16th May 2025 07:45
(Alliance News) - London's FTSE 100 is called up on Friday, as the UK prepares for further talks on a potential defence deal with the EU and senior US officials have little optimism for progress on a possible ceasefire in Ukraine.
Meanwhile, the UK government faces calls to delay changes to inheritance tax, as a cross-party committee advocates for the protection of "vulnerable farmers".
"Market sentiment remained tilted toward the upside across the US and European markets yesterday," commented Swissquote analyst Ipek Ozkardeskaya. "In Europe, UK growth and eurozone industrial production surprised to the upside, boosting bulls who see the European economies benefiting from lower energy prices and relatively higher currencies to deal with their inflation battle.
"Combined with government spending prospects, growth in Europe could improve. Yesterday’s numbers somehow supported that view – the Q1 growth in the eurozone was softer than expected, but industrial production made solid progress.
In early corporate news, Land Securities swings to profit, and everplay's chief executive resigns.
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 0.1% at 8,646.25
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Hang Seng: down 0.5% at 23,343.91
Nikkei 225: closed marginally up at 37,761.34
S&P/ASX 200: closed up 0.5% at 8,340.40
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DJIA: closed up 271.69 points, or 0.7%, at 42,322.75
S&P 500: closed up 24.35 points, or 0.4%, at 5,916.93
Nasdaq Composite: closed down 34.49 points, or 0.2%, at 19,112.32
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EUR: up at USD1.1216 (USD1.1178)
GBP: up at USD1.3326 (USD1.3279)
USD: down at JPY145.16 (JPY145.81)
Gold: up at USD3,217.98 per ounce (USD3,213.28)
(Brent): down at USD64.24 a barrel (USD64.28)
(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 BST eurozone European Central Bank executive board member Piero Cipollone speaks
10:00 BST eurozone trade balance
13:30 BST US building permits
13:30 BST US export and import prices
15:00 BST US Michigan consumer sentiment index
16:00 BST eurozone European Central Bank Governor Philip Lane speaks
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The EU and Britain will haggle to the wire over fishing rights and food checks as they seek a deal on closer defence ties at a landmark post-Brexit summit next week. The meeting in London on Monday between UK Prime Minister Keir Starmer and the EU's top officials was planned to bring the first results from London's much-vaunted "reset" in ties. Diplomats in Brussels said negotiations were focused on getting Britain to keep its waters open for European fishermen, in return for the EU easing checks on some food imports from the UK. Other sticking points include an EU push for a scheme allowing young people to move more easily between the two sides that London fears threatens its red line on returning to free movement. "They want everything and they're giving nothing," one European diplomat complained of the British stance, speaking like others on condition of anonymity. The move is aimed at opening the door to closer cooperation as both the EU and Britain race to rearm in the face of the threat from Russia and fears US President Donald Trump will no longer help protect Europe.
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Ministers in the UK have been urged by a cross-party parliamentary group to delay reforms to farming inheritance tax until 2027 over concerns that the changes threaten to hit "the most vulnerable". The Commons Environment, Food & Rural Affairs Committee, which includes seven Labour MPs, said the government had failed to properly consult on the policy, leaving its potential impact "disputed and unclear". From April 2026, a 20% inheritance tax rate will be levied on agricultural assets worth more than GBP1 million, which were previously exempt. This is half the usual rate of 40%. In a report published on Friday, Efra called on the government to push back announcing its final agricultural property relief and business property relief reforms until October 2026, to come into effect in April 2027. The group of MPs suggested that doing so would "allow for better formulation of tax policy" and protect "vulnerable farmers" who would have more time to seek professional advice. It criticised the Department for Environment, Food & Rural Affairs [Defra] for "poor communication and last-minute decision-making following rumours and departmental leaks".
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The amount of tax Revenue & Customs has secured from wealthy people through its compliance work has more than doubled in recent years. HMRC collected GBP5.2 billion from wealthy people through its compliance yield in 2023-24, up from GBP2.2 billion in 2019-2020. The rise suggests there may be higher levels of wealthy taxpayers not complying than previously thought, the National Audit Office said in a report.
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US Secretary of State Marco Rubio said on Thursday he had little hope that Russia-Ukraine talks in Istanbul would produce a peace breakthrough after the two sides traded insults during a tense buildup to negotiations. Russia's President Vladimir Putin decided against going to Istanbul and Ukraine's leader Volodymyr Zelensky sent the country's defence minister but it was unclear what kind of talks would be held between the rivals who have been at war for more than three years. Turkish officials said that "trilateral talks between Russia, Ukraine and Turkey are on the agenda" for Friday and there would be talks between US, Ukrainian and Turkish officials. But Rubio told reporters in Turkey "I want to be frank... we don't have high expectations of what will happen tomorrow". US President Donald Trump also appeared to concede that progress on ending the war was unlikely until he could meet Putin. Zelensky said that Russia was "not serious" about ending the war.
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Tehran has no objection to US companies operating in the country, including in the oil and gas sector, Iranian Foreign Minister Abbas Araghchi said Thursday. "We have no ban on the economic presence of American companies in Iran," Araghchi said, attributing the lack of US business activity to primary sanctions imposed by Washington. "If American companies wish to invest in Iran's economy, the US must lift its own primary sanctions." His remarks come after President Donald Trump said Washington was "getting close" to a new nuclear deal with Tehran to replace the one he abandoned during his first term in 2018.
