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LONDON BRIEFING: Labour landslide ends 14 years of Tory leadership

5th Jul 2024 07:43

(Alliance News) - Stocks in London are called to open higher on Friday, after Labour's landslide victory in the UK general election.

"With the general election behind us - and more political uncertainty and hopefully less scandals ahead - the Labour win is seen as being net positive for the pound and the British stocks," said Ipek Ozkardeskaya at Swissquote Bank.

Still to come on Friday is the US nonfarm data. The US is expected to have added 190,000 new nonfarm jobs in June, easing from 272,000 a month earlier.

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 0.3% at 8,262.70

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Hang Seng: down 1.0% at 17,847.27

Nikkei 225: closed down slightly at 40,912.37

S&P/ASX 200: closed down 0.1% at 7,822.30

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US financial markets closed for Independence Day

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EUR: higher at USD1.0822 (USD1.0812)

GBP: higher at USD1.2770 (USD1.2765)

USD: lower at JPY160.66 (JPY161.16)

GOLD: higher at USD2,364.90 per ounce (USD2,358.90)

OIL (Brent): lower at USD87.08 a barrel (USD87.44)

(changes since previous London equities close)

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ECONOMICS

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Friday's key economic events still to come:

08:30 EDT Canada unemployment

11:00 CEST eurozone retail sales

14:15 CEST eurozone European Central Bank executive board member Frank Elderson speaks

19:15 CEST eurozone European Central Bank president Christine Lagarde speaks

09:00 CEST Germany Deutsche Bundesbank President Joachim Nagel speaks

08:30 EDT US unemployment

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Labour leader Keir Starmer will be the next UK prime minister as his party reached over 326 seats, with the majority set to grow as the morning progresses. Starmer retained his Holborn & St Pancras seat. Starmer said "we did it" at a victory party, adding "change begins now".

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Rishi Sunak said voters in the UK delivered a "sobering verdict" and he takes his "responsibility" for the Conservative party's bruising defeat. In his acceptance speech after retaining his Richmond & Northallerton seat, Sunak said: "The Labour Party has won this general election and I have called Sir Keir Starmer to congratulate him on his victory." Sunak added: "Today, power will change hands in a peaceful and orderly manner with goodwill on all sides."

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Annual growth in UK house prices quickened last month, but edged lower on a monthly basis, numbers from mortgage lender Halifax showed Friday. UK house price growth quickened to 1.6% in June on-year, from 1.5% in May. Prices edged 0.2% lower in June from May, having being flat a month earlier. The monthly rise in June was expected to be 0.2%, according to FXStreet-cited consensus. The average UK house price in June was GBP288,455, lower compared to GBP288,931 in May. Halifax noted that Northern Ireland records the strongest annual house price growth in the UK. "This continued stability in house prices – rising by just +0.4% so far this year – reflects a market that remains subdued, though overall activity has been recovering. For now it's the shortage of available properties, rather than demand from buyers, that continues to underpin higher prices," said Halifax Head of Mortgages Amanda Bryden.

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BROKER RATING CHANGES

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Jefferies cuts Softcat to 'underperform' (buy) - price target 1,490 (1,950) pence

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COMPANIES - FTSE 100

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Glencore has received approval from the Government of Canada for the acquisition of a 77% stake in Elk Valley Resources from Teck Resources. The USD6.9 billion purchase was announced back in November. The transaction is now expected to close on July 11. Chief Executive Gary Nagle said: "We are pleased to have received final regulatory approval for the transaction and look forward to completing the acquisition and welcoming EVR into the Glencore Group. Glencore's Canadian assets form a significant part of our global business, and some have a history that dates back more than 100 years. The investment in EVR will further support our position as one of the largest diversified miners and suppliers of critical minerals in Canada."

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Oil firm Shell posted its current expectations for the second quarter of 2024. It said its outlook for Integrated Gas production is 940,000 to 980,000 boed. For Upstream, production is anticipated to be between 1,720 and 1,820 kboe/d. Marketing sales volumes are expected to be between 2,700 and 3,100 kb/d.

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OTHER COMPANIES

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PipeHawk said that its financial position is now "under severe financial pressure." The company said that it is now taking steps to potentially place its subsidiary QM Systems into administration. In March, PipeHawk said that QM experienced a number of challenges, including a reduction in the number of orders as well as the value of orders received. However, the company believed that it would receive two material orders. Yet, on Friday, PipeHawk said that the orders "will not be forthcoming."

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1Spatial said trading for the full year is expected to be in line with expectations. It said that it has secured "several new contracts" in Europe and the US. Non-Executive Chair Andrew Roberts said: "The group has a strong order book, a growing recurring revenue stream and substantial sales pipeline underpinning the board's confidence in the outturn for FY25. We believe the investments we continue to make in people and technology have positioned the business well to take advantage of the huge opportunity ahead."

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By Sophie Rose, Alliance News senior reporter

Comments and questions to [email protected]

Copyright 2024 Alliance News Ltd. All Rights Reserved.

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