9th Aug 2024 08:00
(Alliance News) - The London market was looking for a positive end to the week on Friday, amid takeover activity and positive economic data from China.
The FTSE 100 was called to open higher, having lost 0.3% so far this week, as the index has steadily recovered ground after a big drop on Monday in the wake of a global equities sell-off following a weak US jobs report last Friday.
There are no big economic indicators from the US on Friday, but China and Germany both issued inflation reports.
Consumer price inflation in China was stronger than expected in July, hitting a five-month high, providing some positive news on the world's number-two economy, as with officials in Beijing try to boost consumer buying.
The 0.5% annual increase in the consumer price index accelerated from 0.2% in June and marked the sixth straight month of rising prices, according to the National Bureau of Statistics. China endured a period of deflation between October to January, when sliding prices of goods and services heightened worries of an economic slowdown.
July's reading – which beat market forecasts in a survey by Bloomberg – represents the fastest rise in consumer prices since February, when the index increased 0.7% year-on-year.
In Germany, consumer price inflation was 2.3% annually in July or 2.6% on an EU-harmonised basis. Prices rose by 0.3% month-on-month, or 0.5% on a harmonised basis.
In early UK company news, fund supermarket Hargreaves Lansdown accepted a GBP5.44 billion takeover offer from a private equity consortium led by CVC, four months after CVC's first approach.
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 17.6 points, 0.2% at 8,162.57
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Hang Seng: up 1.3% at 17,116.02
Nikkei 225: up 0.6% at 35,025.00
S&P/ASX 200: up 1.3% at 7,777.70
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DJIA: closed up 683.04 points, 1.8%, at 39,446.49
S&P 500: closed up 2.3% at 5,319.31
Nasdaq Composite: closed up 2.9% at 16,660.02
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EUR: higher at USD1.0925 (USD1.0907)
GBP: higher at USD1.2768 (USD1.2720)
USD: flat at JPY147.19 (JPY147.17)
GOLD: higher at USD2,420.20 per ounce (USD2,415.11)
OIL (Brent): higher at USD79.17 a barrel (USD78.92)
(changes since previous London equities close)
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ECONOMICS
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Friday's key economic events still to come:
11:00 IST Ireland industrial production
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UK Prime Minister Keir Starmer has said swift justice, including sentencing, has been a deterrent to more violent disorder. Starmer was speaking on a day when at least a dozen people were jailed for their part in the riots of the past 10 days, with more expected to be sent to prison on Friday, including some on live television. He addressed his third emergency Cobra meeting since the first riot in Southport on July 30 and after many planned protests failed to materialise on Wednesday night. Starmer told the meeting that police need to remain on "high alert", the PA news agency reported. He is understood by PA to have said there was no doubt that levels of policing in the right places and swift justice over the past week, including sentencing, have acted as a deterrent to disorder.
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ABC says both Donald Trump and Kamala Harris have agreed to a September 10 US presidential debate, setting up a face-off between the Republican and Democratic nominees. The announcement on Thursday came shortly after Trump told a news conference that he had proposed three presidential debates with three television networks, saying he agreed on certain dates in September. Trump is rejoining the ABC debate days after posting on his social media network that he would not appear on the network, citing a lawsuit he has filed. His decision sets up a highly anticipated moment in an election where the first debate led to a massive change in the race — with Democratic President Joe Biden ending his re-election bid and endorsing Harris.
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Trump voiced frustration at the independence of the Federal Reserve and suggested that the US president should have "at least a say" over the course of monetary policy. Trump has frequently criticized the actions of Fed Chair Jerome Powell – whom he nominated to lead the independent US central bank – and suggested he may not look to renominate him once his current term expires in 2026. The Fed has "sort of gotten it wrong a lot," Trump told reporters Thursday during a press conference in Palm Beach, Florida. "I feel the president should have at least a say" about monetary policy, he said, adding he had "fought him very hard" on some occasions – an apparent reference to Powell.
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BROKER RATING CHANGES
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Canaccord cuts Future to 'sell' (hold) - price target 733 (660) pence
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Morgan Stanley raises Just Eat Takeaway to 'overweight' (equal-weight)
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JPMorgan raises Ryanair price target to 17.00 (16.50) EUR - 'overweight'
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COMPANIES - FTSE 100
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Wealth management platform Hargreaves Lansdown has agreed to an all-cash takeover offer from a consortium of private equity buyers led by CVC. The offer of 1,140 pence per share consists of 1,110p in cash, plus a final dividend for financial 2024 of 30p, which was declared by Hargreaves on Friday. Hargreaves shares closed on Thursday at 1,077.50p, but its shares have been climbing since CVC made a previous offer of 985p back in April. Hargreaves shares closed at 740.0p on April 11 the day before CVC made its first approach. The new agreed offer values Hargreaves at GBP5.44 billion.
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Hargreaves separately reported its annual results on Friday. Pretax profit was GBP396.3 million in the 12 months that ended June 30, down 2% from GBP402.7 million in financial 2023. Revenue was GBP764.9m, up 4% from GBP735.1m. Assets under administration totalled GBP155.3 billion, up 16% from GBP134.0 billion a year before. Its total dividend for the year is 43.2p, up 4% from 41.5p.
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COMPANIES - FTSE 250
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House builder Bellway provided a trading statement ahead of its annual results on October 15. In the financial year that ended July 31, total housing completions declined to 7,654 at an average selling price of GBP308,000 from 10,945 at GBP310,306 in financial 2023. However Bellway said both figures were slightly ahead of previous guidance. "While a lower starting forward order book drove a reduction in volume output, customer demand during the year has benefitted from a moderation in mortgage interest rates which has helped to ease affordability constraints and supported an increase in reservations," said Chief Executive Jason Honeyman. Bellway said its forward order book stood at 5,144 homes on July 31, up from 4,411 a year before.
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OTHER COMPANIES
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Deliveroo has commissioned Goldman Sachs International to run the GBP150 million share buyback that it announced on Thursday. The programme will run until August next year. The buyback comes as Deliveroo swung to a pretax profit of GBP4.3 million in the half-year that ended June 30 from a loss of GBP57.6 million a year before.
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By Tom Waite, Alliance News editor
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