26th Jun 2025 07:51
(Alliance News) - Stocks were called in the red ahead of US data and comments from Bank of England Governor Andrew Bailey, while US President Trump claims that progress is being made to end conflicts in the Middle East.
Despite the possibility of geopolitical tensions de-escalating, "the supply-demand dynamics continue to favour softer oil prices", Swissquote's Ipek Ozkardeskaya said. "Global demand prospects are weakening due to trade uncertainties, while supply is ample thanks to faster production restoration from OPEC+...So, if Middle East tensions are truly done and dusted, oil is more likely than not to fall back toward, or even below, the USD60pb level.
"That's good news for the Federal Reserve's [Fed] inflation battle — but unfortunately, it's not the only risk factor. The real threat to US inflation now is tariffs, and there's been little progress on that front.
"Fed Chair Powell keeps insisting the US doesn't need to rush into rate cuts until there's more clarity on trade policy. But no one listens — even less so now, as there's growing concern that Trump could prematurely appoint the next Fed Chair to sideline Powell, who has resisted rate cuts. A new Trump-approved Chair would likely be more willing to cut rates, pleasing Trump, who insists the U.S has no inflation problem. Technically, that's true — for now. But it could, and that's the problem."
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 8.7 points, 0.1%, at 8,710.05
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Hang Seng: down 0.8% at 24,279.32
Nikkei 225: up 1.6% at 39,555.27
S&P/ASX 200: down 0.1% at 8,550.80
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DJIA: closed down 106.59 points, 0.3%, at 42,982.43
S&P 500: closed down 0.02 points at 6,092.16
Nasdaq Composite: closed up 0.3% at 19,973.55
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US 10-year Treasury yield: 4.27% (4.32%)
US 30-year Treasury yield: 4.81% (4.86%)
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EUR: higher at USD1.1677 (USD1.1626)
GBP: higher at USD1.3704 (USD1.3622)
USD: lower at JPY144.67 (JPY145.60)
GOLD: higher at USD3,332.05 per ounce (USD3,323.77)
OIL (Brent): lower at USD67.90 a barrel (USD68.18)
(changes since previous London equities close)
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ECONOMICS
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Thursday's key economic events still to come:
China National People's Congress Standing Committee
09:00 CEST eurozone ECB general council meeting
08:00 CEST Germany consumer confidence
09:30 BST UK Bank of England Deputy Governor Sarah Breeden speaks
12:00 BST UK Bank of England Governor Andrew Bailey speaks
14:00 BST UK Bank of England Director Lee Foulger speaks
UK CCBS Conference: Transforming monetary policy
13:30 BST US GDP
13:30 BST US quarterly personal consumption expenditures
13:30 BST US initial jobless claims
13:30 BST US wholesale inventories
13:30 BST US durable goods orders
13:30 BST US Chicago Fed national activity index
15:30 BST US EIA natural gas stocks
16:00 BST US Kansas City Fed manufacturing activity
15:00 BST US pending home sales
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The UK's steel and energy sectors could be classed as "nationally important" to security under new procurement rules aimed at giving homegrown industry an edge over foreign firms. Public sector buyers would be able to avoid normal requirements to consider overseas bidders and instead give priority to domestic firms under the plans set out in a consultation that launched on Wednesday. Ministers would be allowed to designate sectors including steel, energy and cyber as nationally important in order to help grant them more of the GBP400 billion spent on procurement each year, the government said.
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A trade plan unveiled by the UK government aims to boost exports and protect domestic firms. The Department for Business & Trade said it was the UK's first trade strategy to be published since Brexit. As part of the plan, the DBT pledged to introduce new tools and safeguards to help protect UK firms against the threat of a shifting global trade environment. It is also expanding the capacity of UK Export Finance – the country's export credit agency – by GBP20 billion to a total of GBP80 billion. The body provides government-backed loans, guarantees and insurance to help companies trade overseas.
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Europe's start-up sector fears that the EU might weaken key digital legislation in exchange for concessions from the US in its ongoing tariff dispute with the EU. In a letter to the European Commission, seen by dpa on Thursday, digital associations warned against potential compromises on the Digital Markets Act, DMA, which Brussels uses to regulate big US tech firms and which was the basis for recently imposed heavy fines on Apple and Meta. The letter expressed significant concern over reports that the US trade representative had proposed temporarily suspending DMA enforcement of US tech companies as part of a bilateral dialogue with the EU. "The DMA is not a geopolitical manoeuvre and must not be allowed to become one," the signatories, including the European Start-up Network, the German Start-up Association & France Digitale, wrote. "We therefore urge you: Do not allow the enforcement of the DMA to be weakened or delayed," they warned.
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EU leaders are to meet on Thursday in Brussels to discuss the bloc's most pressing issues including Russia's war against Ukraine, Europe's defence and the economy. "Ukraine has been steadfast in its efforts to enable a real peace process. And the EU will remain equally steadfast in its support to Ukraine," said European Council President Antonio Costa ahead of the two-day meeting. Leaders are expected to discuss prolonging existing EU sanctions on Russia as well as adopting additional restrictive measures. The European Commission has proposed an 18th package of sanctions earlier this month with additional measures against Russia's ENERGY and banking sector. While most EU countries are stern supporters of Kyiv, Hungarian Prime Minister Viktor Orban has repeatedly opposed military support for Ukraine and Kyiv's path to EU membership. Ukrainian President Volodymyr Zelensky is expected to join EU leaders by video-link.
