5th Sep 2024 07:56
(Alliance News) - Stocks were called lower in London on Thursday morning, joining Asian peers ahead of the latest jobs data from the US.
In early corporate news, Burberry has been relegated from the FTSE 100 index in the latest reshuffle.
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 16.0 points, or 0.2%, at 8,244.10
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Hang Seng: down 0.5% at 17,371.20
Nikkei 225: down 1.1% at 36,657.09
S&P/ASX 200: closed up 0.4% at 7,982.40
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DJIA closed up 38.04 points, 0.1%, at 40,974.97
S&P 500 closed down 0.2% at 5,520.07
Nasdaq Composite closed down 0.3% at 17,084.30
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EUR: up at USD1.1086 (USD1.1079)
GBP: down at USD1.3146 (USD1.3147)
USD: down at JPY143.20 (JPY144.24)
GOLD: up at USD2,503.20 per ounce (USD2,495.10)
OIL (Brent): down at USD72.97 a barrel (USD73.28)
(changes since previous London equities close)
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ECONOMICS
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Thursday's key economic events still to come:
08:30 EDT Canada labor productivity
09:30 EDT Canada composite PMI
09:30 CEST eurozone construction PMI
11:00 CEST eurozone retail sales
09:30 CEST France construction PMI
11:15 CEST France new car registrations
09:30 CEST Germany construction PMI
11:00 CEST Germany new car registrations
11:00 IST Ireland current account
11:00 IST Ireland GDP
09:30 CEST Italy construction PMI
11:00 SAST South Africa current account
09:00 BST UK new car sales
09:30 BST UK construction PMI
08:30 EDT US initial jobless claims
09:45 EDT US composite PMI
10:00 EDT US ISM services PMI
10:30 EDT US EIA natural gas stocks
11:00 EDT US EIA crude oil stocks
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More regions in the US reported flat or declining economic activity in recent weeks, the Federal Reserve's Beige Book showed on Wednesday. The Beige Book is a Federal Reserve System publication about current economic conditions across the 12 Federal Reserve Districts, published eight times a year. Employment levels were steady overall, with reports of layoffs remaining rare. Five Districts saw slight or modest increases in overall headcounts, but a few Districts reported that firms reduced shifts and hours. Wage growth was modest, while increases in non-labour input costs and selling prices ranged from slight to moderate. Looking ahead, contacts generally expected price and cost pressures to stabilise or ease further in the coming months. Consumer spending ticked down in most Districts, having generally held steady during the prior reporting period. Continuing the more downbeat flavour, manufacturing activity declined in most Districts, with two Districts noting that these declines were part of ongoing contractions in the sector.
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Kamala Harris and Donald Trump returned to the US campaign trail Wednesday, with new polls showing the White House race remains on a knife-edge less than a week before their crucial first debate. As they buckled down for the final two-month sprint to Election Day, the latest spasm of gun violence rippled through the US, with four people killed by a 14-year-old student at a high school in the southern state of Georgia. Vice President Harris, condemning the "senseless tragedy" of the shooting, urged a halt to the "epidemic of gun violence" plaguing the US. She also reiterated her call for a ban on assault weapons – a position widely opposed by Republicans – as she addressed a rally in New Hampshire. Trump, himself the target of an assassination attempt by a gunman in July, said the victims "were taken from us far too soon by a sick and deranged monster."
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Chinese leader Xi Jinping pledged more than USD50 billion in financing for Africa over the next three years and promised to help create at least a million jobs on the continent. Xi's comments came during a speech at the opening ceremony of a massive summit in Beijing, gathering dozens of African leaders to discuss the continent's economic and political ties with China. The sum would comprise "CNY210 billion in credit facilities and CNY80 billion in various types of assistance", while also promoting Chinese firms to invest at least CNY70 billion, Xi said. The Chinese president promised to help "create at least one million jobs for Africa".
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The US State Department denied on Wednesday that China's consul general in New York had been expelled amid a spying row with Beijing, after the state governor asserted that he had been removed. "There was no expulsion action," State Department spokesperson Matthew Miller told reporters, adding that the consul Huang Ping's regularly scheduled diplomatic rotation had happened in August. Hochul had said she had "been informed that the consul general is no longer in the New York mission." Prosecutors on Tuesday announced that a former official who worked as an aide to Hochul was arrested and charged with working as an agent of China in return for millions of dollars.
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BROKER RATING CHANGES
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UBS raises Sage Group to 'neutral' (sell) - price target 1,050 pence
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Citigroup raises RS Group to 'buy' - price target 900 pence
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Barclays cuts BHP Group price target to 2,550 (2,635) pence - 'equal weight'
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COMPANIES - FTSE 100
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Burberry has been relegated from the FTSE 100 index in the latest quarterly reshuffle, reflecting challenging conditions in the luxury goods market. Replacing Burberry will be Hiscox, the Anglo-Bermudan insurance provider, which has seen its share price rise 14% in the year to date, taking its market value above GBP4 billion. In contrast, Burberry's share price has plunged 55% following a number of disappointing trading updates. Burberry will be joined in the FTSE 250 by recently listed, Raspberry Pi, which replaces Alabama-based oil and gas producer, Diversified Energy. Index compiler FTSE Russell said the changes will take effect from the market open on Monday, September 23.
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Associated British Foods said that it has continued to "perform well" in the second half, noting that both its Grocery and Ingredients units have grown in line with expectations. The British weather, however, did manage to dampen Primark's prospects, with like‐for‐like sales expected to decrease by around 0.5% in the second half. Total revenue growth for Primark is expected to be around 4%. For the Sugar unit, AB Foods described a "mixed" performance. The firm said profitability for the unit remains ahead of financial 2023, but is now below previous expectations. It explained this was due to a sharp fall in European sugar prices, which is expected to impact Sugar profitability in financial 2025, before recovering in financial 2026. The Sugar unit is expected to deliver annual adjusted operating profit for financial 2024 of GBP200 million. However, operating profit for the overall segment is now expected to be in the range of GBP50 million to GBP75 million in financial 2025.
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COMPANIES - FTSE 250
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Bakkavor reported interim pretax profit of GBP45.2 million, up from GBP32.6 million a year prior, while revenue came to GBP1.12 billion, up 2.8% from GBP1.09 billion. The firm declared an interim dividend of 3.20 pence per share, up 10% from 2.91p the year previously. It also upgraded its outlook, raising expectations for annual adjusted operating profit to between GBP108 million and GBP112 million. Separately, Bakkavor also announced that Chief Financial Officer & Asia CEO Ben Waldron is due to step down on October 31, though he will stay at the company until the end of April. Replacing him is UK Finance Director Lee Miley, who will become CFO effective November 1.
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OTHER COMPANIES
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Aquila European Renewables has entered into a sale and purchase agreement with Sunnhordland Kraftlag to sell its near 26% interest in Tesla for a consideration of EUR27.1 million. Tesla is a 150 megawatt operating onshore wind farm located in Southern Norway, which was acquired by the company in 2019. The buyer, SKL is a Norwegian energy company with a long history of developing and operating hydropower plants. Chair Ian Nolan said: "Whilst it is pleasing to note the level of interest in this particular asset, and the uplift in valuation that is expected to be achieved, it is clear that different technologies in differing geographies display very variable levels of liquidity and pricing visibility. The board continues to assess these issues and others as part of its ongoing considerations and looks forward to updating the market further in due course."
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By Holly Beveridge, Alliance News senior reporter
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