16th Jul 2024 08:08
(Alliance News) - Stock prices in London opened slightly lower on Tuesday, after a mixed day in Asia and despite positive noises on interest rates by US and UK central bankers.
The dollar was higher against the pound, euro and yen.
US Federal Reserve Chair Jerome Powell on Monday said recent data lifts the central bank's confidence that inflation is coming down towards its 2% target – a trend that signals interest rate cuts on the horizon.
"We didn't gain any additional confidence in the first quarter but the three readings in the second quarter, including the one from last week, do add somewhat to confidence," Powell said in an interview with David Rubenstein of the Economic Club of Washington DC.
While the central bank has focused largely on inflation – which surged in the wake of the pandemic – it is now also closely monitoring its mandate of promoting maximum employment, Powell added.
"If we were to see an unexpected weakening in the labour market, then that might also be a reason for reaction by us," he said.
In the UK, a Bank of England rate-setter said interest rates should be cut in order to stop squeezing the living standards of British households. Swati Dhingra, a member of the UK central bank's nine-strong Monetary Policy Committee, said "now is the time" for a reduction in the bank rate.
UK interest rates are currently at a 16-year-high of 5.25% after they were increased in a bid to tackle soaring inflation.
In early company news among London listings, Experian said its operations chief will depart to become CEO of US software firm McAfee.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: down 0.4% at 8,150.34
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Hang Seng: down 1.3% at 17,774.07
Nikkei 225: closed up 0.2% at 41,275.08
S&P/ASX 200: closed down 0.2% at 7,999.30
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DJIA: closed up 210.82 points, 0.5%, at 40,211.72
S&P 500: closed up 0.3% at 5,631.22
Nasdaq Composite: closed up 0.4% at 18,472.57
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EUR: down at USD1.0888 (USD1.0912)
GBP: down at USD1.2954 (USD1.2984)
USD: up at JPY158.57 (JPY157.85)
GOLD: down at USD2,432.90 per ounce (USD2,436.88)
(Brent): down at USD84.23 a barrel (USD84.83)
(changes since previous London equities close)
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ECONOMICS
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Tuesday's key economic events still to come:
10:00 BST eurozone trade balance
10:00 BST eurozone ZEW economic sentiment survey
10:00 BST Germany ZEW economic sentiment survey
13:30 BST US export and import prices
13:30 BST US retail sales
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UK Business Secretary Jonathan Reynolds will say a "confident, outward-looking" UK is "open for business" at the G7 trade ministers' meeting. He will set out the new Labour government's strategy to reset relations and remove barriers to trade during his first international visit as Business & Trade secretary. The trip comes in the same week that the new EU relations minister heads to Brussels, and Prime Minister Keir Starmer hosts the European Political Community summit at Blenheim Palace. At the meeting in Italy on Tuesday, Reynolds will address his G7 counterparts as well as businesses.
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BROKER RATING CHANGES
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RBC starts Domino's Pizza with 'outperform' - price target 400 pence
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RBC starts Team17 with 'outperform' - price target 360 pence
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RBC starts Auction Technology with 'sector perform' - price target 540 pence
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COMPANIES - FTSE 100
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B&M European Value Retail reported revenue of GBP1.35 billion in the first quarter of its financial year, the three months that ended June 29. This was up 2.4% at constant exchanges. In the UK, revenue was up 1.5% in total, though like-for-like revenue was down 3.5%. B&M blamed a strong comparative from a year before and poor weather in the UK in April and May.
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Experian said Chief Operating Officer Craig Boundy will leave in August to become chief executive officer of virus-blocking software firm McAfee. The announcement came as the credit-checking firm said revenue increased by 7% in the first quarter, or 8% at constant exchange rates. Organic revenue growth also was 7%.
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COMPANIES - FTSE 250
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Ocado Group narrowed its pretax loss to GBP153.9 million in the first half of its financial year, the 26 weeks that ended June 2, from GBP289.5 million a year before, as revenue grew by 13% to GBP1.54 billion from GBP1.37 billion. Revenue grew by 22% in Technology Solutions, by 5.6% in Logistics, and by 11% in Retail. For the full year, the online grocer and technology provider guided 15% to 20% revenue growth for Technology Solutions, stable revenue for Logistics, and "mid-high single digits" percentage revenue growth for Retail.
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Vitruvian Partners sold 12.5 million shares in Trustpilot, a 3.0% stake, in a share placing. The sale at 220 pence was worth GBP27.5 million. It was conducted as an accelerated bookbuild by Berenberg. Vitruvian continues to 9.5 million shares in the Copenhagen-based consumer reviews platform.
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OTHER COMPANIES
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Payments firm Wise said underlying income was GBP325.4 million in the first quarter of its financial year, up 22% from a year before. It still expects underlying income for all of financial 2025 to increase by 15% to 20%. The rising income was thanks to an 18% increase in transaction volume to GBP33.2 billion. The increase in volume was 20% at constant currency. Wise had 8.4 million active customers in the first quarter, up 26% from a year before. "We're pleased to start the new financial year on a positive note, with strong momentum in active customer and volume growth," Co-founder & Chief Executive Officer Kristo Kaarmann said.
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Bloomsbury Publishing, whose titles include the Harry Potter series, said it is trading in line with recently upgraded expectations, with a strong performance in the first four months of its financial year, which runs to the end of February next year. Bloomsbury put current consensus market expectations at profit before tax and special items of GBP37.6 million on revenue of GBP319.3 million. This would be down from GBP48.7 million profit on GBP342.7 million in revenue in financial 2024. Bloomsbury is holding its annual general meeting on Tuesday.
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Compagnie Financiere Richemont reported a marginal decline in sales in the first quarter of its financial year as its business in Asia Pacific cast a shadow over an otherwise "resilient" performance. The Swiss luxury goods firm said total sales were EUR5.27 billion the three months that ended June 30, down 0.9% from EUR5.32 billion a year earlier. Sales were up 1% at constant exchange rates, however, Richemont said. The company reported growth across all regions, except for Asia Pacific. Sales in Asia Pacific declined 19% at actual currency rates to EUR1.81 billion from EUR2.24 billion. The sales decline in Asia reflected both a low level of consumer confidence and strong comparatives, Richemont explained. The sales update followed a profit warning from British luxury peer Burberry on Monday, also hurt by falling sales in Asia.
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By Tom Waite, Alliance News editor
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