23rd May 2025 07:51
(Alliance News) - London's FTSE 100 is called to open higher at the end of the week, after US Treasury yields eased and Asian stocks traded largely higher.
Bond market nerves have been a theme so far this week, Pepperstone analyst Michael Brown commented and on Thursday, a US fiscal bill passed the House.
Brown commented:" The passing of the Bill wasn't exactly a surprise, hence I was somewhat surprised to see markets receive the news as poorly as they did, with benchmark 30-year yields briefly trading to 5.15%, and fresh highs since October 2023, even if this was a 'blink and you'll miss it' kind of move.
"I suppose this speaks to the ongoing degree of nervousness around the fiscal backdrop in the US, but also on a global level, where deficit concerns continue to play on the minds of market participants everywhere. Justifiably so, frankly, given that there seems little-to-no desire among governments to get a grip of the situation."
The analyst continued: "That's patently clear here in the UK too, where data yesterday pointed to a GBP20.2 billion budget deficit in April, the 2nd highest on record for the month, excluding the pandemic."
In the UK, numbers showed retail sales growth beat expectations last month.
In early corporate news, AJ Bell announced earnings growth, and Games Workshop predicted a profit hike.
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 8,758.96
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Hang Seng: down 0.1% at 23,514.77
Nikkei 225: up 0.4% at 37,120.15
S&P/ASX 200: up 0.2% at 8,360.90
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DJIA: closed down 1.35 points at 41,859.09
S&P 500: closed down 2.60 points at 5,842.01
Nasdaq Composite: closed up 0.3% at 18,925.73
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US 10-year Treasury yield: 4.52% (4.57%)
US 30-year Treasury yield: 5.03% (5.08%)
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EUR: higher at USD1.1311 (USD1.1285)
GBP: higher at USD1.3445 (USD1.3425)
USD: lower at JPY143.54 (JPY143.81)
GOLD: higher at USD3,325.53 per ounce (USD3,289.44)
(Brent): lower at USD63.96 a barrel (USD64.05)
(changes since previous London equities close)
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ECONOMICS
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Friday's key economic events still to come:
10:00 BST eurozone negotiated wage growth
09:30 BST eurozone European Central Bank Governor Philip Lane speaks
17:15 BST eurozone European Central Bank executive board member Isabel Schnabel speaks
17:00 BST US Federal Reserve Governor Lisa Cook speaks
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UK retail sales rose at a faster pace than expected last month, aided by warm weather, numbers showed. Retail sales volumes expanded 1.2% in April from March, numbers from the Office for National Statistics showed. They had risen 0.1% in March from February, an expansion downwardly revised from an initially reported 0.4% climb. The April reading comfortably topped the FXStreet cited consensus, which had pencilled in growth of 0.2%. "Food store sales volumes grew strongly in April 2025, which retailers attributed to the good weather," the ONS said. Year-on-year, retail sales surged 5.0% in April, the pace of growth accelerating from 1.9% in March, and beating consensus of 4.5%.
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UK consumer confidence increased in May as turbulence around April's US tariffs calmed. GfK's long-running consumer confidence index increased by three points but remains firmly in negative territory at minus 20. The improvement was driven by a five-point increase in confidence in personal finances over the coming year to positive two – although still five points worse than this time last year – and a four-point boost in the outlook for the general economy to minus 16 points, worse than last May. The survey was taken at the beginning of this month, before official figures on Wednesday showed consumer prices index inflation jumped to 3.5% in April, up from 2.6% in March and the highest since January 2024, on the back of household bill rises.
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Recent trade deals with the US, India and the EU will "improve livelihoods" across the UK, Prime Minister Keir Starmer said. Ahead of a meeting with devolved national and regional leaders on Friday, the prime minister sought to highlight the economic benefits of the recent deals. The UK government says Scottish produce such as whisky, salmon and gin will all receive a boost from tariffs being slashed and trade barriers being cut. Ministers say this week's "reset" deal with the EU will address problems experienced by salmon exporters since 2019. Welsh farmers will benefit from the elimination of India's lamb tariffs and the ability to export meat products to the EU. Northern Irish whiskey exports to India will benefit from tariffs halving from 150% to 75% before falling further to 40% over a decade. The Council of Nations & Regions will meet in London on Friday, bringing together political leaders from Scotland, Wales, Northern Ireland and London and English metro mayors.
