24th Mar 2025 07:54
(Alliance News) - London's FTSE 100 is called to open higher on Monday, ahead of a slew of flash composite readings later in the day, and following the announcement of UK plans to cut government Civil Service spending.
US and Russian officials are also due to meet in Saudi Arabia on Monday, for further talks on a partial ceasefire in Ukraine.
"US equities saw a precious support from the Federal Reserve [Fed] last week, as policymakers decided to downplay the impact of tariffs on inflation by saying that it would be ‘transitory’ and slowed the pace of QT. As such, the S&P500 closed last week 0.51% higher avoiding further losses into the correction zone despite gloomy outlook from FedEx, Micron Technology and Nike. Nasdaq gained some 0.25% over the week, the Dow Jones rebounded from the 50-week moving average to close the week 1.20% higher, small and mic-cap stocks also recovered," commented Swissquote analyst Ipek Ozkardeskaya.
"Across the Atlantic, Thursday and Friday were not cheery, as some investors decided to take profit after the German government passed a bill to expand infrastructure and security spending by boosting debt, and before the US tariffs are due to become effective from April 2nd. The Chinese equities, on the other hand, gave back some of the government-stimulus-boosted gains."
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 8,661.69
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Hang Seng: up 0.2% at 23,742.18
Nikkei 225: closed down at 37,667.23
S&P/ASX 200: closed up 0.1% at 7,936.90
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DJIA: closed up 32.03 points, or 0.1%, at 41,985.35
S&P 500: closed up 4.67 points, or 0.1%, at 5,667.56
Nasdaq Composite: closed up 92.42 points, or 0.5%, at 17,784.05
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EUR: up at USD1.08383 (USD1.0819)
GBP: up at USD1.2943 (USD1.2914)
USD: up at JPY149.72 (JPY149.05)
Gold: up at USD3,021.74 per ounce (USD3,013.40)
(Brent): up at USD72.17 a barrel (USD72.01)
(changes since previous London equities close)
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ECONOMICS
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Monday's key economic events still to come:
08:30 GMT Germany flash composite PMI
09:00 GMT eurozone flash composite PMI
09:30 GMT UK flash composite PMI
12:30 GMT US Chicago Fed national activity index
13:45 GMT US flash composite PMI
18:00 GMT UK Bank of England Governor Andrew Bailey speaks
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UK Chancellor Rachel Reeves has denied that Labour is heading towards austerity as she confirmed plans to cut the UK Civil Service running costs by 15%. The chancellor pointed to money poured into capital spending and the NHS, saying the government's actions were a "far cry" from those of their Conservative predecessors. At the same time, she said Labour was looking to cut back the Civil Service, which she said had swelled during the Covid-19 pandemic, by slashing its "back office functions, the administrative and bureaucracy functions" by the end of this parliament. The Cabinet Office will tell departments to cut their administrative budgets by 15%, which is expected to save GBP2.2 billion a year by 2029-30. Reeves has also ruled out raising taxes in this week's spring statement. The chancellor has repeatedly said she will not budge from her fiscal rules, which rule out borrowing to fund day-to-day spending. This has led to mounting pressure over how to balance the books – by raising taxes or cutting spending – amid disappointing growth figures and higher-than-expected borrowing. "This is not a budget. We're not going to be doing tax raising," she told the Sun on Sunday. "We did have to put up some taxes on businesses and the wealthiest in the country in the budget," she said of the autumn budget last year. "We will not be doing that in the spring statement".
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UK households collectively spent a record GBP217 billion on housing costs in 2024, according to estimates from a property services firm. Savills analysed private and social rents plus owner-occupier mortgage costs. The research indicated that housing costs were GBP8.6 billion higher than a previous peak in 2016, when adjusted for inflation. Total housing costs have risen by a total of GBP41.2 billion in the past two years alone. The bill for mortgaged owner-occupiers reached nearly GBP110 billion in 2024, with the average homeowner with a mortgage paying GBP12,754 per year – GBP2,829 more than in 2022. Renters' costs in the private sector totalled nearly GBP81 billion in 2024, with the annual bill for the average household renting reaching GBP14,458, after increasing by GBP2,195 over the past two years. Social renters paid GBP5,478 on average last year, marking a GBP560 average increase compared with 2022, researchers found. The total bill for social renters was about GBP27 billion in 2024. With high house prices and rents, households in London accounted for 25% of housing costs last year, according to the analysis, which involved using Bank of England and Office for National Statistics data.
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Canada's new Prime Minister Mark Carney, on Sunday called early elections for April 28, pledging to defeat Donald Trump's drive to annex the US's huge northern neighbour. Carney, a former central banker, was chosen by Canada's centrist Liberal Party to replace Justin Trudeau as prime minister, but he has never faced the country's broader electorate. That will now change as Carney brought parliamentary elections forward several months from October, and he made it clear that the barrage of threats coming from the US president and the trade war he has launched will be the crux of his campaign. Trump "wants to break us, so America can own us. We will not let that happen," Carney said.