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Senior German figures are split over Nato spending targets. German Foreign Minister Johann Wadephul on Thursday backed President Trump's demands for Nato members to spend 5% of their GDP on defence, but Chancellor Friedrich Merz and Defence Minister Boris Pistorius urged caution. Currently, Nato members are committed to spending at least 2% of GDP on military expenditure, although not all have achieved the goal. At a meeting with US Secretary of State Marco Rubio, Wadephul said he had made it clear that Germany was prepared to "take a leading role in Europe, set an example and call on others to follow [it]." However, Wadephul made it clear that traditional defence spending of 3.5% of GDP would be sufficient, provided an additional 1.5% was spent on military infrastructure - an approach recently proposed by Nato Secretary General Mark Rutte. "This discussion about percentages of GDP is a makeshift construct to have some benchmark for the direction we are taking with the rearmament of the armed forces," Merz told public broadcaster ZDF.
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Albania could become a member of the EU before the end of the decade, European Council President Antonio Costa said on Thursday. "If Albania continue to deliver at the same rate, it's completely possible to join the EU before 2030," Costa said at a joint press conference with Albanian Prime Minister Edi Rama in Tirana. "But it all depends if you continue or not in the same path." Since 2014, Albania has been an official candidate for EU membership, and negotiations have been ongoing since 2022. The country has been a member of Nato since 2009. Observers have recently noted certain progress in combating corruption.
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BROKER RATING CHANGES
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Barclays raises National Grid price target to 1,250 (1,145) pence - 'overweight'
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Citigroup raises Tate & Lyle to 'buy' - price target 670 pence
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HSBC raises Carnival to 'buy' - price target 1,645 pence
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COMPANIES - FTSE 100
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Land Securities swings to pretax profit of GBP393 million in its financial year that ended March 31, from a GBP341 million loss the year before. This is driven by a net surplus of GBP91 million on the revaluation of investment properties in financial 2025, against a GBP628 million deficit a year prior. Revenue grows 2.2% to GBP842 million from GBP824 million. The company says: "Demand for modern, sustainable office space in London remains strong and in retail, brands continue to concentrate on fewer, but bigger and better stores in key locations." The firm declares a total dividend of 40.4 pence per share, up 2.0% on-year from 39.6p. EPRA net tangible asset value per share rises 1.7% to 874p from 859p. Land Securities records a 6.4% total return on equity for the year, against negative 4.0% the year before. "Our capital allocation decisions from here are about ensuring that the growth outlook for our portfolio in 3-5 years' time is as positive as it is for our current portfolio today," says Chief Executive Officer Mark Allan. "That is why we have set out a clear plan to increase investment in major retail by a further GBP1 billion and establish a GBP2 billion+ residential platform by 2030, to be funded by rotating GBP3 billion of capital out of offices, non-core investments and low or non-yielding pre-development assets. Delivering on this strategy, whilst continuing to drive sustainable income and EPS growth, is our priority and we are firmly underway." Further like-for-like growth, efficiency improvements and portfolio rebalancing aim to enhance long-term growth, with the firm targeting around 20% EPRA earnings per share growth by financial 2030, with around 2% to 4% growth expected for financial 2026.
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Fresnillo sells the majority of its shares in MAG Silver, following precious metals mining firm Pan American Silver's recent deal to acquire MAG Silver. The acquisition means Fresnillo's more than 9% stake in MAG Silver would convert into an interest of less than 1% of Pan American, which Fresnillo believes does not align with its strategic investment objectives. "The proceeds from the sale of shares will be allocated in a disciplined manner in line with Fresnillo's capital allocation priorities, including investment in its growth pipeline and maintaining a strong balance sheet", the company says. Fresnillo remains "confident" in the value and performance of the Juanicipio mine.
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COMPANIES - FTSE 250
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Future delivers pretax profit growth of 21% in the six months that ended March 31, at GBP56.6 million from GBP46.6 million the year before. Revenue, however, declines 3.3% GBP378.4 million from GBP391.5 million. Net operating expenses are down 5.6% to GBP309.3 million from GBP327.8 million, while finance costs are reduced by 30% to GBP12.8 million from GBP18.2 million. "Whilst the wider macroeconomic environment remains challenging, the quality of our content and intent-driven audience, and the uniqueness of our tech stack, underpinned by our strong financial characteristics, position us well to deliver long term growth in what is an ever-evolving media landscape," says Chief Executive Officer Kevin Li Ying. Future expects a low single-digit decline in financial 2025 organic revenue, and continues to anticipate a stable adjusted operating margin of 28%. Beyond financial 2025, the group expects to deliver accelerating organic revenue growth.
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OTHER COMPANIES
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everplay announces Chief Executive Officer Steve Bell steps down with immediate effect, to be replaced by Non-Executive Chair Frank Sagnier as interim executive chair. The company will begin the recruitment process for a new CEO "in due course". Non-Executive Director Penny Judd will take up the role of senior independent director. Sagnier says: "As interim executive chair, I look forward to working with the broader leadership team as the business continues to execute on its strategic priorities: to accelerate growth alongside improving profitability, with an elevated focus on first-party IP, our evergreen franchises and improved returns." everplay reiterates that trading for financial 2025 remains in line with its recently-upgraded expectations, and believes the group to be well positioned for growth over the medium to long term. The company expects to issue an interim trading update in early July.
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By Emily Parsons, Alliance News reporter
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