20th Dec 2024 07:52
(Alliance News) - Stocks were called lower on Friday ahead of the US Fed's preferred inflation gauge, the personal consumption expenditures reading, this afternoon.
China's central bank kept interest rates unchanged, while in Japan consumer price inflation accelerated on rising energy and rice prices.
Meanwhile in the UK, retail sales rose on-month in November for the first time since August, numbers on Friday showed, but still fell short of expectations.
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 4.3 points, 0.1% at 8,101.02
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Hang Seng: flat at 19,753.37
Nikkei 225: down 0.3% at 38,701.90
S&P/ASX 200: down 1.3% at 8,064.80
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DJIA: closed up marginally at 42,342.24
S&P 500: closed down 0.1% at 5,867.08
Nasdaq Composite: closed down 0.1% at 19,372.77
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EUR: higher at USD1.0377 (USD1.0364)
GBP: flat at USD1.2497 (USD1.2500)
USD: lower at JPY156.92 (JPY157.39)
Gold: higher at USD2,603.49 per ounce (USD2,596.22)
(Brent): higher at USD72.51 a barrel (USD72.18)
(changes since previous London equities close)
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ECONOMICS
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Friday's key economic events still to come:
11:00 GMT Italy PPI
13:30 GMT US personal consumption expenditures
13:30 GMT Canada retail sales
15:00 GMT eurozone consumer confidence
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According to the Office for National Statistics, UK retail sales volumes rose by 0.2% month-on-month in November, improving from a 0.7% fall in October but falling short of the FXStreet cited consensus of 0.5%. Retail sales also grew 0.5% in the year to November. This missed the FXStreet consensus of 0.8%, and declined from the 2.4% increase in the year to October. "Growth in supermarkets and other non-food stores was partly offset by a fall in clothing retailers," the ONS said. When compared to their pre-coronavirus pandemic level in February 2020, volumes were down by 1.6%. Food stores sales volumes increased for the first time in three months, rising by 0.5%, particularly in supermarkets. Clothing stores sales volumes fell by 2.6%, following a 3.5% fall in October. The ONS noted that Black Friday fell outside of the reporting period.
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China's central bank left its benchmark interest rates unchanged as expected at the monthly fixing on Friday. The National Interbank Funding Centre kept the one-year loan prime rate at 3.10%, while the five-year LPR was unchanged at 3.60%. The People's Bank of China also said it conducted around USD13.92 billion reverse repo operations "in order to keep liquidity adequate at a reasonable level in the banking system". Reuters said that in its poll of market participants, all respondents expected both rates to stay unchanged. "The monetary policy stance will shift to being moderately loose, marking a significant departure from the prudent monetary policy regime in place since 2011," OCBC Bank's Tommy Xie told Reuters. "We anticipate the [People's Bank of China] will lower the one-year LPR by 40 basis points in 2025 and reduce the [required rate of return] by an additional 100 basis points, providing substantial liquidity support to the economy."
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Japanese inflation accelerated in November, with prices rising 2.7% on-year partly because of higher energy costs, government data showed Friday. The core consumer price index, which excludes volatile fresh food prices, topped market expectations and was up from 2.3% in October. The reading remained above the Bank of Japan's 2% inflation target, set more than a decade ago as part of efforts to boost the stagnant economy. The 2% target has been surpassed every month since April 2022, although central bank policymakers have sometimes questioned the role of temporary factors such as the war in Ukraine, AFP said. Analysts had forecast a core CPI reading of 2.6% for November. "Core core CPI", which excludes both fresh food and energy prices, stood at 2.4%. Rice prices continued to soar, with the data showing an on-year increase of around 64% after this year's harvests were hit by hot weather and water shortages. The data adds further evidence of sticky pricing pressures in Japan, the Financial Times said, especially as the weakening yen is likely to push up the cost of imports, which could encourage the Bank of Japan to lift rates early next year.
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Republicans in the US Congress agreed on a new funding package Thursday aimed at averting a holiday-season government shutdown, after an earlier cross-party deal was derailed by President-elect Donald Trump and Elon Musk. Trump threw his weight behind the latest proposal, which addresses objections to the mammoth package that prompted him and Musk, his incoming "efficiency czar," to trash the previous version. Democrats immediately dismissed the proposal, however, dashing hopes that they would give Republicans the votes they need in the House of Representatives to get the bill approved before departments begin winding up their operations on Saturday. "The... proposal is not serious, it's laughable. Extreme MAGA Republicans are driving us to a government shutdown," Democratic Minority Leader Hakeem Jeffries said.
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Canada's embattled Prime Minister Justin Trudeau will announce a major cabinet shuffle on Friday, government sources told AFP, days after the surprise resignation of his longtime number two shocked the nation. It will be a "significant shakeup," one source said. Chrystia Freeland, after nearly a decade at Trudeau's side, announced on Monday she was quitting her dual roles as deputy prime minister and finance minister. Now, as many as a dozen new ministers could be appointed to replace those in the current 35-member cabinet who have signalled they will not seek re-election in 2025, and to relieve others of their double or triple duties in government. Freeland said she herself would seek re-election next year. Dominic LeBlanc, the public safety minister, has already been sworn in as the new finance minister. He is expected to give up the public safety portfolio in Friday's shuffle.
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BROKER RATING CHANGES
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Citigroup reinitiates Segro with 'buy' - price target 1,102 pence
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RBC raises IG Group price target to 1,150 (1,100) pence - 'outperform'
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JPMorgan cuts Just Eat Takeaway price target to 21.00 (22.08) EUR - 'overweight'
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COMPANIES - FTSE 100
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Schroders announced that on Thursday it completed the share buyback originally announced on November 13. It said that over the course of the repurchase, 6.4 million ordinary shares of 20 pence each were repurchased for a total consideration of just under GBP20.0 million.
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GSK announced headline results from the First-Engot-OV44 phase 3 trial evaluating Zejula (niraparib) and Jemperli (dostarlimab) in first-line advanced ovarian cancer. It said the trial met its primary endpoint of progression-free survival, demonstrating a statistically significant difference with the addition of dostarlimab to both standard-of-care carboplatin-paclitaxel chemotherapy and niraparib maintenance, with or without bevacizumab. However, the key secondary endpoint of overall survival did not meet statistical significance.
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COMPANIES - FTSE 250
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IP Group noted that two quoted companies in its life sciences portfolio have received cash acquisition offers. Intelligent Ultrasound, in which IP Group has a 20.8% stake, received a cash offer from Surgical Science Sweden which values the business at approximately GBP45.2 million. As a result, IP Group said it expects to receive GBP8.8 million of cash for its holding, which would represent an uplift of GBP4.4m (100%) from the last-reported net asset value at June 30. Secondly, Abliva - in which IP Group has a 9.5% stake - received a cash offer from Pharming Technologies which values that business at approximately SEK725.3 million (GBP52.4 million). IP Group expects to receive GBP5 million total cash for its holding, which would represent a multiple of 1.5 times cost and an uplift in carrying value of GBP3.7 million (284%) since the NAV at June 30.
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OTHER COMPANIES
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Judges Scientific announced that Chair Alexander Hambro has decided to retire at the end of 2024. He will remain as a non-executive director until he steps down from the board at the conclusion of the group's next annual general meeting, which Judges Scientific said will take place in May 2025. Current Non-Executive Director Ralph Elman will succeed Hambro with effect from January 1.
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By Emma Curzon, Alliance News reporter
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