUR2.99 billion a year ago. Loan-loss provisions were EUR2.41 billion, down 6% from a year ago.
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Norwegian energy firm Statoil reported first-quarter net income attributable to equity holders of the company was USD607 million or USD0.19 per share, compared to a loss of USD4.58 billion or USD1.44 per share a year ago. Net impairment reversals of USD308 million before tax in the first quarter of 2016 positively impacted the results, while last year's results were hurt by impairment charges of USD5.94 billion before tax. Revenue declined to USD10.09 billion from USD15.40 billion a year ago.
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Wednesday's Scheduled AGMs/EGMs
Just Eat
British American Tobacco
Amec Foster Wheeler
Countrywide
Hutchison China MediTech
Glanbia
Genel Energy
Dalata Hotel Group
Matomy Media Group (re additonal payment to chairman)
Greencoat UK Wind
Symphony International Holdings
Kennedy Wilson Europe Real Estate
Croda International
Elementis
Mithras Investment Trust
Devro
Fidessa Group
London Stock Exchange Group
Synectics
JPMorgan US Smaller Co Investment Trust
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By Tom Waite; [email protected]; @thomaslwaite
Copyright 2016 Alliance News Limited. All Rights Reserved.
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