28th Jun 2016 07:27
LONDON (Alliance News) - Share prices in London have opened higher for the first time since the UK voted to leave the European Union last week, as the responses to that dramatic decision continue to dominate the news and markets Tuesday.
Here is what you need to know at the London market open:
----------
MARKETS
----------
FTSE 100: up 2.0% at 6,101.59
FTSE 250: up 2.8% at 15,387.10
AIM ALL-SHARE: up 0.8% at 682.28
----------
Hang Seng: down 0.5% at 20,124.05
Nikkei 225: closed up 0.1% at 15,323.14
DJIA: closed down 1.5% at 17,140.24
S&P 500: closed down 1.8% at 2,000.54
----------
GBP: up at USD1.3288 (USD1.3207)
EUR: up at USD1.1056 (USD1.0999)
GOLD: down at USD1,314.68 per ounce (USD1,320.10)
OIL (Brent): up at USD47.92 a barrel (USD47.15)
(changes since previous London equities close)
----------
ECONOMICS AND GENERAL
----------
Tuesday's Key Economic Events still to come
(all times in BST)
0900 Italy business and consumer confidence
0900 EU ECB President Draghi speech
1100 UK CBI distributive trades survey
1330 US gross domestic product and GDP price index
1330 US personal consumption expenditures prices
1355 US Redbook index
1400 US S&P/Case-Shiller home price indices
1500 US consumer confidence
1500 US Richmond Fed manufacturing index
2130 US API weekly crude oil stocks
----------
Standard & Poor's Global Ratings downgraded the sovereign ratings of the UK by two notches as the 'Brexit' will weaken the predictability, stability and effectiveness of policymaking. Fitch Ratings also trimmed the UK ratings, but by one notch to 'AA' from 'AA+'. According to S&P, the lack of clarity will hurt confidence, investment, GDP growth and public finances. "Uncertainty surrounding possibly long-lasting negotiations around what form the UK's new relationship with the EU will look like will also pose risks," the agency said. Consequently, S&P lowered the ratings of the UK to 'AA' from 'AAA' and the outlook remained negative. The negative outlook reflects the multiple risks emanating from the decision to leave the EU, exacerbated by its reduced capacity to respond to those risks.
----------
UK Prime Minister David Cameron is to face leaders of other EU states for the first time since the referendum vote for Brexit, as he travels to Brussels for what is likely to be his last European Council summit as Prime Minister. Government sources said that the PM would use the potentially awkward meeting to urge the other 27 leaders and EU institutions to take a "constructive" approach to negotiations over a new relationship with the UK. But he will resist pressure for an early start to the two-year talks process, insisting that it is a matter for his successor as PM to decide when to issue formal notification of Britain's intention to leave the EU under Article 50 of the Lisbon Treaty.
----------
Theresa May has overtaken Boris Johnson in the race to become the next prime minister, according to polling. The Home Secretary and former London mayor are among leading Tories who are expected to spend the day drumming up support for potential leadership bids ahead of nominations opening on Wednesday. May is favoured by 31% of Conservative voters against 24% for Johnson, according to the YouGov poll. Chancellor George Osborne, meanwhile, said it was clear he could not provide the unity the party needed as he ruled himself out of standing in the contest.
----------
Beleaguered Labour leader Jeremy Corbyn is facing the prospect of most of his MPs voting to oust him as Labour's bitter civil war threatens to tear the UK political party apart. Furious Labour MPs told the leader to his face that he must quit for the good of the party at a heated meeting in parliament on Monday night. But a defiant Mr Corbyn is refusing to bow to "a corridor coup" despite losing around 40 members of his front bench team in just two days. MPs will vote on the no-confidence motion in a secret ballot that, while not binding, will heap further pressure on the Islington North MP.
----------
Jeremy Hunt has said there should be a second referendum on Britain's terms for leaving the European Union. The Health Secretary, writing in the Daily Telegraph, said the public did not vote on the conditions of the country's departure and has called for a deal to be negotiated, then put before the electorate. He also said the government as part of its plan, needs to make it clear that remaining in the single market is an "explicit national objective" as well as doing "everything possible to restore stability".
----------
Scottish First Minister Nicola Sturgeon will Tuesday seek backing from the Scottish Parliament to pursue talks aimed at protecting Scotland's place in the European Union. The First Minister will call for cross-party support for discussions with EU institutions and member states in an emergency debate at Holyrood. MSPs are gathering for the first time since Thursday's referendum which saw the UK vote to leave the EU by a margin of 52% to 48%. In Scotland, voters opted to retain membership by 62% to 38%.
