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LONDON BRIEFING: FTSE 100 called up on week of central bank decisions

18th Mar 2024 07:44

(Alliance News) - Stocks in London are expected to tread water on Monday, as investors look ahead to a busy week of interest rate decisions.

Major Japanese media and economists are now betting that the Bank of Japan will drop its negative interest rate policy.

The central bank is scheduled to start a two-day policy board meeting on Monday, with Governor Kazuo Ueda's press conference scheduled for Tuesday afternoon.

Citing "sources close to the matter", the Japan Times said the BoJ's policymakers have the requisite confidence that a "virtuous cycle" of wage growth and price hikes is taking place.

An interest rate decision from the US Federal Reserve will follow on Wednesday, with the Bank of England making its own decision the following day.

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 0.1% at 7,736.10

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Hang Seng: up 0.1% at 16,744.93

Nikkei 225: closed up 2.7% at 39,740.44

S&P/ASX 200: closed up 0.1% at 7,675.80

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DJIA: closed down 190.89 points, 0.5%, at 38,714.77

S&P 500: closed down 33.39 points, 0.7%, at 5,117.09

Nasdaq Composite: closed down 155.36 points, 1.0%, to 15,973.17

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EUR: down at USD1.0887 (USD1.0889)

GBP: down at USD1.2731 (USD1.2735)

USD: up at JPY149.12 (JPY149.04)

Gold: down at USD2,147.33 per ounce (USD2,162.90)

(Brent): up at USD85.61 a barrel (USD85.33)

(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 EDT Canada PPI

11:00 CET eurozone CPI

11:00 CET eurozone trade balance

10:00 CET Spain trade balance

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Rising house prices in March show that sellers may be overconfident, with buyer demand putting upward pressure on prices, according to new data from the Rightmove house price index. The average price of newly marketed properties rose GBP5,279, or 1.5% in March to GBP368,118. While prices always experience a springtime boost, Rightmove said, this tracks ahead of the historic average increase of 1.0% for the month of March, and represents the biggest monthly increase in ten months. However, average prices are still GBP4,776 below their peak in May 2023, and "more consumers are seeing a window of opportunity to buy", according to Rightmove analysts. The number of agreed sales was 13% higher than the same time in 2022, with buyer demand 8% ahead over the same period, and London seeing the greatest year-on-year increase. However, Rightmove warned that the market "remains sensitive to pricing and external events", with buyer demand somewhat tempered by a "lacklustre" spring budget, which offered no direct assistance for first-time buyers.

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BROKER RATING CHANGES

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RBC cuts Centrica to 'sector perform' (outperform) - price target 145 (140) pence

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COMPANIES - FTSE 100

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Haleon said that Pfizer intends to sell approximately 630 million Haleon ordinary shares through a public offer. Haleon said that it will buy back the shares for about GBP315 million. On completion, the sale is expected to reduce Pfizer's interest in Haleon to approximately 24% from 32%.

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Aviva said it has completed the disposal of its shareholding in Singapore Life, together with two debt instruments, for total proceeds of GBP937 million. The London-based insurance company first announced the sale back in September. Singapore Life Holdings was formed in 2020 from the merger of Singlife and Aviva Singapore. At the time, Aviva explained that the the exit from the joint venture is part of its effort to simplify its business and focus on the UK, Ireland and Canada.

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COMPANIES - FTSE 250

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Marshalls reported that revenue in 2023 fell to GBP671.2 million from GBP719.4 million a year earlier. Pretax profit tumbled by 40% to GBP41.0 million from GBP47.9 million. On the back of the results, Marshalls lowered its final dividend by 42% to 5.7p from 9.9p. This brings the full year dividend to 8.3p, down 47% from 15.6p. Marshalls said that revenue in the first two months of the year was lower than 2023 and reflects the continued weakness seen in the second half of last year. "In line with recent sentiment of UK economic and industry forecasts, the Board expects activity levels to remain subdued in the first half of the year followed by a modest recovery in the second half as the macro-economic environment progressively improves. The start of this recovery is now expected to be slower and more modest than previously assumed," the company explained. Therefore, Marshalls believes that revenue in 2024 will be lower than previously expected and that profit will now be at a similar level to 2023.

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Bytes Technology updated markets on its financial year ended February 29. The company said it delivered growth "comfortably" in double digits in its key metrics of gross profit and adjusted operating profit, and cash conversion in line with its target of 100%, resulting in a cash position of approximately GBP89 million at the year end. Interim Chief Executive Officer Sam Mudd commented: "Our board, management and staff should be very proud of the performance delivered last year and celebrating a record year for the group. We remain committed to our successful strategy of delivering great customer service to our existing customers, acquiring new customers and increasing our share of their IT expenditure." In February, Bytes was hit by the shock resignation of Chief Executive Neil Murphy. The company said Murphy had resigned with immediate effect after disclosing to the board a number of undisclosed trades in the company. The trades were not disclosed to the company or the market in compliance with the PDMR disclosure requirements, it added. On Monday the company said: "Given Mr Murphy's longstanding leadership position in the company, the board of directors is saddened as well as shocked by Mr Murphy's actions, which it finds hard to comprehend. His actions were entirely at odds with the values of openness, honesty, and transparency which have been and which remain central to the group's culture and to its ongoing success."

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Currys confirmed that JD.com has not made an offer for the firm. In February, the Beijing-based company said that it was considering acquiring of the electricals retailer. JD had until Tuesday to make an offer for the company, but on Friday said that, "following careful consideration", it had opted against making an acquisition proposal. However, JD added that it reserves the right to make an offer for Currys within the next six months. In February, Currys rejected an unsolicited GBP702.8 million takeover offer by Elliott Advisors, a London-based private equity firm. This proposal was raised to GBP757 million, but an additional rejection led Elliott to walk away from the table earlier in March.

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OTHER COMPANIES

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Celsius Resources, a mineral explorer focused on portfolio of copper-gold resources in the Philippines, said the Philippine government's Department of Environment & Natural Resources has approved mining permit for Celsius's flagship Maalinao-Caigutan-Biyog copper-gold project. The permit is for 25 years, renewable for another 25 years. Celsius said the permit is the first approved in the Philippines in the past 15 years. It grants local subsidiary Makilala Mining Co Inc the exclusive right to undertake exploration, development, and commercial production of copper in the MCB area. "The grant of the MCB mining permit marks the progression of Celsius from being known as an exploration company to a mineral resource developer, and eventually a mine operator," said Celsius Managing Director Peter Hume. Celsius also entered a mineral production sharing agreement with the Philippine government. The stock closed up 15% in Sydney on Monday.

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By Sophie Rose, Alliance News senior reporter

Comments and questions to [email protected]

Copyright 2024 Alliance News Ltd. All Rights Reserved.

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