4th Nov 2015 08:28
LONDON (Alliance News) - Shares were firm at the open Wednesday, ahead of a full slate of European, UK and US economic data.
Glencore led FTSE 100 risers, up 5.8%, after saying it aims to have reduced its net debt by up to 15% before the end of the year. Marks & Spencer also was a top blue-chip gainer, up 3.9%, having reported a slight rise in sales, led by its food halls.
Whitbread shares were down 1.2% after being cut to Hold from Buy by analysts at SocGen.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.7% at 6,425.20
FTSE 250: up 0.3% at 17,248.12
AIM ALL-SHARE: up 0.2% at 746.19
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Hang Seng: closed up 2.2% at 23,053.57
Nikkei 225: closed up 1.3% at 18,926.91
DJIA: closed up 0.5% at 17,918.15
S&P 500: closed up 0.3% at 2,109.79
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GBP: up at USD1.5424 (USD1.5397)
EUR: down at USD1.0929 (USD1.0952)
GOLD: down at USD1,119.49 per ounce (USD1,123.00)
OIL (Brent): up at USD50.25 a barrel (USD49.75)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Wednesday's Key Economic Events still to come
(all times in GMT)
08:45 Italy Markit Services PMI
08:50 France Markit Services and Composite PMI
08:55 Germany Markit Services and Composite PMI
09:00 EU Markit Services and Composite PMI
09:30 UK Markit Services PMI
10:00 EU Producer Price Index
12:00 US MBA Mortgage Applications
13:15 US ADP Employment Change
13:30 US Trade Balance
13:30 Canada International Merchandise Trade
14:45 US Markit Services and Composite PMI
15:00 US ISM Non-Manufacturing PMI
15:00 US Fed Chair Yellen Speech
15:30 US EIA Crude Oil Stocks
22:00 US Fed's Stanley Fischer speech
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Shop prices in the UK were down 1.8% on year in October, the British Retail Consortium and Nielsen said on Wednesday, following the 1.9% contraction in September. Food prices were down 0.4% on year in October, spurred by a 1.0% decline in fresh food prices, after dipping 0.5% in September.
Non-food prices tumbled an annual 2.7%.
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The National Institute of Economic and Social Research lowered its UK growth projections and expects the Bank of England to raise interest rates at the start of next year. The think tank downgraded growth forecast for this year to 2.4% from 2.5% and that for next year to 2.3% from 2.4%. For 2017, it estimated 2.6% expansion.
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Ireland's service sector growth remained robust in October, thought the rate expansion was the weakest since February 2014, survey figures from Markit Economics showed. The seasonally adjusted Investec services purchasing managers' index, or PMI, fell to 60.1 in October from 62.4 in the previous month. However, any reading reading above 50 suggests expansion in the sector.
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China's services activity grew at a pace that was the most pronounced since July suggesting that policy measures have begun to stimulate the economy, a survey from Markit revealed. The Caixin/Markit Purchasing Managers' Index for services rose to 52 in October from a 14-month low of 50.5 in September. Nonetheless, the reading suggests modest growth that was slower than the historical average. The reading shows that previous stimulus policies have begun to take effect, while the economic structure steadily improved, He Fan, chief economist at Caixin Insight Group, said. "The economy has started to show signs of stabilizing, reducing the need for a further stimulus."
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Japan's consumer confidence improved more-than-expected in October, after falling in the prior month, survey data from the Cabinet Office showed. The seasonally adjusted consumer confidence index rose to 41.5 in October from 40.6 in September. Economists had expected the index to increase slightly to 40.8.
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US President Barack Obama will decide on the controversial Keystone XL pipeline project before the end of his presidency in January 2017, despite a request from the project developer to postpone the review, the White House said Tuesday. The "unusual" request from TransCanada is no excuse to spend a year "doing nothing," White House spokesman Josh Earnest said. In February Obama vetoed a bill passed by the Republican-controlled Congress calling for the construction of the 1,900-kilometre-long pipeline, which would pump 830,000 barrels of oil a day from Canada to the Texas Gulf Coast.