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US President Donald Trump said Wednesday that progress was being made to end the Israel-Hamas war in Gaza, as a new ceasefire push began more than 20 months since the start of the conflict. "I think great progress is being made on Gaza," Trump told reporters, adding that his special envoy Steve Witkoff had told him: "Gaza is very close." He linked his optimism about imminent "very good news" to a ceasefire agreed on Tuesday between Israel and Hamas's backer Iran to end their 12-day war. Israeli Prime Minister Benjamin Netanyahu faces growing calls from opposition politicians, relatives of hostages being held in Gaza and even members of his ruling coalition to bring an end to the conflict. The Israeli government declined to comment on any new ceasefire talks beyond saying that efforts to return Israeli hostages in Gaza were ongoing "on the battlefield and via negotiations".
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BROKER RATING CHANGES
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Kepler Cheuvreux cuts Melrose Industries to 'hold'
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UBS cuts British Land to 'neutral' (buy) - price target 410 (465) pence
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Berenberg starts Zegona with 'buy' - price target 1,000 pence
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COMPANIES - FTSE 100
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Shell has denied it is in talks to acquire rival BP after reports about a deal that would combine the UK's two biggest oil companies, both based in London. "Shell wishes to clarify that it has not been actively considering making an offer for BP and confirms it has not made an approach to, and no talks have taken place with, BP with regards to a possible offer," Shell said, adding that the firm was focused on adding value by improving its performance. BP declined to comment. The Wall Street Journal on Wednesday said its sources indicated that the two firms had held "early talks" about merging their operations. WSJ sources said talks between company representatives are active and BP is considering the approach carefully. Potential terms of any deal couldn't be learned, and a tie-up is far from certain, the WSJ said, adding discussions are moving slowly.
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Pershing Square Holdings announced an additional share buyback programme worth USD200.0 million, which it expects to be accretive to net asset value per share and will reduce PSH's capital. It intends to repurchase up to 10.0 million shares.
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Associated British Foods released a trading update lamenting UK-US trade deal, saying that the US can export their ethanol tariff-free into the UK. This makes the climate "significantly worse" for ABF's bioethanol business Vivergo. "ABF has engaged in extensive discussions with the government to find a financial and regulatory solution that would enable Vivergo to operate on a profitable and sustainable basis," ABF said. It said the government has now committed to formal negotiations to reach a sustainable solution, recognising the strategic importance of a domestic ethanol supply. However, Vivergo is nonetheless beginning consultation with employees to effect an orderly wind-down. Regarding its sugar business, ABF said high rainfall has caused a slow start to its processing season in Africa, but that guidance remains unchanged as production is running at elevated levels to recover some of the initial shortfall.
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COMPANIES - FTSE 250
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Moonpig for the year ended April 30 reported pretax profit of GBP3.0 million, down 94% from GBP46.4 million the year before. Revenue however rose 2.6% to GBP350.1 million from GBP341.1 million. Adjusted pretax profit was GBP67.5 million, up 16% from GBP58.2 million. The proposed full-year dividend is 3.0 pence per share, with the board recommending a final dividend of 2.0p. Moonpig said it expects to make GBP60.0 million in share buybacks during financial 2026. It also expects mid-single-digit growth in adjusted Ebitda, and 8% to 12% growth in adjusted earnings per share. Moonpig also announced that CEO Nickyl Raithatha is to step down after seven years in the post. His notice period has a duration of 12 months, and Moonpig has started the search for his successor.
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Serco for its first half year reported revenue of around GBP2.4 billion, up 2% on-year. Underlying operating profit totals at least GBP140 million, with a continued strong margin of around 5.9%. Serco also said its order intake is very strong with around GBP3 billion of contract awards, with orders highly weighted towards the defence sector. Looking ahead, Serco expects full-year organic revenue growth to improve to around 1% due to higher than anticipated activity levels in the immigration sector, with revenue totalling around GBP4.8 billion to GBP4.9 billion. Underlying operating profit guidance of around GBP260 million is unchanged. Also, Serco announced the appointment of Keith Williams as chair designate, succeeding current Chair John Rishton. Williams, who was previously chair of International Distribution Services, will join the board on August 1 and become chair from January 1.
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OTHER COMPANIES
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Inspired has accepted a GBP183.6 million takeover offer, and withdrawn its final dividend. Inspired shareholders will, under the terms of the offer from funds managed or advised by HGGC LLC and affiliates, be entitled to receive 81 pence in cash per share, which is 6.0% higher than the share price close of 76.40p on Wednesday. This values the entire issued and to be issued share capital of Inspired at approximately GBP183.6 million on a fully diluted basis. "While Inspired has made progress to date, HGGC believes that further strategic focus and investment will be needed to fully unlock its potential," Inspired said. "HGGC believes that a majority-control ownership structure offers the most effective platform for this transformation given the ability to focus on long-term strategic goals...For example, Inspired could make targeted investments and pursue mergers and acquisitions to better position itself to capture its growth opportunity."
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By Emma Curzon, Alliance News reporter
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