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Household energy bills in Great Britain will fall by 7% from July, Ofgem has confirmed. The typical bill will drop by GBP129 to GBP1,720 per year when the regulator's new price cap – which sets the limit on how much firms can charge customers per unit of energy – comes into force. This is GBP660 [28%] lower than at the height of the energy crisis at the start of 2023 when the government implemented the energy price guarantee. However, prices remain elevated with the upcoming level GBP152 [10%] higher than the same period last year. Tim Jarvis, director general of markets at Ofgem, said: "A fall in the price cap will be welcome news for consumers, and reflects a reduction in the international price of wholesale gas. However, we're acutely aware that prices remain high, and some continue to struggle with the cost of energy."
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BROKER RATING CHANGES
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Jefferies cuts DCC price target to 6.100 (7,950) pence - 'buy'
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COMPANIES - FTSE 100
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Games Workshop expects to report double-digit climbs in annual revenue and profit. The manufacturer and retailer of miniature wargames expects to post pretax profit of at least GBP255 million for the 52 weeks to June 1, a rise of 26% from GBP203.0 million. Revenue of at least GBP560 million is expected, growth of 13% from GBP494.7 million. Licensing revenue alone is forecast to surge 61% to around GBP50 million. "Licensing revenue in the period is at a record level and we are not expecting this to be repeated in 2025/26. Licensing remains a significant area of focus." it added. Games Workshop said dividends declared and paid for the year totalled 520 pence per share, up 24% from 420p. In March, Games Workshop had said trading in January and February beat forecasts. It predicted at the time that annual pretax profit would be ahead of expectations.
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Phoenix Group Holdings is considering changing its name to Standard Life within the next 12 months, the Financial Times reported on Thursday, citing a person familiar with the situation. Phoenix, a London-based retirement savings provider, bought the Standard Life brand from what is now Aberdeen Group - and which previously had been called Standard Life Aberdeen - back in 2021. The brand traces its history back to 1825 in Edinburgh. In a statement, the FT reported, Phoenix said the proposed name change had not yet been approved by its board.
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COMPANIES - FTSE 250
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AJ Bell reported a rise in customer number and assets under administration in the first six months of its financial year, and it said it will "accelerate business investment" in the second half. The investment platform provider said assets under administration at the end of the six months to March 31 amounted to GBP96.2 billion, an increase of 4.3% from GBP92.2 billion at the end of September. It reported net inflows of GBP3.2 billion, with its AUA also getting a GBP800 million boost from the market and other movement. "I am pleased to report another strong set of first half results. Our dual-channel platform continued to deliver organic growth, adding over 50,000 customers in the period and net inflows of GBP3.3 billion, resulting in AUA surpassing GBP90 billion for the first time. This performance has been driven by our low-cost, easy-to-use propositions, excellent customer service and improved brand awareness, demonstrating the benefits of our continued investment in these areas," Chief Executive Officer Michael Summersgill said. AJ Bell's pretax profit during the six months rose 12% GBP68.8 million from GBP61.4 million a year prior, while revenue climbed 17% to GBP153.2 million from GBP131.3 million. AJ Bell lifted its interim dividend by 5.9% to 4.50p per share from 4.25p. In addition, it announced a GBP25 million share buyback, to be completed before the end of the financial year on September 30. The CEO added: "Looking ahead, there is the potential for policy developments to present further market growth opportunities. In particular, a customer-centred approach to ISA simplification could remove the barriers that currently exist between saving and long-term investing in the ISA system. Such a change to ISAs would be supercharged by Targeted Support, which would allow firms to provide personalised guidance, increasing the number of customers who feel confident to invest for the first time." AJ Bell said it is "confident in the outlook" and as a result, it has decided to boost business investment in the second half of the year. "This has resulted in higher cost guidance, which is more than offset by increases to full-year revenue margin guidance," the company added.