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BROKER RATING CHANGES
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TRADERS: RBC CAPITAL RAISES WEIR GROUP TO 'SECTOR PERFORM' ('UNDERPERFORM')
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SOCGEN CUTS WHITBREAD TO 'HOLD' ('BUY') - TARGET 5,220 (5,343) PENCE
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COMPANIES - FTSE 100
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SABMiller said the deadline for Anheuser-Busch InBev to make a formal offer for the company has been extended to Wednesday next week. The two drinks giants have been in discussions over AB InBev's potential GBP68 billion acquisition of SAB and the deadline for the former to either make a formal offer or announce that it does not intend to make an offer had already been extended to Wednesday. It has now been extended again to 1700 GMT on November 11.
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Marks & Spencer Group reported a drop in profit in the first half of its financial year, but a slight rise in sales as its food business once again outperformed the weaker general merchandise division. The clothing, food and homewares retailer said pretax profit in the 26 weeks ended September 26 fell 23% to GBP216.0 million from GBP279.4 million the year before, although revenue grew 1% to GBP4.95 billion from GBP4.90 billion. M&S said that its food business delivered sales growth of 3.3%, offsetting a 0.4% decline in general merchandise.
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Multi-commodities miner and trading house Glencore reiterated its full-year earnings guidance and said it aims to have reduced its net debt by up to 15% before the end of the year. Glencore said it aims to have its net debt down to below USD25.00 billion before the end of 2015 and to have net funding of around USD40.00 billion. If it hits that debt target, it would represent a 15% drop from its net debt at the end of June. In the longer term, net debt is expected to fall to the "low USD20s billion" by the end of 2016. The company also reiterated its full-year guidance to produce earnings before interest and tax of USD2.50 to USD2.60 billion from its marketing division for the full year.
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Advertising and marketing giant WPP said it has acquired a majority stake in digital agency Essence. Essence is a digital media buyer based in London and manages a media spend of more than USD700.0 million. No financial details on the acquisition were disclosed.
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Anglo-South African financial services group Old Mutual said its wealth management business had a strong third quarter though it saw more subdued trading for its asset management and emerging markets businesses. The group, which offers life insurance, investment management and banking services, said gross sales for the group in the three months to the end of September rose 31% to GBP8.1 billion, with sales in its Old Mutual Wealth business rising 45% to GBP5.5 billion following a strong increase in pension sales.
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Housebuilder Persimmon said activity in the UK housing market improved as expected into the autumn season, driving up its private sales rate in the second half so far and keeping pricing robust across its regional markets. The group said its private sales rate has increased 12% year-on-year in the weeks since it published its interim results on August 18, building on the 5.0% increase it posted in the summer weeks following the end of the first half at the end of June.
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Legal & General Group said external net flows into its Legal & General Investment Management business surged in the third quarter and said its assets under management rose, while trading across the rest of the business also proved positive. The life insurer and investment manager said the LGIM business saw external net inflows rise to GBP21.7 billion in the quarter to the end of September, sharply higher than the GBP8.3 billion in flows it reported a year earlier. Total assets under management for LGIM increased to GBP717.0 billion at the end of September, from GBP662.1 billion a year earlier.
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Luxury goods company Burberry Group said it will invest GBP50.0 million in a new manufacturing facility in Yorkshire and will consolidate three of its lines under a single brand. Burberry said it will develop a new manufacturing and weaving facility in South Bank in Leeds providing employment for in excess of 1,000 people. Work on the site will start in 2016 and is due to complete by 2019, the company said. The maker of trench coats, scarfs and other high-end clothing and accessories said the new site will mean its heritage trench will continue to be produced in the UK. Burberry also said it will consolidate its Prorsum, London and Brit labels under the single 'Burberry' brand.
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COMPANIES - FTSE 250
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Property services group Countrywide said its housing sales transaction volumes are set to fall year-on-year after the expected uptick in activity following the UK General Election in May has not materialised. Countrywide said it has traded well across its portfolio, but said housing transactions remain at lower levels year-on-year. For the third quarter to the end of September, total house exchanges fell 8.0% year-on-year and were down 10% for the nine months to the end of September.
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Pub operator JD Wetherspoon saw its shares fall in early trade after it said its operating margin has deteriorated in recent weeks, though like-for-like and total sales have increased. The company said its total sales rose 6.1% in the 13 weeks to October 25, as like-for-like sales rose 2.4%, boosted by the Rugby World Cup taking place in the latter part of the period. But the group's operating margin for the period fell to 6.2%, from 7.7% a year earlier, due to increases in the starting rates for hourly-paid staff, which had added a total of 13% of those costs.