----------
Germany, France and Italy are "united" - even in the face of British plans to exit the EU - and aim to set a "new impulse" for the bloc to boost security, economic growth and competitiveness, German Chancellor Angela Merkel said. Merkel spoke after meetings with French President Francois Hollande, Italian Prime Minister Matteo Renzi and EU President Donald Tusk that were overshadowed by divisions on whether to pressure Britain into a quick divorce.
----------
US Federal Reserve chairwoman Janet Yellen will skip this week's European Central Bank conference, the Fed said in Washington. Yellen had initially planned to attend the closely observed event, and no reason was given for her change of plans. It was not clear if the decision was influenced by last week's Brexit vote.
----------
The EU remains committed to free trade deals it is pursuing with the US and Canada, irrespective of Britain's decision to leave the bloc, Trade Commissioner Cecilia Malmstrom said. Negotiations on the agreements face headwinds, amid criticism from anti-establishment forces on both sides of the Atlantic. With Britain - a key proponent of free trade - now on course to leave the EU, the deals on the table may come under new scrutiny.
----------
Irish Prime Minister Enda Kenny said his government will "take steps to protect economic stability in Ireland" following Britain's vote to leave the EU, adding that the fallout from the vote should not affect Ireland's budget for 2017. Kenny recalled the Irish parliament to discuss the implications of Brexit Monday amid fears that Ireland's economic recovery could be compromised.
----------
Rio de Janeiro needs money from the Brazilian government or risks an Olympics "failure," the state governor said in an interview published. "We can organize a great Olympic Games, but if certain measures aren't taken, it can be a great failure," Rio de Janeiro state Governor Francisco Dornelles told O Globo newspaper. Without an infusion of funds from federal coffers, money to fuel police cars will run out this week, he said.
----------
Roy Hodgson resigned as England manager after Monday's 2-1 shock loss to Iceland in the last 16 of Euro 2016. The decision followed defeat to a country with a population of just over 330,000 that was playing its first major tournament.
----------
BROKER RATING CHANGES
----------
GOLDMAN RAISES BAT TO 'CONVICTION BUY LIST' (SELL) - PRICE TARGET 5185 (3620) PENCE
----------
BERENBERG RAISES AB FOODS TO 'BUY' ('HOLD') - TARGET 2,760 (3,450) PENCE
----------
TRADERS: LIBERUM CUTS IAG TO 'HOLD' ('BUY')
----------
TRADERS: MACQUARIE RAISES BT GROUP TO 'NEUTRAL' (UNDERPERFORM)
----------
COMPANIES - FTSE 100
----------
Technology outsourcing company Capita said it has signed a five-year strategic partnership for customer management services with telecommunications company Tesco Mobile, which is part of supermarket Tesco. Under the terms of the partnership, Capita will enhance Tesco Mobile's customer service propositions using technology and service design methods. The deal is worth GBP140 million over the five-year term and is due to commence on August 1.
----------
Anglo-South African financial services group Old Mutual said trading has been broadly in line with its expectations in 2016 as it progresses its strategy to separate its operating units and warned the UK's decision to vote to leave the European Union could hit its underlying business. Old Mutual said gross sales in 2016 have been strong but it has continued to face a weak South African rand, volatility among other African currencies, and lower average equity markets. The FTSE 100-listed group said it expects its managed separation, which will split the company in four, to be materially complete by the end of 2018.
----------
Life insurer and investment manager Legal & General Group said it has appointed Whitehall veteran John Kingman as its new chairman. Kingman's appointment has been approved by UK financial industry regulators the Prudential Regulation Authority and Financial Conduct Authority, L&G said. He will take over from Rudy Markham, who has been interim chairman since John Stewart stepped down on June 1. Kingman is the former Second Permanent Secretary of HM Treasury and is the former chief executive of UK Financial Investments, the body managing the UK government's stakes in Royal Bank of Scotland Group and Lloyds Banking Group.
----------
Engineer Rolls-Royce Holdings confirmed its outlook for 2016 and said the UK's decision to leave the European Union will not have an impact on its day-to-day operations in the short term. The FTSE 100-listed engine maker confirmed its previous guidance that its performance in 2016 will be significantly weighted to the second half. The outlook for the second half, the group said, reflects an increase in large engine delivers, underlying growth in aftermarket revenue and expected benefits from ongoing restructuring programmes within the business.
