21st Mar 2025 07:48
(Alliance News) - London's FTSE 100 is set to open slightly lower on Friday, in the aftermath of a slew of rate decisions.
The Bank of England on Thursday joined the US Federal Reserve and Bank of Japan in keeping rates unmoved.
"I do get the feeling that markets are waiting for a bit of a catalyst here. Clearly, tariff jitters remain as we move towards the 2nd April reciprocal levies announcement, with uncertainty on that front only likely to ramp up before then. Furthermore, the data docket becomes rather quiet over the next week or so, meaning growth worries are unlikely to be put to bed any time soon. Consequently, this risk-averse meandering seems like it will continue for some time to come," Pepperstone analyst Michael Brown commented.
"It's also worth bearing in mind that today marks the end of the FOMC's blackout period, while also being 'Quadruple Witching' as US index futures and options, plus single stock options, all expire."
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 0.1% at 8,694.39
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Hang Seng: down 2.0% at 23,740.42
Nikkei 225: down 0.2% at 37,677.06
S&P/ASX 200: up 0.2% at 7,931.20
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DJIA: closed down 11.31 points at 41,953.32
S&P 500: closed down 0.2% at 5,662.89
Nasdaq Composite: closed down 0.3% at 17,691.63
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EUR: lower at USD1.0837 (USD1.0847)
GBP: lower at USD1.2938 (USD1.2964)
USD: higher at JPY149.28 (JPY148.78)
GOLD: lower at USD3,032.40 per ounce (USD3,035.20)
(Brent): higher at USD72.10 a barrel (USD71.89)
(changes since previous London equities close)
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ECONOMICS
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Friday's key economic events still to come:
15:00 GMT eurozone consumer confidence
11:00 GMT Ireland wholesale prices
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UK public sector borrowing spiked in February, numbers on Friday showed, to the fourth-highest level since records began. According to the Office for National Statistics, public sector borrowing amounted to GBP10.71 billion last month, slightly higher than GBP10.58 billion a year prior. Numbers in January had showed a surplus of GBP13.32 billion, due to tax receipts usually being higher that month. "The current budget deficit - borrowing to fund day-to-day public sector activities - was GBP3.3 billion in February 2025; this was GBP1.0 billion less than in February 2024 and the lowest February deficit since 2022," the ONS said. "Borrowing in the financial year to February 2025 was GBP132.2 billion; this was GBP14.7 billion more than at the same point in the last financial year and the third highest financial year-to-February borrowing since monthly records began in 1993." The ONS noted that the Office for Budget Responsibility forecast that public sector borrowing would total GBP127.5 billion for the whole of the financial year ending this month. An updated OBR forecast with come on Wednesday, the day of the UK government's spring economic statement. Public sector net debt, excluding public sector banks, stood at 95.5% of gross domestic product at the end of February. The ONS said it remains at "levels last seen in the early 1960s".
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There was a marginal improvement in UK consumer confidence in March, amid a "fragile" outlook for the year ahead, figures show. GfK's consumer confidence index increased by one point to minus 19, with expectations for the general economic situation over the next 12 months improving by two points to minus 29, six points lower than a year ago. Expectations for personal finances over the next 12 months fell by one point to positive 1, while the major purchase index, a measure of confidence in buying big ticket items, remained unchanged at minus 17. The indices are calculated by market research firm GfK as part of the UK consumer confidence barometer using responses to a monthly survey of individuals aged 16 and above from a representative sample of the population.
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The EU is delaying tariffs against the US until the middle of April, senior officials said on Thursday. The measures were devised in response to US President Donald Trump's increase in tariffs on all steel and aluminium imports to 25%. The bloc was set to impose measures on goods from the US worth some EUR26 billion in two phases, on April 1 and April 13. The tariffs will target steel and aluminium products, but also American beef, poultry, bourbon, motorcycles, peanut butter and jeans. But Trump also plans to impose "reciprocal" tariffs by increasing US duties to match the tax rates that other countries charge on imports. Trump also threatened a 200% alcohol duty. "I can confirm that we decided to adjust the timing of the entry into force of tariffs," European Commission President Ursula von der Leyen said. Von der Leyen said that the commission's goal is "to get the balance of products right, reflecting the interests of our producers, our exporters, our consumers, and of course, minimise the potential negative impact on our economy." EU trade commissioner Maros Sefcovic said that delaying the measures would allow the EU to better understand the possible impact of Trump's reciprocal tariffs and work out how best to respond.
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BROKER RATING CHANGES
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HSBC raises Sainsbury's to 'buy' - price target 285 pence
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Jefferies cuts Wood Group to 'hold' (buy) - price target 50 (190) pence
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COMPANIES - FTSE 100
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International Consolidated Airlines Group's British Airways warned on Friday that the closure of Heathrow airport, its main hub, would significantly affect operations. Europe's busiest airport shut down early on Friday after a fire at a nearby substation supplying power to the sprawling facility west of London. "This will clearly have a significant impact on our operation and our customers and we're working as quickly as possible to update them on their travel options for the next 24 hours and beyond," British Airways said in a statement.
