24th Dec 2024 07:57
(Alliance News) - Stocks were called to open in the green on Monday, as markets prepare to close early on Christmas Eve.
"It's never too late to believe in Santa," commented Swissquote's Ipek Ozkardeskaya, explaining: "Investors on Monday were shrugging off the bad news of past week – especially the one that suggested that the [US] Federal Reserve would cut its rates only two times in 2025 due to a too resilient US economy. Yesterday's data showed that the US durable goods orders fell more than expected in November, the new home sales rebounded slightly less than expected and the consumer confidence unexpectedly dropped in December.
"This bag of bad news helped in tempering the latest hawkish shift in Fed expectations. As such, the buyers are out and buying."
Going forward, she said: "Meagre news and data flow should keep the focus on a more hawkish Fed. The pullbacks in the US dollar are probably good opportunities to buy the dips against most majors...Two stellar years of more than 20% gains for the S&P 500 definitely calls for correction. But no one is willing to leave the festive table, just yet."
In corporate news, Vistry released a somewhat unexpectedly pessimistic trading update prompted by transaction delays. Also, Windward has accepted a GBP216 million takeover offer.
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 55.4 points, 0.7%, at 8,158.12
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Hang Seng: up 1.2% at 20,121.91
Nikkei 225: down 0.3% at 39,036.85
S&P/ASX 200: up 0.2% at 8,220.90
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DJIA: closed up 66.69 points, 0.2% at 42,906.95
S&P 500: closed up 0.7% to 5,974.07
Nasdaq Composite: closed up 1.0% at 19,764.89
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EUR: slightly lower at USD1.0395 (USD1.0399)
GBP: higher at USD1.2537 (USD1.2525)
USD: lower at JPY157.01 (JPY157.12)
GOLD: higher at USD2,620.91 per ounce (USD2,611.83)
OIL (Brent): higher at USD72.99 a barrel (USD72.09)
(changes since previous London equities close)
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ECONOMICS
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Tuesday's key economic events still to come:
08:55 EST US Redbook index
10:00 EST US new home sales
10:00 EST US Richmond Fed manufacturing index
US building permits
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The UK government has launched a consultation into the phase-out of petrol and diesel cars by 2030. Automotive and charging experts will be invited to share their views, as the government claim the consultation will "restore clarity" for vehicle manufacturers and the charging industry. Transport Secretary Heidi Alexander launched the consultation to ask for views from industry players on how to deliver Labour's manifesto commitment to restore the 2030 phase-out date for new purely petrol and diesel cars. The 2030 date had been extended to 2035 by the previous government. Currently, more than two-thirds of car manufacturers in the UK, including Nissan and Stellantis, have already committed to transitioning fully to electric cars by 2030. The consultation proposes updates to the Zero Emission Vehicle Mandate, which sets out the percentage of new zero-emission cars and vans manufacturers will be required to sell each year up to 2030.
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A US government panel failed to reach a consensus on whether US Steel's acquisition by Nippon Steel threatens Washington's national security, shifting the decision to the White House, the Japanese company said. The deadlock by the Committee on Foreign Investment in the US means the controversial USD14.9 billion transaction will now be referred to President Joe Biden, who is legally required to act within a 15-day deadline. Biden has criticised the deal for months, joining a loud consensus of US power players who have slammed the transaction, including President-elect Donald Trump and the incoming vice president, JD Vance. The deal became ensnared in the 2024 presidential campaign when Pennsylvania emerged as a critical swing state and leaders of the United Steelworkers union loudly opposed the transaction. Nippon officials had hoped to have more success after the election, but there have been few signs of change in the dynamics.
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French President Emmanuel Macron named a new government, putting together a team under Francois Bayrou, his fourth prime minister of the year, to drag the second-largest EU economy out of its political crisis. Macron named former prime minister Elisabeth Borne, 63, education minister in a new cabinet under centrist Bayrou, announced Elysee secretary-general Alexis Kohler. Another former premier, Manuel Valls, 62, returned as overseas territories minister, while former interior minister Gerald Darmanin became justice minister. Both Defence Minister Sebastien Lecornu and Foreign Minister Jean-Noel Barrot kept their jobs, the presidency said.
