20th Aug 2024 07:49
(Alliance News) - Stocks in London are called to open lower on Tuesday, as investors look ahead to a key inflation reading from the eurozone.
In early economic news, China's central bank left its key lending benchmark rates unchanged as expected on Tuesday.
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 0.2% at 8,336.20
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Hang Seng: down 0.4% at 17,495.20
Nikkei 225: closed up 1.8% at 38,062.92
S&P/ASX 200: closed up 0.2% at 7,997.70
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DJIA: closed up 236.77 points, 0.6%, at 40,896.53
S&P 500: closed up 1.0% at 5,608.25
Nasdaq Composite: closed up 1.4% at 17,876.77
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EUR: up at USD1.1074 (USD1.1063)
GBP: down at USD1.2974 (USD1.2980)
USD: up at JPY147.25 (JPY146.55)
GOLD: down at USD2,501.30 per ounce (USD2,503.87)
OIL (Brent): down at USD76.96 a barrel (USD79.33)
(changes since previous London equities close)
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ECONOMICS
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Tuesday's key economic events still to come:
08:30 EDT Canada CPI
10:00 CEST eurozone current account
11:00 CEST eurozone construction output
11:00 CEST eurozone CPI
11:00 CEST eurozone negotiated wage growth
08:55 EDT US Redbook index
13:35 EDT US Atlanta Fed President Raphael Bostic speaks
14:45 EDT US Federal Reserve Vice Chair Michael Barr speaks
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China's central bank left its key lending benchmark rates unchanged as expected on Tuesday. The People's Bank of China left its one-year loan prime rate at 3.35%, as anticipated by market consensus cited by FXStreet, as well as the consensus of Bloomberg-surveyed economists. The five-year loan prime rate was kept at 3.85%. In July, China's central bank surprised the market with an interest rate cut, when it decided to lower the one-year loan prime rate, which serves as the benchmark for corporate loans, to 3.35% from 3.45%. The five-year loan-prime rate had been cut to 3.85% from 3.95% that month.
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Producer price deflation slowed as expected in Germany last month, Federal Statistical Office reported. Producer prices fell by 0.8% in July on-year, in line with FXStreet expectations. In June, the index fell by 1.6%. "In July 2024, lower energy prices continued to be the main reason for the year-on-year decline in producer prices, while higher prices had to be paid for consumer and capital goods," Destatis explained. On-month, PPI edged up by 0.2% in July, also in line with expectations. In June, the index had risen by the same amount.
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BROKER RATING CHANGES
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Jefferies cuts Whitbread price target to 3,900 (4,000) pence - 'buy'
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Jefferies raises Howden Joinery price target to 1,090 (1,042) pence - 'buy'
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Berenberg raises Judges Scientific price target to 12,400 (12,000) pence - 'buy'
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COMPANIES - FTSE 100
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Antofagasta reported that revenue in the first half of 2024 edged up by 2.3% to USD2.96 billion from USD2.89 billion a year earlier. Pretax profit, however, fell to USD712.6 million from USD764.5 million. Copper production volumes declined to 284,700 tonnes from 295,500 tonnes. Total operating costs increased to USD2.28 billion from USD2.12 billion. Antofagasta also said that it has cut its interim dividend by 33% to 7.9 US cents from 11.7 cents. It said that its growth programme remains "on track", with construction of the Centinela Second Concentrator currently ahead of schedule and initial groundworks commencing at Los Pelambres' desalination plant expansion, concentrate pipeline and El Mauro enclosures. Antofagasta anticipates copper demand to climb 2% to 3% per year through to 2030, driven by the energy transition.
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AstraZeneca's Fasenra has been approved in China by the country's National Medical Products Association for the maintenance treatment of patients 12 years of age and older with severe eosinophilic asthma. It explained that the approval is based on results from the MIRACLE Phase III trial, which was conducted in China, South Korea and the Philippines. Ruud Dobber, executive vice president of Astra's BioPharmaceuticals Business unit, said: "Today's approval is an important step forward in the treatment of severe asthma in China, which affects millions of patients. Those living with severe asthma will soon have access to Fasenra, which rapidly targets eosinophils, resulting in a significant reduction of asthma exacerbations and clinically meaningful symptom relief for patients."
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Weir Group said it has been awarded a GBP53 million contract to provide "industry-leading energy efficient, sustainable solutions" to the Reko Diq copper-gold project, a 50% owned greenfield development by Barrick Gold. The copper project is located in the Chagai district of Balochistan and is targeting first production in 2028 with an estimated mine life of over 40 years. Weir noted that the first call-off order of GBP26 million, which includes both ENDURON large format High Pressure Grinding Rolls and wet screens, will be recognised in quarter three with the remaining orders booked later in 2024 and early 2025. Chief Executive Jon Stanton said: "We are delighted to have secured this significant contract which represents further industry acceptance of Weir's differentiated sustainable and cost-effective redefined flowsheet solution, with our market leading HPGR technology particularly suited for the water-scarce climate and geology of the Reko Diq copper-gold project."
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COMPANIES - FTSE 250
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John Wood reported that revenue in the first half of the year fell by 4.8% to USD2.84 billion from USD2.99 billion a year earlier. Its pretax loss from continuing operations widened to USD961.7 million from USD26.0 million. It explain that the loss was due to accounting for exit from turnkey and large-scale EPC work. Further, it has took a non-cash goodwill impairment in Projects due to legacy acquisitions. CEO Ken Gilmartin said: "As we look ahead, we remain confident that our strategy, actions we are taking and growth potential across our markets will deliver significant value for our shareholders. We are pleased to reconfirm our outlook today, both for 2024 and 2025, including generating significant free cash flow in 2025."
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OTHER COMPANIES
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Gran Tierra announced plans to takeover i3 Energy, with the offer implying a value of GBP174.1 million. Under the terms of the acquisition, each i3 Energy Shareholder will be entitled to receive one New Gran Tierra Share per every 207 i3 Energy Shares held; and 10.43 pence cash per i3 Energy Share. In addition, each i3 Energy Shareholder will be entitled to receive a cash dividend of 0.2565 pence per i3 Energy Share in lieu of the ordinary dividend in respect of the three month period ending September 30. The acquisition implies a value of 13.92 pence per i3 Energy Share and approximately GBP174.1 million for the total share capital of i3, whose shares had closed at 9.63p each on Monday, giving it a market capitalisation of GBP115.8 million. Gran Tierra said it expects takeover of i3 Energy to become effective in the final quarter of the year. Gran Tierra said i3 Energy directors consider terms of acquisition "fair and reasonable."
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The search for British technology tycoon Mike Lynch and his daughter will resume on Tuesday after a luxury yacht sank in a tornado off the coast of Sicily. The pair are among six tourists missing after the yacht, named Bayesian, was battered during intense storms off the coast of Palermo in the early hours of Monday. The BBC, which reported searches are due to resume later on Tuesday morning, said Morgan Stanley International Bank Chair Jonathan Bloomer and Clifford Chance lawyer Chris Morvillo were among those missing. Italy's fire brigade Vigili del Fuoco said on X that early inspections of the wreck were "unsuccessful" due to limited access to the bridge and furniture obstructing passages. A body, believed to be that of the vessel's cook, has been discovered. Four of the missing passengers are British and two are American, Italian news website la Repubblica said. Lynch, who founded software giant Autonomy in 1996, was in June was cleared of conducting a massive fraud relating to an USD11 billion sale to US company Hewlett Packard.
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By Sophie Rose, Alliance News senior reporter
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