11th Apr 2023 07:55
(Alliance News) - Stocks in London are called to open higher on Tuesday, with European markets expected to begin the abbreviated week strongly following the long Easter weekend.
Financial markets in London, Frankfurt and Paris were closed for Good Friday and Easter Monday. Markets in New York closed on Friday, but reopened on Monday.
Early Tuesday, official figures showed China's consumer price inflation fell below 1% in March - a sign of weak demand as the world's second-largest economy tries to recover from its pandemic-driven slump.
The March consumer price index – the main gauge of inflation – came in at 0.7%, down from the 1% seen a month earlier, according to the country's National Bureau of Statistics.
Beijing is targeting an average inflation rate of 3% for 2023, which is still far below the current rates of many developed economies.
In early local economic news, retail sales growth remained stable in March, while an indicator from BDO showed an easing of UK inflation to its lowest reading in a year.
In early UK company news, Harbour Energy and BP announced they will collaborate on the Viking carbon capture and storage project, and Hollywood Bowl reported record interim revenue amid strong customer demand.
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 51.4 points, 0.7%, at 7,792.96
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Hang Seng: up 0.3% at 20,399.48
Nikkei 225: closed up 1.1% at 27,923.37
S&P/ASX 200: closed up 1.3% at 7,309.90
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DJIA: closed up 101.23 points, 0.3%, at 33,586.52
S&P 500: closed up 0.1% at 4,109.11
Nasdaq Composite: closed marginally lower at 12,084.36
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EUR: down at USD1.0891 (USD1.0919)
GBP: down at USD1.2413 (USD1.2436)
USD: firm at JPY133.36 (JPY131.72)
Gold: down at USD2,000.92 per ounce (USD2,009.21)
(Brent): up at USD84.91 a barrel (USD84.48)
(changes since previous London equities close)
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ECONOMICS
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Tuesday's key economic events still to come:
11:00 CEST EU retail trade
08:55 EDT US Johnson Redbook retail sales index
12:30 CDT US Fed Chicago President Austan Goolsbee speaks
16:30 EDT US API weekly statistical bulletin
17:30 MDT US Fed Minneapolis President Neel Kashkari speaks
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UK Prime Minister Rishi Sunak is focusing on fulfilling the promise of the Good Friday agreement as he prepares to host US President Joe Biden in Northern Ireland on Tuesday to mark 25 years of the peace deal. Sunak said "making good" on the pledge of a "better future" for the nation is first and foremost on his mind ahead of the anniversary. The commemorations come amid a heightened terror threat in Northern Ireland and power-sharing in Stormont remaining collapsed amid post-Brexit tensions.
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UK inflation is still rising rapidly, but has fallen to its lowest point for a year, a poll of polls by accountancy firm BDO has suggested. BDO's inflation index dropped by 2.19 points, the consultants said, falling to 110.99 points. A score above 95 means that inflation is growing. It is the lowest score since March 2022, but still high by historical standards as the cost of living continues to bite households and costs rise for businesses. The drop was mainly driven by a fall in what BDO calls the input inflation subindex which tracks the prices that businesses face when producing a product or a service.
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UK retail sales growth remained stable in March, according to data from a British Retail Consortium-KPMG monitor. Total UK retail sales increased 5.1% in March against the previous year, slowing from an increase of 5.2% in February. This was above the three-month average growth of 4.8%, however, as well as the 12-month average of 2.6%. Like-for-like retail sales increased 4.9% in March against the previous year, unchanged from February. The like-for-like figure was also above the three-month average growth rate of 4.6% and the 12-month average of 2.1%.
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BROKER RATING CHANGES
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Barclays raises Persimmon to 'equal weight' (underweight) - price target 1,300 pence
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Citigroup raises Tui to 'neutral' (sell) - price target 8.55 EUR
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Morgan Stanley raises AstraZeneca to 'overweight' (equal-weight)
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COMPANIES - FTSE 100
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AstraZeneca said it has simplified its contractual arrangements with Sanofi and Swedish Orphan Biovitrum, or Sobi, concerning the development and commercialisation of nirsevimab in the US. Sobi has now entered a direct relationship with Sanofi, as opposed to the previous participation agreement with Astra in late 2018. "As a result of this simplification agreement, Sanofi will pay royalties to Sobi as US nirsevimab sales arise, and the liability related to future obligations is eliminated. AstraZeneca will record a gain of USD700 million, to be recognised in core other operating income in 2023," the firm said. Its financial guidance for 2023 is unaffected by the development, it confirmed.
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Sky Bet and Paddy Power owner Flutter Entertainment is setting the stage to appoint John Bryant as its new chair, according to Sky News on Saturday. According to Sky, the FTSE 100-listed gambling firm is in talks with Bryant, a US-based businessman, and senior independent director at catering company Compass Group. Citing a person "close to the process", Sky reported that the appointment of Bryant was at an advanced stage, but was not yet finalised. It was "unclear" whether other candidates were in talks with group over the weekend, Sky said. The move comes amid Flutter's plans for an additional US listing.
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COMPANIES - FTSE 250
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Harbour Energy said it has agreed with BP to develop the Viking carbon capture & storage transportation and storage project. Harbour will continue as operator, with a 60% interest, and BP will acquire the remaining 40% non-operated stake. The arrangement brings together "two of the most experienced operators in the North Sea", the firms said. The news follows the UK government's decision to launch track 2 of its CCS cluster sequencing process, and "its recognition that Viking CCS is one of two leading transport and storage system contenders for this process", Harbour said. Subject to the outcome of the track 2 cluster sequencing process, Harbour said a final investment decision is expected in 2024. "The project could be operational as early as 2027 and potentially storing up to 10 million tonnes of CO2 per year by 2030," it added.
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OTHER COMPANIES
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Hollywood Bowl said revenue in the half-year ended March 31 was up 11% year-on-year to a record GBP111.1 million. The ten-pin bowling operator noted "continued strong customer demand", with like-for-like revenue growth of 3.5%. During the period, it opened Hollywood Bowl Speke and Puttstars Peterborough, which are both trading "ahead of management's expectations". While "mindful" of the economic backdrop, Hollywood said it is confident of its prospects for financial 2023 as a whole. "Our highly cash generative business model and insulation from cost of goods and energy inflationary pressures, leaves us well-placed to continue to expand and invest in our portfolio, both in the UK and Canada," said Chief Executive Stephen Burns.
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Beleaguered cinema chain Cineworld updated on its Chapter 11 proceedings in the US, filing a plan of reorganisation in a Texas bankruptcy court and a disclosure agreement. It reiterated the plan has support from lenders holding a majority of its various debt instruments. It seeks to confirm the plan on an "expeditious" timeline, and confirms the restructuring does not allow for recovery of any shareholder value. "During the restructuring process, Cineworld continues to operate its global business and cinemas as usual without interruption," it said.
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By Elizabeth Winter, Alliance News senior markets reporter
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