9th Dec 2024 07:51
(Alliance News) - London's FTSE 100 is called higher, while stocks in Hong Kong perked up amid after a slow start amid fresh hope for the Chinese economy.
Bloomberg reported China's top leaders will welcome "moderately loose" strategy for the year ahead, in a bid to boost growth.
The development follows softer Chinese inflation data, which initially kept a lid on Asian equities.
It is a week which will see central banks in focus.
"The week ahead features four G10 central bank meeting, and Brazil's central bank. The Reserve Bank of Australia is on hold. There is negligible risk of a surprise. Brazil's central bank will likely hike by 75 bp to bring the Selic rate to 12%. The Bank of Canada meets, and the jump in unemployment may have been a sufficient inducement for the central bank to look past the firmer CPI and deliver the second consecutive 50 bp cut," Bannockburn Global Forex Marc Chandler commented.
"The ECB and SNB meet on Thursday. The market toyed with the idea of a 50 bp cut by the ECB but has backed off to favour a quarter-point move. The market is nearly divided over the outlook for the SNB. The odds in a swap market are slightly shy of 50% for a half point cut, down from around 66% at the start of the week."
Elsewhere, Wednesday has a US consumer price index reading.
The fall of Bashar al-Assad in Syria and a meeting between Donald Trump and Ukrainian President Volodymyr Zelensky kept geopolitical events front and centre, meanwhile.
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 0.2% at 8,320.91
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Hang Seng: up 2.0% at 20,253.23
Nikkei 225: up 0.2% at 39,160.50
S&P/ASX 200: flat at 8,423.00
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DJIA: closed down 123.19 points, 0.3%, at 44,642.52
S&P 500: closed up 0.3% to 6,090.22
Nasdaq Composite: closed up 0.8% at 19,859.77
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EUR: lower at USD1.0552 (USD1.0569)
GBP: lower at USD1.2743 (USD1.2748)
USD: higher at JPY150.16 (JPY149.83)
GOLD: higher at USD2,647.31 per ounce (USD2,640.10)
(Brent): higher at USD71.51 a barrel (USD71.22)
(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
13:00 GMT UK Bank of England Deputy Governor Dave Ramsden speaks
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UK Chancellor Rachel Reeves is set to address a meeting of eurozone finance ministers in Brussels on Monday to urge a "business-like relationship" with the EU and post-Brexit. She will be the first British chancellor to attend a Eurogroup meeting since the UK left the bloc, and is set to call for a "relationship built on trust, mutual respect and pragmatism", according to a press release from the Treasury. While in Brussels, Reeves is expected to call for an easing of trade barriers, a boost to investment and help to enable "our businesses sell in each other's markets". She is also due to discuss UK and EU support for Ukraine. The visit is the latest in the Labour government's bid to "reset" relations with the EU after years of post-Brexit rancour under previous Conservative governments. In October, UK Prime Minister Keir Starmer met European Commission President Ursula von der Leyen to discuss strengthening relations. The British leader, who voted in the UK's 2016 referendum to remain in the EU, has insisted his reset will not mean reversing Brexit and has ruled out a return to the European single market or customs union. Starmer's government has pledged to refire the economy and boost growth, including by resetting international relations with the EU and beyond.
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Angela Rayner has said she understands people are angry and "impatient for change", after several polls showed a drop in support for Labour following the UK budget. The deputy prime minister pointed to the "significant challenges" faced by the government since its election when pressed on the dip.
In a recent Find Out Now poll, the Tories came out on top with 26% of people stating they would vote for the party if a general election was called today. Meanwhile, 23% said Labour, placing the party below Reform UK which had 24% of the vote. Polls also appear to suggest a drop in support for Labour in both Wales and Scotland, with voters signalling increased support for Plaid Cymru and the SNP.
Asked on the BBC's Sunday With Laura Kuenssberg show if she was concerned by the rise of Nigel Farage's Reform UK in the polls, the deputy prime minister said: "I know people are impatient for change and people are very angry that they see (what) they were promised. "So, for example, when we left the EU, people were promised more money into the NHS, your living standards will be better, and the opposite has happened. "I know people are impatient for change, but I also know that people will give us that opportunity and will judge us, and that's why Keir set out the clear guidelines on what people should expect we will deliver."
