5th Aug 2024 07:47
(Alliance News) - Stocks in London are expected to follow Asia lower on Monday, as investors digest Friday's nonfarm payroll data, as well as the developing situation in the Middle East.
"There are simply too many fires to extinguish, making a Monday recovery rally but a pipe dream—particularly with the resurgence of US recession fears and the looming specter of a hard landing chilling global investors to the bone," SPI Asset Management's Stephen Innes.
Equities in Asia struggled at the start of the week, with the Nikkei 225 in Tokyo surrendering its year-to-date advance.
Also hurting sentiment is the ongoing war in the Middle East.
A senior official said the US is ready for "every possibility" amid fears of war between Iran and Israel, while telling the Israelis it is "urgent" to reach a ceasefire deal in Gaza.
Following the Pentagon's announcement that it has beefed up the US military presence in the Middle East, White House Deputy National Security Adviser Jon Finer said "we are preparing for every possibility."
The news comes after Iran and its regional allies vowed retaliation for the killings of a Hamas leader in Tehran and a Hezbollah commander in Beirut, fueling fears of a broader Middle East conflict.
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 1.8% at 8,031.00
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Hang Seng: down 2.6% at 16,500.82
Nikkei 225: closed down 13% at 31,419.66
S&P/ASX 200: closed down 3.7% at 7,649.60
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DJIA: closed down 610.71 points, 1.5%, at 39,737.26
S&P 500: closed down 1.8% at 5,346.56
Nasdaq Composite: closed down 2.4% at 16,776.16
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EUR: down at USD1.0906 (USD1.0919)
GBP: down at USD1.2719 (USD1.2803)
USD: down at JPY142.14 (JPY146.53)
Gold: up at USD2,426.70 per ounce (USD2,425.65)
(Brent): down at USD75.92 a barrel (USD76.88)
(changes since previous London equities close)
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ECONOMICS
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Monday's key economic events still to come:
10:00 CEST eurozone composite PMI
11:00 CEST eurozone PPI
09:50 CEST France composite PMI
09:55 CEST Germany composite PMI
11:00 CEST Germany new car registrations
09:45 CEST Italy composite PMI
09:00 CEST Spain industrial production
09:15 CEST Spain composite PMI
09:00 BST UK new car sales
09:30 BST UK composite PMI
09:45 EDT US composite PMI
10:00 EDT US ISM services PMI
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Downing Street is expected to hold a Cobra emergency response meeting on Monday after "thugs" tried to storm hotels housing asylum seekers on the sixth day of escalating disorder in parts of the UK. Prime Minister Keir Starmer vowed rioters would "regret" engaging in "far-right thuggery" and promised those involved in unrest would "face the full force of the law" as he addressed the nation on Sunday. Monday's meeting is due to involve relevant ministers and police representatives who will discuss the response in the coming days to ensure there is no repeat of the violent scenes. The Home Office announced on Sunday that mosques would be offered greater protection under a new "rapid response process" designed to quickly tackle the threat of further attacks on places of worship.
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Ministers are expected to pitch Britain as a "stable place to do business" as they court global investors at a UK-based summit two weeks ahead of the autumn budget. Starmer will host up to 300 industry leaders at the event on October 14, which Chancellor Rachel Reeves and Business Secretary Jonathan Reynolds will also attend. The International Investment Summit is seen by the government as a milestone in its central mission to boost economic growth. Labour promised during the general election campaign to hold such an event within 100 days if it came to power. Investors will hear from the prime minister, Reeves and Reynolds that the UK is "open for business", the Department for Business & Trade said.
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BROKER RATING CHANGES
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Barclays cuts Severn Trent to 'equal weight' (over weight) - price target 2,500 (3,320) pence
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Barclays cuts United Utilities to 'underweight' (equal weight) - price target 975 (1,315) pence
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Citigroup cuts Lloyds to 'neutral' (buy) - price target 60 (68) pence
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COMPANIES - FTSE 250
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Clarkson reported that in the first half of 2024 revenue fell 3.4% to GBP310.1 million from GBP321.1 million a year earlier. Pretax profit fell to GBP50.1 million from GBP52.2 million. Clarkson upped its interim dividend to 32p from 30p. Looking ahead, Clarkson said its expectations for the year unchanged with continued confidence in the outlook. Chief Executive Andi Case said: "The profile and further development of the forward order book, level of new business being transacted and pipeline for the second half, means that we have confidence that we will be second half weighted and deliver full year results in line with the board's expectations."
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Senior reported that revenue in the first half of 2024 rose to GBP501.4 million from GBP482.3 million a year earlier. Pretax profit fell to GBP13.2 million from GBP13.5 million. Senior upped its dividend per share by 25% to 0.75p from 0.60p. Looking ahead, Senior left its full-year outlook unchanged with good growth anticipated for the full-year. "For the full-year we still expect to maintain good performance in Flexonics with H1 slightly higher than H2 due to a return to more typical levels of land vehicle demand," said CEO David Squires. "The group's diversified position across key civil and defence aircraft platforms, strong order intake and increasing aircraft build rates are expected to drive good growth in Aerospace for the full-year. Higher volumes, operational efficiency benefits and improved pricing are expected to result in H2 performance being higher than H1."
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OTHER COMPANIES
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UK Oil & Gas said it has raised GBP1.0 million through a placing of shares priced at 0.05 pence each. The issue price represents a discount of 37% to the closing price of 0.08p on Friday. In addition to the placing, the company is planning a retail offer. UK Oil said the proceeds will be directly employed to further specific activities required to materially advance the company's hydrogen storage projects. Specifically, it will permit the company to initiate essential new studies. CEO Stephen Sanderson commented: "The funding, together with the support from leading UK energy and hydrogen-space infrastructure players, RWE, Sumitomo and SGN, means we can now materially advance our nationally significant projects towards the goal of a competitive Revenue Support application. It will also greatly help us to secure at least one major strategic partner as a joint venture participant and to enhance our lobbying efforts with our new Labour government, who to date seem motivated and committed to making hydrogen and its storage a fundamental part of Britain's renewable superpower ambition."
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Guild Exports said it has signed a letter of intent with DCB Sports, under which DCB will buy 100% of the assets of Guild Esports. DCB Sports is a California-based investment management company specialising in emerging sports teams and novel leagues. "Should the transaction complete, DCB Sports will assume and run the Guild brand, backstop future working capital requirements for the private business, provide ongoing capital sufficient to allow it to operate on a stable financial platform and further develop its existing partnerships with studios and creatives both domestically and abroad," it explained. Guild added that there is no guarantee that the transaction will complete, and it remains in discussions with other parties. CEO Jasmine Skee said: "The board is looking to secure the long-term future of Guild Esports, both the PLC and the iconic Guild brand. Our deal with DCB Sports is an important step in that direction, as DCB Sports will allow Guild's management to deliver on its strategic aims of building a world-class gaming-led media brand."
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By Sophie Rose, Alliance News senior reporter
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