5th May 2023 07:56
(Alliance News) - Stocks in London were called higher on Friday, as investors mulled over the latest interest rate decisions in the US and the EU and ahead of the US nonfarm payrolls report.
Early Friday, new data showed German manufacturing orders in March saw their worst decline since the outbreak of Covid.
Meanwhile, in the UK, local elections results were being tallied. The ruling Tories appear to have suffered major losses in Rishi Sunak's first electoral test as prime minister, with the opposition Labour party claiming the results suggest leader Keir Starmer will be able to replace him in No 10.
In early company news, InterContinental Hotels announced a robust first-quarter recovery in revenue, and its CEO will depart next month. Meanwhile, British Airways owner International Consolidated Airlines reported a stronger-than-expected performance across all of its airlines.
On Friday afternoon, London time, there will be the latest US jobs print. Nonfarm payrolls net additions are expected to have slowed to 179,000 in April from 236,000 in March, according to FXStreet.
Before that, there's a UK construction PMI at 0930 BST, and EU retail sales at 1000 BST.
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 30.7 points, 0.4%, at 7,733.34
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Hang Seng: up 0.5% at 20,056.13
Nikkei 225: Tokyo market closed for Children's Day
S&P/ASX 200: closed up 0.3% at 7,213.10
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DJIA: closed down 286.50 points, or 0.9%, at 33,127.74
S&P 500: closed down 29.53 points, or 0.7%, at 4,061.22
Nasdaq Composite: closed down 58.93 points, or 0.5%, at 11,966.40
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EUR: up at USD1.1039 (USD1.1002)
GBP: up at USD1.2602 (USD1.2565)
USD: flat at JPY133.99 (JPY133.94)
GOLD: down at USD2,046.32 per ounce (USD2,049.92)
OIL (Brent): up at USD73.13 a barrel (USD72.38)
(changes since previous London equities close)
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ECONOMICS
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Friday's key economic events still to come:
Japan Children's Day holiday. Financial markets closed.
11:00 CEST EU retail trade
09:30 BST UK construction PMI
08:30 EDT US employment report
11:00 EDT US services PMI
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German factory orders fell 11% year-on-year in March, worsening from the 6% decline reported in February, official data showed. From the previous month, orders fell 11% in March, compared to rising 4.5% in February. "This is the strongest decline since the breaking down of new orders in April 2020 as a result of the corona pandemic," Destatis said.
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The UK's Labour Party took Medway off the Tories and will run the Kent council for the first time since 1998. Labour gained control of Plymouth, where the Tories had run a minority administration, then did the same in Stoke-on-Trent, another general election battleground. In Hertsmere, where Deputy Prime Minister Oliver Dowden is MP, the Tories lost control of the council, with 13 councillors voted out while Labour gained seven and the Lib Dems six. Tamworth, Brentford, North West Leicestershire and East Lindsey also fell from Tory administrations to no overall control. West Lindsey remained under no overall control but the Lib Dems replaced the Tories as the largest party.
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BROKER RATING CHANGES
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RBC raises Spire Healthcare to 'outperform' (sector perform) - price target 270 (230) pence
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COMPANIES - FTSE 100
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British Airways-owner International Consolidated Airlines reported a strong performance in the first quarter, as capacity recovered to close to pre-pandemic levels. Revenue rose 71% year-on-year to EUR5.89 billion from EUR3.44 billion. Loss before tax narrowed substantially to EUR121 million from EUR916 million. The performance was stronger than expected at all of its airlines, with BA returning to profit for the first since the beginning of 2019. The outperformance was mostly thanks to leisure demand in both longhaul and shorthaul, IAG said. "We are seeing healthy forward bookings with leisure demand particularly strong while business travel continues to recover more slowly," said CEO Luis Gallego. IAG raised guidance for annual pre-exceptional operating profit to above the top end of previous guidance of EUR1.8 to EUR2.3 billion.
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InterContinental Hotels updated on trading in the first quarter. Revenue per available room rose 33% year-on-year. RevPAR was up 18% in the Americas, up 68% in Europe, Middle East & Africa, and by 75% in Greater China. RevPAR also was ahead of pre-pandemic 2019 levels in all regions, except Greater China, where it remained down 9.1%. "We look forward to making additional progress over the course of 2023 in further evolving our brand portfolio, increasing RevPAR and expanding our system size," said CEO Keith Barr. Additionally, IHG announced Barr will step down at the end of June, to return to his family in the US. He will be succeeded by Elie Maalouf, who currently is head of Americas.
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COMPANIES - FTSE 250
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Ithaca Energy said it has signed an agreement with Shell setting out a marketing process for some or all of Shell's 30% working interest in the Cambo field in the UK North Sea. Shell has decided to sell its stake after an internal review. The agreement allows for a range of possibilities, but Ithaca will retain a 50% stake in Cambo in all eventualities. It also gives Shell the option of selling any of its stake, which is not sold to a third party, to Ithaca. This will follow the conclusion of a six-month marketing process. "Securing a new owner for Shell's stake is an important step in Ithaca Energy progressing to final investment decision," CEO Alan Bruce explained.
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OTHER COMPANIES
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Irish gasification company Eqteq reported a weaker annual performance in 2022. Revenue fell to EUR8.0 million from EUR9.2 million. Pretax loss widened to EUR10.5 million from EUR4.7 million, due to a EUR4.7 million investment impairment related to North Fork project in California. "Eqtec in 2022 reaffirmed its business strategy, strengthened its growth platform and toughened its resolve," said CEO David Palumbo.
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By Elizabeth Winter, Alliance News senior markets reporter
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