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The UK government will deliver a "sweeping overhaul" of council planning committees aimed at "unblocking the clogged-up" system, Rayner is expected to announce. Reforms proposed by the deputy prime minister would see planning applications which meet local development plan requirements bypass council committees. This would be aimed at ending delays to new homes, cutting the time and resources spent on individual schemes and providing more certainty to housebuilders.
Rayner, who is also the housing secretary, said: "Building more homes and infrastructure across the country means unblocking the clogged-up planning system that serves as a chokehold on growth. "The government will deliver a sweeping overhaul of the creaking local planning committee system. "Streamlining the approvals process by modernising local planning committees means tackling the chronic uncertainty and damaging delays that act as a drag anchor on building the homes people desperately need." The deputy PM said the government was "tackling the housing crisis we inherited head-on with bold action" as it worked towards building 1.5 million homes over five years. The housebuilding commitment was one of the six "milestones" the prime minister set out in a wide-ranging speech on Thursday, against which the public can measure the government's performance.
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Confidence among UK businesses has slid to its weakest level for almost two years, according to new figures. The latest business trends report by accounting and advisory firm BDO said it also witnessed the biggest month-on-month fall in sentiment among firms since 2021 after they digested the impact of the autumn budget. Firms said they expect to come under pressure from rising costs, reduced customer confidence and falling orders. The BDO optimism index fell 5.81 points to 93.49 in November – the weakest reading since January 2023. Data showed declining optimism across the services and manufacturing sectors, ahead of planned increases in national insurance contributions and the minimum wage as part of Chancellor Reeves' budget. Firms also said that their output declined in November in the face of weak consumer confidence, indicating a potential contraction in the economy. The data also highlighted that employment returned to decline over the month. In October, the report's employment index showed growth for the first time in 15 months but swung lower again in November in the face of "ongoing challenges" in the labour market.
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BROKER RATING CHANGES
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Goldman Sachs cuts Vodafone to 'neutral' (buy) - price target 83 (100) pence
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UBS cuts Trainline to 'neutral' (buy) - price target 490 (410) pence
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COMPANIES - FTSE 100
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GSK said the US health watchdog has accepted for review data from a study on its Nucala drug as a treatment for chronic obstructive pulmonary disease. The drug maker said Nucala could be the first approved biologic treatment with monthly dosing for COPD sufferers. Data from the Matinee study has been accepted to "support the regulatory review process" in GSK's pursuit for the new approval for Nucala, the brand name of mepolizumab. "The Matinee study met its primary endpoint with the addition of mepolizumab to inhaled maintenance therapy, achieving a statistically significant and clinically meaningful reduction in the annualised rate of moderate/severe exacerbations versus placebo with patients treated for 52-104 weeks," GSK explained. Nucala is not currently an accepted treatment for COPD anywhere in the world. In addition, GSK said its Blenrep drug has been approved for priority review in China to treat sufferers of myeloma, a bone marrow cancer. "Today's regulatory filing acceptance, with a priority review, is a meaningful step forward in our efforts to bring the benefits of Blenrep in combination to patients in China. Multiple myeloma patients need new options that may improve outcomes, particularly at first relapse," said Hesham Abdullah, GSK's global oncology head.
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AstraZeneca said Datopotamab deruxtecan treatment has been granted breakthrough therapy designation in the US to treat some sufferers of non-small cell lung cancer. Breakthrough therapy designation aims to quicken the development and regulatory review of a drug. The treatment is being jointly-developed alongside Daiichi Sankyo.