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US and Russian officials meet in Saudi Arabia on Monday for talks on a partial ceasefire in the Ukraine war, a day after delegates from Washington and Kyiv had their own discussions. US President Donald Trump is pushing for a rapid end to the three-year war and hopes talks in Riyadh could pave the way for a breakthrough. The meeting between the Ukrainian team, led by defence minister Rustem Umerov, and the Americans finished up late Sunday night. "The discussion was productive and focused – we addressed key points including energy," Umerov said on social media, adding Ukraine was working to make its goal of a "just and lasting peace" a reality. But the Kremlin on Sunday downplayed expectations of a rapid resolution. "We are only at the beginning of this path," Kremlin spokesman Dmitry Peskov told Russian state TV. He said there were many outstanding questions over how a potential ceasefire might be implemented. Russian President Vladimir Putin has rejected a joint US-Ukrainian call for a full and immediate 30-day pause, proposing instead a halt in attacks only on energy facilities. Peskov said the "main" focus in its talks with the US would be a possible resumption of a 2022 Black Sea grain deal that ensured safe navigation for Ukrainian farm exports via the Black Sea.
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Japan, South Korea and China agreed Saturday that peace on the Korean peninsula was a shared responsibility, Seoul's foreign minister said, in a meeting of the three countries' top diplomats in which they pledged to promote cooperation. The talks followed a rare trilateral summit in May in Seoul where the neighbours – riven by historical and territorial disputes - agreed to deepen ties and restated their goal of a denuclearised Korean peninsula. But they come as US trade tariffs loom over the region, and as concerns mount over North Korea's weapons tests and its deployment of troops to support Russia's war against Ukraine.
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BROKER RATING CHANGES
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RBC cuts 3i Group price target to 3,600 (3,650) pence - 'sector perform'
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UBS raises Phoenix Group price target to 605 (530) pence - 'neutral'
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Peel Hunt cuts JD Wetherspoon to 'hold' (add) - price target 650 (725) pence
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COMPANIES - FTSE 100
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GSK announces the European Medicines Agency has accepted for review its application to expand the use of Nucala, or mepolizumab, as a treatment for patients with chronic obstructive pulmonary disease with an eosinophilic phenotype. The application is supported by results from the pharmaceutical firm's phase 3 Matinee trial, which demonstrated a statistically significant reduction in the annualised rate of moderate and severe exacerbations with mepolizumab, compared to a placebo. COPD affects more than 390 million people across the globe, and over 40 million in Europe alone, GSK notes. If approved, mepolizumab could be the first biologic with monthly dosing for COPD patients. The treatment is currently approved for use in Europe across four interleukin-5 mediated conditions.
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COMPANIES - FTSE 250
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Great Portland Estates acquires Cypress Dynasty, which owns a freehold interest in One Chapel Place, W1, based on a property valuation of GBP56.0 million. One Chapel Place is a 34,230 square foot building currently let at an annual rent of around GBP2.5 million, with office leases due to expire mid-2028. Great Portland Estates plans to "refine" the building's existing designs to improve workspace quality, upgrade amenities and maximise the appeal for any future customers. "Together with the recent purchases of The Courtyard, W1, Whittington House and 19/23 Wells Street, we have now invested GBP162 million into West End acquisitions since our rights issue last summer, or GBP323 million including the capex we intend to invest in the buildings,'' says Senior Investment Manager Alexa Baden-Powell.
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OTHER COMPANIES
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Johnson Service Group Chief Financial Officer Yvonne Monaghan intends to retire after more than 40 years at the company and 17 years in the CFO role. As her replacement, the textile rental and services provider has poached extracts and ingredients manufacturer Treatt's current CFO Ryan Govender, who will step into the role on October 1. Monaghan will remain as CFO until Govender's appointment, following which she will remain at the company until February 28, 2026 to complete the handover process. Prior to his role at Treatt, Govender was CFO at SPI Pharma, owned by FTSE 100 firm Associated British Foods, and has held other senior finance roles for over 20 years.
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Oakley Capital Investments announces its plans to replace cash dividends with share buybacks. The investment firm providing access to funds managed by Oakley Capital announces an annual recurring share buyback programme of at least GBP20 million, reflecting "the board's confidence in the net asset value and its belief that the shares are grossly undervalued". With effect, from 2025, the firm cancels its dividend in favour of share buybacks, as it "does not generate sufficient income to support one". The change will not affect the declared final dividend for 2024. OCI also makes a new EUR500 million commitment to Oakley Capital VI, which is expected to be deployed over five years, with the first significant capital drawdown not expected until 2026. Fund VI will follow Oakley Capital V's strategy of investing in mid-market, private European businesses across the technology, digital consumer, education and business services sectors.
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S4 Capital's pretax loss widens to GBP330.9 million during 2024, from GBP13.9 million the year before, as revenue tumbled 16% to GBP848.2 million from GBP1.01 billion. However, the advertising firm still declares a 1.0 pence per share final dividend, against none the year before, which it deems a "measure of confidence in the future". Looking ahead, the firm expects net revenue and operational earnings before interest, tax, depreciation and amortisation in 2025 at similar levels to 2024, given a "challenging" macroeconomic environment, and intends to continue focusing on costs, eyeing "further action to support" profit. In the longer-term, S4 Capital aims to return operational Ebitda margins to historic levels of 20%.
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By Emily Parsons, Alliance News reporter
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