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Assura, in light of receiving a new bid from fellow London listing Primary Health Properties, has adjourned court and general meetings where there would have been votes on an offer from Kohlberg Kravis Roberts. Last week Friday, PHP tabled an offer to acquire care property investor Assura. The revised offer from healthcare facility investor PHP was for 12.5p in cash plus 0.3769 of a new PHP share for each Assura share. Based on PHP's share price at the time, the offer implied a total value of 51.7p per Assura share, valuing the company at GBP1.68 billion. "Having carefully considered the PHP offer with its advisers and consulted with Assura's major shareholders, Assura has engaged in further discussions with PHP and commenced due diligence in relation to PHP to determine whether to recommend the PHP offer to Assura shareholders," Assura said Friday. "In the context of this continued engagement, the Assura board has decided to adjourn the court meeting and the general meeting." The meetings had been due to be held on June 5. On Monday, KKR defended its offer to buy Assura, claiming its all-cash bid remains the superior option. KKR said Monday it "will continue its engagement" with Assura to complete the terms of its recommended cash acquisition at 49.4 pence per share. Assura last month had formally recommended KKR's bid, made via its Sana Bidco vehicle, which is also backed by Stonepeak Partners.
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OTHER COMPANIES
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Begbies Traynor said its annual revenue and earnings were ahead of consensus. The professional services consultancy expects to report adjusted earnings before interest, tax, depreciation and amortisation of GBP31.3 million for the year ended April 30, a rise of 10% from GBP28.5 million. Revenue is expected to have increased 12% to GBP153 million from GBP136.7 million. "The group has delivered double digit revenue and Ebitda growth, ahead of consensus expectations, marking its tenth successive year of profit growth. This reflects strong demand across the breadth of the group's services - from insolvency through to complex restructuring and our broad range of complementary financial and real estate advisory services," Executive Chair Ric Traynor said. "Recent momentum in recruitment for senior roles, together with visibility of fees on current instructions, underpins our confidence in continued organic growth, which we expect to supplement by executing on an encouraging pipeline of acquisitions, enabled by our strong cash generation and balance sheet."
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Epwin, a maker of energy efficient and low maintenance building products, said current trading is in line with internal expectations. Revenue is up 8% annually so far in 2025, Chair Stephen Harrison will say at the firm's annual general meeting on Friday. "Despite ongoing economic and fiscal headwinds, the board remains confident in delivering underlying operating profit for the year in line with its expectations, while continuing to make further strategic and operational progress," Harrison said. "The medium to long-term drivers of the group's end markets remain positive. The UK continues to face a shortage of new and affordable homes, with the government committed to increasing housing supply. At the same time, UK housing stock is ageing, poorly maintained and underinvested, alongside growing concern about the quality of social housing and private rental properties."
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Totally said a sale of subsidiaries is the "only realistic route for the group", as it updated on a strategic review. The provider of healthcare and wellbeing services across the UK and Ireland said it has received a "number of offers for subsidiaries of its business". Earlier in May, it announced a plan to conduct a strategic review. "The purpose of the strategic review announced in the trading update was to strengthen its balance sheet to meet the liabilities of the group over the coming months. The board has now concluded the disposals of the subsidiaries are the only realistic route for the group to fund these liabilities in the required timeframe," Totally said. "The board expects to conclude the sale of the business or parts of the business before the group requires further funding. The potential proceeds however, in the directors opinion, are unlikely to be sufficient to meet all future liabilities meaning there could be no value in the ordinary shares of the company or any likely return to shareholders."
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By Eric Cunha, Alliance News news editor
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Related Shares:
DCCGames WorkshopAJ BellAssuraPrimary HealthBegbiesEpwin GrpTotallyPhoenix Group Holdings