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COMPANIES - FTSE 250
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JD Wetherspoon said a rise in national insurance contributions and pay will lift annual costs by around GBP60 million, and the pub firm reported a rise in half-year revenue. Pretax profit in the 26 weeks to January 26 spiked 58% to GBP41.3 million from GBP26.1 million a year earlier. Revenue improved 3.9% to GBP1.03 billion from GBP991.0 million. Wetherspoon got a GBP8.5 million boost to profit from "separately disclosed items", compared to a GBP9.9 million hit a year prior. Included in these items this time around was a GBP11.1 million boost from the positive movement in the value of interest rate swaps. Last year, it had suffered property losses totalling GBP15.2 million, hurting its bottom line. Before separately disclosed items, pretax profit for the half-year just gone fell 8.6% to GBP32.9 million from GBP36.0 million. Like-for-like sales rose 4.8% on-year during the 26 weeks. In the seven weeks to March 16, growth picked up slightly to 5.0%, Chair Tim Martin said. Martin added: "Increases in national insurance and labour rates will result in company cost increases of approximately GBP60 million per annum, which amount to approximately GBP1,500 per pub, per week. Since labour costs are around 35% of the pub industry's sales, compared to around 11% for supermarkets, increases of this nature inevitably have a disproportionate impact on pubs, exacerbating the already-wide price differential for customers between the on and off-trade. The combination of much higher VAT rates for pubs than supermarkets, combined with increased labour costs will weigh heavily on the pub industry." The company expects a "reasonable outcome for the financial year, subject to our future sales performance". Wetherspoon declared a 4.0 pence per share half-year dividend. It did not pay an interim dividend a year prior.
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Asos expects half-year earnings to beat expectations. In its results for the year ended September 1, published back in November, the online fashion retailer predicted a "significant improvement in profitability" this year. For the half-year, it expects revenue growth in line with consensus, and adjusted earnings before interest, tax, depreciation and amortisation to be ahead. It puts adjusted Ebitda consensus at GBP34 million. For the year ended March 3, 2024, it swung to adjusted loss of GBP16.3 million, from an adjusted Ebitda of GBP4.6 million. Asos added on Friday: "Encouragingly Asos own brand full-price sales, a core engine of its customer proposition, returned to growth in the first half. This was enabled by its market-leading Test & React model, now more than 15% of own-brand sales and growing, ensuring Asos can offer the most exciting product and set the trends for its fashion-loving customers."
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Energean said the planned sale of its portfolio in Egypt, Italy and Croatia to Carlyle has been terminated. Thursday was the longstop date for the deal, the energy production, development and exploration company noted. "As of the longstop date, certain regulatory approvals in Italy and Egypt were not obtained by Carlyle [or waived], in accordance with the terms of the binding sale and purchase agreement," Energean said. "Additionally, the company has not been able to reach agreement with Carlyle to extend the longstop date beyond 20 March 2025. Accordingly, the company has today terminated the SPA and will no longer proceed with the transaction." Energean in June last year announced it would sell its oil and gas portfolio in Egypt, Italy and Croatia in order to focus on its gas fields in Israel and Morocco. The company said the deal was worth up to USD945 million. In May, it will update on production and financial guidance including the portfolio that will now not be sold. It will also present a "strategy update on the forward-plan opportunities for the Egypt, Italy and Croatia assets" and report a new dividend policy.
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OTHER COMPANIES
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Ceres Power recorded a sharp rise in annual revenue and a narrowed loss. The clean energy technology developer reported a pretax loss of GBP25.9 million, slimming from GBP53.6 million in 2023. Revenue more than doubled to GBP51.9 million from GBP22.3 million. "2024 was a record year for Ceres, as our teams continued to deliver best in class technology and global partnerships during a period of significant change in the energy markets and a challenging economic environment. We now have three major global manufacturing partners establishing factories to produce Ceres-based products," Chief Executive Officer Phil Caldwell said. "For 2025, we are focusing on building our partner portfolio and delivering technology milestones, whilst looking forward to Doosan commencing production in the second half of the year." In February, Germany's Bosch announced plans to discontinue some work in the solid oxide fuel cells space and exit its minority holding in Ceres Power. Ceres said on Friday: "The termination of the Bosch contract on 20 February, while disappointing, will have limited financial impact in the low single digit millions of euros for 2025."
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By Eric Cunha, Alliance News news editor
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International AirlinesSainsbury'sWood Group (J)Ceres PowerEnergean Oil & GasASOSWetherspoon (J.D)