----------
AstraZeneca said the European Commission has granted marketing authorisation for its Zavicefta antibiotic for patients with serious Gram-negative bacterial infections. The approval covers the treatment of adult patients suffering complicated intra-abdominal infections, complicated urinary tract infections and aerobic Gram-negative infections in adults with limited treatment options.
----------
COMPANIES - FTSE 250
----------
Ocado Group reported growth in profit in the first half of its financial year as sales grew on the back of a rise in active customer numbers and order volumes, although the average basket value declined in a deflationary food market. The online grocery retailer said its pretax profit in the 24 weeks ended May 15 grew to GBP8.5 million from GBP7.2 million in the same period the year before, as revenue rose to GBP584.2 million from GBP507.7 million.
----------
Housebuilder Redrow said pretax profit for its financial year will be above the top-end of analyst estimates, after it sold more houses at a higher average selling price, and said demand appears to be remaining strong following the Brexit vote. Redrow said its revenue for the year to the end of June was GBP1.38 billion, a 20% increase from the GBP1.15 billion posted a year earlier. Redrow noted that there was no impact on house sales or visitor levels in the run up to the UK referendum on EU membership, and said that whilst "it is too early to tell whether Brexit will have any effect on future sales, initial feedback is that sites remain busy, reservations continue to be taken and, indeed, we witnessed long queues and strong reservations at new sites launched last weekend".
----------
Lender Shawbrook Group said trading has been in line with its expectations in 2016 so far, but it will book an impairment charge due to irregularities uncovered in its Asset Finance unit. The bank said loan originations in the second quarter of 2016 were flat against the first quarter and were up 35% year-on-year, in line with its guidance. But it will book a GBP9.0 million impairment charge in the second quarter on the Asset Finance unit of its Business Finance arm, due to irregularities found in one office. Shawbrook also said it had accepted the resignation of Tom Wood as its chief financial officer. Dylan Minto, currently director of strategy, will step in as interim CFO.
----------
COMPANIES - INTERNATIONAL
----------
The EU is preparing to issue a fresh set of antitrust charges, possibly before August, against Google, a unit of Alphabet, over its dominance in advertising, according to reports citing people familiar with the matter. The European Commission reportedly has asked rival companies to permit disclosure to Google of confidential information they submitted to the EU that support allegations that Google abuses its dominance in advertising.
----------
Banco Santander said that it did not anticipate that recent events will have a material impact on Grupo Santander accounts in 2016, and maintained its guidance for all core financial targets for the group this year.
----------
Volkswagen's diesel emissions settlement with about 500,000 US owners and government regulators will cost the company more than USD15 billion, or USD5 billion more than was originally reported, according to media reports citing people familiar with the matter.
----------
Nestle said its board decided to appoint Ulf Mark Schneider as the new chief executive officer, starting on 1 January 2017. Schneider will join Nestlé on 1 September 2016 for an introductory period. Schneider, 50 years old and a German and US citizen, has been CEO of Fresenius Group since 2003.
----------
Pfizer announced that it will invest about USD350 million in the development of a state-of-the-art Global Biotechnology Center at a ground-breaking ceremony in the Hangzhou Economic Development Area or HEDA in China. Pfizer noted that the facility will be its third biotechnology center globally and the first in Asia.
----------
Total said that it has signed an agreement with Qatar Petroleum, granting the group a 30% interest in the concession covering the offshore Al-Shaheen oil field for a period of 25 years beginning July 14, 2017. The Al-Shaheen field produces 300 thousand barrels of oil per day. The concession will be operated by a new operating company held 70% by Qatar Petroleum and 30% by Total. Separately, AP Moller-Maersk said it was informed that Qatar Petroleum has selected another oil company as partner for the future development of the Al Shaheen field.
----------
Tuesday's Shareholder Meetings
Old Mutual
JKX Oil & Gas
Nostrum Oil & Gas
Petropavlovsk
Volvere
North River Resources
Faroe Petroleum
Fastjet
Universe Group
President Energy
Next Fifteen Communications Group
Crimson Tide
Eden Research
Ariana Resources
Secure Property Development & Investment
Anpario
CentralNic Group
Tandem Group
Xchanging
ServicePower Technologies
North Atlantic Smaller Companies IT
----------
By Tom Waite; [email protected]; @thomaslwaite
Copyright 2016 Alliance News Limited. All Rights Reserved.
Related Shares:
International AirlinesBritish American TobaccoBTAB Foods