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Stagecoach Group said trading has been in line with its expectations in the first half and affirmed its earnings guidance for the financial year to the end of April 2016. The transport operator said like-for-like revenue growth for its UK regional bus business in the 24 weeks to October 17 was 1.0% on a year before, while its London bus operation delivered like-for-like growth of 1.4%. The company's UK rail business, excluding the Virgin Trains East Coast joint venture, rose 5.8% year-on-year, while the Virgin franchise delivered an 8.7% rise in revenue. The only blackspot was for Stagecoach's North American business, which saw like-for-like revenue fall 5.6% in the period from a year before.
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A fourth person has been arrested in connection with the cyber attack on telecommunications company TalkTalk Telecom Group , the Metropolitan Police said. The Met's Cyber Crime Unit arrested a 16-year-old boy from an address in Norwich following a raid on the property on Tuesday evening. The arrest follows those of three other suspects in the cyber attack. Those suspects were based respectively in Staffordshire, Feltham in west London and in County Antrim in Northern Ireland.
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COMPANIES - LONDON MAIN MARKET AND AIM
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Irish budget carrier Ryanair Holdings said its customer traffic and load factor both improved in October. Ryanair said it carried 9.7 million customers in October, up 15% from the 8.4 million it carried a year earlier. Its rolling annual traffic to the end of October hit 98.6 million customers, a 17% year-on-year rise. The group's load factor for October improved to 94% from 89% a year ago.
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Irish corrugated packaging manufacturer Smurfit Kappa Group said its pretax profit and revenue both advanced in the first nine months of 2015, as volume growth remained robust. The company said its pretax profit for the nine months to the end of September rose 27% to EUR408.0 million from EUR321.0 million a year earlier. For the third-quarter, its pretax profit rose to EUR165.0 million from EUR93.0 million. Revenue for the nine-month period rose to EUR6.02 billion from EUR5.98 billion, though this was broadly flat in the third quarter at EUR2.02 billion against EUR2.03 billion.
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COMPANIES - INTERNATIONAL
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German car giant Volkswagen said it found "irregularities" when determining carbon dioxide emissions levels, which could affect about 800,000 cars in Europe. The company expects the latest problem to cost the firm about EUR2 billion. The affected brands include VW, Audi, Skoda and Seat.
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Japanese automaker Honda Motor reportedly said it would no longer use Takata front driver or passenger air-bag inflaters in new vehicles under development, after alleging the supplier misrepresented and manipulated test data. Auto regulators have fined Takata, the maker of millions of faulty airbags, up to USD200 million for the seven deaths and hundreds of injuries caused by its airbags.
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Honda Motor also reported that its profit attributable to owners of the parent for the second-quarter of fiscal year 2016 rose 6.9% from last year. It reaffirmed its fiscal year 2016 profit and operating profit outlook, while it raised its annual sales revenue outlook.
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Investors have given a thumps up to the privatisation of Japan Post Holdings and two of its financial units, as the firm is attempting to wade into unchartered territory using the licence the privatization process offers. Japan Post and its units Japan Post Bank and Japan Post Insurance surged on the opening day of their initial trade on Wednesday. The company began operations in 1871 and its IPO had been under consideration for more than a decade.
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ING Group reported third-quarter net result of EUR1.064 billion, up 15% from last year's EUR928 million. These figures include the net results of the legacy insurance businesses. Net result from Banking improved to EUR1.078 billion from EUR1.006 billion, amid strong performance in Retail Banking, lower risk costs, growth in core lending and improved margins.
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Electric car maker Tesla Motors reported a third-quarter loss that widened from last year, hurt largely by higher costs which offset an increase in revenues. The company lowered its delivery target for 2015. However, shares of Tesla gained over 9% in the extended trading session. Tesla, based in Palo Alto, California, reported a third-quarter loss of USD229.9 million, wider than last year's loss of USD74.7 million.
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Online retail giant Amazon opened the doors to its first real-world store, a bricks-and-mortar bookshop in the north-western US city of Seattle. Lest there be any confusion, "these aren't metaphorical doors," Amazon Books vice-president Jennifer Cast said. "These real, wooden doors are the entrance to our new store." Amazon Books is intended as a "store without walls," Cast said, with soft lighting and comfortable chairs as a gateway to the company's vast online offerings.
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Wednesday's Scheduled AGMs/EGMs
Ricardo
Sky
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By Tom Waite; [email protected]; @thomaslwaite
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