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El Salvador's Congress approved a bill promoted by President Nayib Bukele to roll back a ban on the mining of gold and other metals. El Salvador became the world's first country to outlaw metal mining in 2017, warning of the harmful effects of the chemicals used. The move by Bukele's predecessor Salvador Sanchez Ceren reflected a growing rejection of mining by rural communities in the region. But last month, Bukele signalled that he wanted to change course, noting: "If we make responsible use of our natural resources, we can change the economy of El Salvador overnight." Critics fear that mining will pollute the Lempa River, which runs through a potential mining zone and supplies water to 70% of the inhabitants of the capital and surrounding areas. The new law stipulates that the state will be the only entity authorised to search for, extract and process mined metals. However, the government may do so through companies in which it is a shareholder. The bill prohibits the use of mercury in mining operations, which may not be carried out in protected natural areas or places with important water sources.
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Israeli Prime Minister Benjamin Netanyahu told lawmakers that "some progress" had been made in negotiations to secure the release of hostages held in Gaza. His comments in parliament came two days after Palestinian militant groups also talked of progress towards a ceasefire and hostage release deal. In recent days, indirect negotiations between Israel and Hamas mediated by Qatar, Egypt, and the US took place in Doha, rekindling hope of an agreement that has proven elusive. "Everything we are doing cannot be disclosed. We are taking actions to bring them back. I wish to say cautiously that there has been some progress, and we will not stop acting until we bring them all home," Netanyahu said in parliament, on the same day he took the stand again in his ongoing corruption trial. Hostage families have questioned the sincerity of government negotiation efforts, and critics have long accused Netanyahu of stalling in truce talks, prolonging the war partly to appease his far-right coalition partners.
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COMPANIES - FTSE 100
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AstraZeneca announced that it and Japanese pharmaceutical firm Daiichi Sankyo have voluntarily withdrawn their marketing authorisation application in the EU for datopotamab deruxtecan as a treatment for adults with locally advanced or metastatic nonsquamous non-small cell lung cancer. The application was based on results from the TROPION-Lung01 phase 3 trial. AstraZeneca said the decision to withdraw was informed by feedback from the Committee for Medicinal Products for Human Use of the European Medicines Agency. "AstraZeneca and Daiichi Sankyo will continue to work to bring [Dato-DXd] to patients with lung cancer in the EU who can benefit and are committed to unlocking the potential of this medicine in lung cancer through our robust clinical development programme which includes seven pivotal trials in various lung cancer settings," AstraZeneca said. The firms' application for Dato-DXd for hormone receptor-positive, HER2-negative metastatic breast cancer is still under review.
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COMPANIES - FTSE 250
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Vistry announced that it expects around GBP250 million in adjusted pretax profit for 2024, compared with its previous target of about GBP300 million. It said this is "primarily due to delays to expected year-end transactions and completions". Vistry also expects around GBP200 million in net debt at December 31, although it has seen "significant cash inflow in the closing weeks of the year". Explains that various agreements with partners are taking longer to conclude than expected and should now be completed in 2025. Also, some open market completions expected this year were delayed. "In addition, the group has chosen not to proceed with a number of proposed transactions where the commercial terms on offer were not sufficiently attractive," Vistry says, adding that it "believes more attractive options will be available in FY25".
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OTHER COMPANIES
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Windward announced that it has agreed to a recommended cash acquisition offer by FTV VIII LP and associates, which values its share capital at approximately GBP216 million. Windward shareholders will be entitled to receive 215 pence per share in cash, although this price assumes that Windward shareholders will not receive any dividend, distribution or other return of capital after this announcement. "[FTV] believes that Windward is a highly attractive business with a strong management team and strategy, and that the acquisition represents an attractive opportunity to increase exposure to the growing maritime compliance and supply chain end market," Windward said. "The acquisition also represents an opportunity for enhanced data and AI-led insight across the ecosystem."
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MP Evans has decided to extend its share buyback programme, increasing the budget to up to GBP12 million. The firm will therefore have up to GBP2 million extra for buybacks from Tuesday until March 20. "The board maintains the view that its overall business and its assets are currently undervalued, with the current enterprise value being below the independent valuation of its assets," MP Evans said. "The group's robust balance sheet continues to provide an opportunity to repurchase shares at advantageous levels, as part of its overall approach to capital allocation, which will focus on the long-term value creation for shareholders."
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Kooth said it plans to launch a share buyback programme worth up to GBP1.5 million, "to increase the number of shares held in treasury for use in meeting future obligations arising from the company's long-term incentive plan and/or other share-based reward plans". The youth digital mental health care provider added that its shares "significantly undervalue" it. Kooth therefore believes that "utilising [our] strong balance sheet to minimise dilution arising from share options is in the best interest of all shareholders". It said it may exceed 25% of the average daily trading volume - the limit laid down by the UK Market Abuse Regulation - and therefore may not benefit from the relevant exemption under the MAR.
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By Emma Curzon, Alliance News reporter
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