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A long-abandoned Papua New Guinea mine once operated by Anglo-Australian miner Rio Tinto poses environmental and safety concerns for nearby communities, who live under the threat of landslides, a new report shows. A two-year study of the Panguna mine – located on the autonomous island of Bougainville – found that mine structures had "deteriorated", while "tailings continued to migrate downstream and chemicals continue to be released". The Rio Tinto-commissioned study, conducted by environmental firm Tetra Tech Coffey, found that in some areas, buildings, bridges or the ground itself were "unstable and may collapse". This poses the risk of harm, injury or death to the local community, according to the report. The miner has for years been accused of sidestepping responsibility for cleaning up poisonous waste at the vast mothballed copper and gold mine. Rio Tinto's Australian Chief Executive Kellie Parker said the "comprehensive assessment" marked an important milestone in understanding the long-term impacts of the mine.
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COMPANIES - FTSE 250
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Domino's Pizza Group said it has reached a five-year profit and growth "framework" with its franchise partners. Milton Keynes, England-based Domino's Pizza Group is the master franchise holder in the UK and Ireland for US pizza delivery brand owner Domino's Pizza Inc. Under a "new profitability and growth framework", it targets system sales of GBP2.0 billion by 2028, a rise of around a quarter from 2023's GBP1.57 billion, before further growth to GBP2.5 billion by 2033. This will drive "profit growth across the system". The firm added: "DPG and its franchise partners have made significant strategic progress together since 2021 under the memorandum of understanding, collectively benefiting from an aligned system. New store openings have accelerated, national value campaigns have delivered increased orders, and we have brought more innovation to customers. In addition, app customers have doubled, our service times have significantly improved and GPS technology was rolled out. We also successfully launched and scaled nationally on Just Eat and Uber Eats. The PGF will embed the new ways of working that have enabled the relationship to go from strength to strength and ensures continuation of our mutual achievements of the last three years." The new deal commences from January 3, a day after the concluson of the existing one. A "core" cog of the new deal will be a "national advertising fund". Franchise partners will continue to contribute 4.0% of system sales to the fund to "support national campaigns and promote the Domino's brand". The firm said it continues to trade in line with expectations. In the first nine weeks of the fourth-quarter, total orders are 5.3% higher. "As with other major employers in the UK, the recent UK budget has significantly increased the cost of labour for both DPG and our franchise partners, who are particularly impacted," it cautioned. It added that the annual hit from the budget measures will be around GBP3 million. In addition, it said another GBP4 million to GBP5 million will be invested in a number of areas, including its technology platform.
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OTHER COMPANIES
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boohoo Group received the backing from a group representing institutional shareholders, as a key vote on its future edges closer. Institutional Shareholder Services recommended investors vote against general meeting proposals tabled by Frasers Group at a December 20 meeting. "The board of boohoo welcomes the backing of ISS, which is in line with the recommendation we have made to reject the proposals from Frasers Group. We are clearly focused on doing what is right for all investors, following the launch of our business review to unlock and maximise shareholder value, the appointment of Dan Finley as our CEO and a successful fundraising," boohoo Chair Tim Morris said. Frasers Group founder Mike Ashley believes boohoo "is in desperate need" of his guidance and called on the AIM listing to not turn to a "fire sale" of its assets. In a letter to boohoo shareholders on Sunday, Ashley said the online fashion retailer is currently a "catastrophic mess" and took aim at a near 90% share price slide over the past five years. Ashley founded Sports Direct owner Frasers, which owns around 28% of boohoo. Frasers had tried to install Ashley as the as boohoo chief executive. boohoo last month, however, announced Finley as its new CEO, replacing John Lyttle. At a general meeting on December 20, boohoo shareholders will vote on a pair of resolutions tabled by Frasers. Frasers wants to add Ashley and Michael Lennon to the boohoo board.
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Angling Direct said it will launch a GBP4.0 million share buyback programme. The fishing tackle and equipment retailer believes "the current value of the group's equity represents an attractive opportunity for deployment of surplus capital". "Since the end of Covid-19 and against a backdrop of continuing uncertainty for omni channel retailers, the group has focused on driving profitable growth and has firmly established itself as a cash generative operation. This has provided the company with a solid platform to enable investment to further grow earnings and the addressable market of the group. The level of cash generation has kept pace with the scale of the investment and the group continues to maintain a robust balance sheet," it added.
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By Eric Cunha, Alliance News news editor
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