4th Sep 2024 07:56
(Alliance News) -Stocks in London were called to open lower on Wednesday morning, joining peers from Asia and the US in the red, ahead of data from across the pond later in the day.
Trade balance from the US, as well as an interest rate decision from Canada, are both due on Wednesday, as well as a handful of PMI readings from Europe.
In early corporate news, Segro reached agreement on a takeover offer for Tritax EuroBox, Hilton Food posted improved interim earnings, and Dalata Hotel noticed a softening in demand from domestic, cost-conscious customers.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: called down 69.0 points, or 0.8%, at 8,228.70
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Hang Seng: down 1.1% at 17,461.17
Nikkei 225: closed down 4.5% at 36,948.22
S&P/ASX 200: closed down 1.9% at 7,950.50
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DJIA closed down 626.15 points, 1.5%, at 40,936.93
S&P 500 closed down 2.1% at 5,528.93
Nasdaq Composite closed down 3.3% at 17,136.30
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EUR: up at USD1.1054 (USD1.1037)
GBP: up at USD1.3110 (USD1.3089)
USD: down at JPY145.28 (JPY145.85)
GOLD: up at USD2,492.80 per ounce (USD2,482.65)
OIL (Brent): down at USD73.44 a barrel (USD74.19)
(changes since previous London equities close)
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ECONOMICS
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Wednesday's key economic events still to come:
08:30 EDT Canada trade balance
09:45 EDT Canada interest rate decision
10:00 CEST eurozone composite PMI
11:00 CEST eurozone PPI
09:00 CEST eurozone European Central Bank executive board member Frank Elderson speaks
09:50 CEST France composite PMI
09:55 CEST Germany composite PMI
09:30 CEST Germany Deutsche Bundesbank executive board member Sabine Mauderer speaks
11:00 IST Ireland unemployment
09:45 CEST Italy composite PMI
09:15 SAST South Africa S&P global PMI
12:00 SAST South Africa business confidence
09:15 CEST Spain composite PMI
09:30 BST UK composite PMI
08:30 EDT US trade balance
10:00 EDT US factory orders
14:00 EDT US Fed's Beige Book
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The new full state pension in the UK could rise by more than GBP400 per year, it has been reported. The Treasury's internal working calculations, reportedly seen by the BBC, revealed the pension could be boosted as a result of April's triple lock. Changes would take the full state pension to around GBP12,000 in 2025/26, after the GBP900 increase in 2023. Pre-2016 retirees who may be eligible for the secondary state pension could see a GBP300 per year increase. The new state pension system was introduced in 2016 to provide a sustainable, clear foundation pension for people to build their private savings. Any decision on a pension increase will be made by Secretary of State Liz Kendall ahead of October's budget. Chancellor Rachel Reeves on Monday reaffirmed the government's backing of the triple lock until the end of this parliament.
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China's service economy continued to expand in August, data published by S&P Global showed. The seasonally adjusted headline Caixin China general services business activity index edged down to 51.6 in August from 52.1 in July. Falling towards the neutral 50 points-mark separating growth from contraction, it indicates the pace of growth decelerated. S&P Global said: "Employment declined in August after rising in July. This was despite renewed accumulation of unfinished business in the latest survey period. According to panellists, job shedding occurred due to both resignations and redundancies stemming from the need to lower costs." The composite output index remained unchanged at 51.2 in August.
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Japan's business activity continued to be healthy last month. The au Jibun Bank Japan services business activity index remained unchanged at 53.7 in August. "Despite further increases in demand, increased productive capacity meant that firms were able to reduce outstanding business for the second time in three months in August. The rate of depletion was modest but the most marked since April 2022," S&P Global said. The au Jibun Bank composite PMI output index improved to 52.9 in August from 52.5 in July, indicating growth accelerated.
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The US said Tuesday it was time to "finalise" a deal between Israel and Hamas to end the Gaza war, after Israeli Prime Minister Benjamin Netanyahu's refusal to bow to pressure. Washington would work "over the coming days" with fellow mediators Egypt and Qatar "to push for a final agreement," said US State Department spokesman Matthew Miller. He was speaking after Netanyahu rejected "concessions" in indirect negotiations with Hamas, despite growing domestic and international pressure following the recovery by Israel's military of six killed hostages from the war-ravaged Palestinian territory.
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BROKER RATING CHANGES
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Exane raises Compass Group to 'outperform' (neutral) - price target 2,735 (2,350) pence
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Goldman Sachs raises Aston Martin price target to 392 (389) pence - 'buy'
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Jefferies raises Mobico Group price target to 90 (80) pence - 'buy'
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COMPANIES - FTSE 100
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Segro said it has reached agreement on a takeover offer for Tritax EuroBox. The transaction will be implemented via a scheme of arrangement, according to which the London-based property investment and development company will acquire the whole issued and to be issued share capital of Tritax EuroBox. In return, Tritax EuroBox investors will receive 0.0765 new Segro shares per Tritax share. Tritax shareholders will also receive a 1.25 euro cents quarterly dividend. The deal values Tritax EuroBox at approximately GBP1.10 billion, including net debt.
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M&G reported a half-year pretax loss of GBP57 million, swung from profit of GBP101 million a year prior. Adjusted operating pretax profit came to GBP375 million from GBP390 million, while the loss from short-term valuations in investment returns was GBP284 million, widened from GBP177 million. The firm announced a dividend per share of 6.6 pence from 6.5p the year before. Looking ahead, M&G said it was confident in the company's long-term outlook.
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COMPANIES - FTSE 250
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Hilton Food named AG Barr's Mark Allen as its new chair designate, with effect from October 1. Allen will then become chair of Hilton Food's board on January 1, at which time Robert Watson will step down after more than 20 years at the company. Also on Wednesday, the group posted interim pretax profit of GBP25.4 million, up from GBP11.3 million a year prior. Revenue was down 8.4% to GBP1.94 billion from GBP2.12 billion, but up 1.0% on a constant currency basis. Adjusted pretax profit was GBP33.5 million, up 25% from GBP26.8 million. Looking ahead, Hilton said it was "well-positioned and continues to trade in line with expectations for the full year".
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Balanced Commercial Property Trust has agreed to a cash takeover offer from Starwood Funds, according to which Starwood will pay 96.00 pence per share in cash for the firm. This offer is at a 22% premium to Balanced Commercial Property Trust's price in April, and at an 8.7% discount to Balanced Commercial Property Trust's net asset value on June 30. The offer follows a strategic review by the firm in April, after which it decided a takeover offer was preferred to a managed wind-down. Starwood's offer is supported by holders of 25.8% of Balanced Commercial Property Trust shares.
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OTHER COMPANIES
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Dalata Hotel reported half-year pretax profit of EUR41.9 million, down from EUR50.4 million a year prior. Revenue rose to EUR302.3 million from EUR284.8 million, while revenue per available room was EUR110.77 from EUR109.41. Hotel occupancy dipped slightly to 77.6% from 78.4% year-on-year, while average room rate rose slightly to EUR142.67 from EUR139.50. According to the hotel operator, demand from corporate and international visitors remained strong, but there has been a softening from more cost conscious domestic customers, with trade lower than expected in regional Ireland and in the UK in July and August. The firm announced an interim dividend of 4.1 euro cents per share, as well as a share buyback programme of up to EUR30 million.
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By Holly Beveridge, Alliance News senior reporter
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