17th Apr 2025 07:45
(Alliance News) - The FTSE 100 was called lower on Thursday ahead of the long Easter weekend, and as the European Central Bank looks likely to cut interest rates in the afternoon.
Swissquote's Ipek Ozkardeskaya noted that in European markets, "sentiment remains fragile, and any positive momentum could be hard to defend".
"Note, however, that the European defence names lead the rebound in European equities as the geopolitical tensions with the US don't give signs of abating," she continued. "As such, the euro and the European assets will likely continue to outperform their US peers. Today, the European Central Bank (ECB) is expected to announce a 25bp rate cut to provide relief to the European economies in the middle of a global turmoil. President Lagarde will probably refrain from making commitments to future rate cuts...The fact that the euro unexpectedly shined in the first quarter, and the significant decline in ENERGY prices are supportive of growth, and there is a chance that the EU and the US reach a trade deal in the coming weeks.
"That would be the best of both worlds. The EU would still spend big to strengthen military and infrastructure while not taking a hit on the trade front."
In corporate news, J Sainsbury reported increased profit and revenue and forecast market-beating grocery volume growth.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: down 30.2 points, 0.4% at 8,245.4
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Hang Seng: up 1.3% at 21,337.88
Nikkei 225: up 1.3% at 34,348.10
S&P/ASX 200: up 0.7% at 7,810.50
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DJIA: closed down 699.57 points, 1.7%, at 39,669.39
S&P 500: closed down 2.2% at 5,275.70
Nasdaq Composite: closed down 3.1% at 16,307.16
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EUR: lower at USD1.1348 (USD1.1363)
GBP: lower at USD1.3205 (USD1.3228)
USD: higher at JPY142.81 (JPY142.75)
GOLD: higher at USD3,329.49 per ounce (USD3,324.19)
OIL (Brent): higher at USD66.44 a barrel (USD65.73)
(changes since previous London equities close)
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ECONOMICS
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Thursday's key economic events still to come:
14:15 CEST eurozone interest rate decision
14:45 CEST eurozone ECB press conference
08:00 CEST Germany PPI
08:30 EDT US building permits
08:30 EDT US initial jobless claims
08:30 EDT US Philadelphia Fed manufacturing index
10:30 EDT US EIA natural gas stocks
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European Central Bank policymakers look increasingly likely to cut interest rates again on Thursday, with US President Donald Trump's stop-start tariff announcements sowing concern in the eurozone. The uncertainty around Trump's next move and the negative impact it could have on growth within the single currency bloc has intensified calls for the ECB to ease borrowing costs further. Worries over rising prices have faded into the background, as once sky-high inflation rates have drifted back down towards the ECB's 2% target. The central bank has made six quarter-point cuts since June last year as inflation has fallen, bringing its benchmark deposit rate down to 2.5% from 4%. Observers will listen carefully to ECB president Christine Lagarde's remarks after the rates announcement to get a hint of how the ECB may respond going forward. Lagarde last week signalled policymakers' willingness to support the eurozone in a more critical scenario, where Trump's tariff blitz caused a threat to financial stability.
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Tariffs are likely to push up prices and could put the US Federal Reserve in the unenviable position of having to choose between tackling inflation and unemployment, the bank's chair said. "Tariffs are highly likely to generate at least a temporary rise in inflation," Fed Chair Jerome Powell told the Economic Club of Chicago, according to prepared remarks, warning that the inflationary effects "could also be more persistent." "Avoiding that outcome will depend on the size of the effects, on how long it takes for them to pass through fully to prices, and, ultimately, on keeping longer-term inflation expectations well anchored," he added, echoing similar remarks earlier this month. Powell said that the Fed could find itself in the "challenging scenario in which our dual-mandate goals are in tension," noting that price stability is a necessary precondition for "strong labour market conditions."
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Japan's exports rose at a slower pace than expected in March, numbers from the Ministry of Finance showed Thursday. Japan's trade balance increased 56% to a surplus of JPY544.05 billion, approximately USD3.82 billion, in March from a JPY349.86 billion surplus during the same month a year earlier. The reading surpassed the FXStreet-cited consensus forecast of a JPY485.3 billion surplus. Exports grew 3.9% to JPY9.848 trillion from JPY9.475 trillion but missed expectations for a 4.5% increase. Imports rose 2.0% to JPY9.304 trillion from JPY9.125 trillion, below the anticipated 3.1% rise. The trade surplus in March was 7.9% lower than JPY590.53 billion in February.
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Australia's unemployment rate edged up in March, data showed Thursday. The Australian Bureau of Statistics reported that the seasonally adjusted unemployment rate increased to 4.1% in March from 4.0% in February, falling short of the anticipated rate of 4.2%, as cited by FXStreet. The number of employed people increased by 0.2% to 14.54 million from 14.51 million, and unemployed people rose 0.5% to 613,900 from 610,900. Meanwhile, the underemployment rate was stable at 5.9%, and the monthly hours worked fell 0.3% to 1.965 billion from 1.970 billion.
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BROKER RATING CHANGES
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HSBC cuts Rightmove to 'hold' - price target 775 pence
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Peel Hunt raises Hollywood Bowl to 'buy' (add) - price target 340p
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JPMorgan starts Jet2 with 'overweight' - price target 1,900 pence
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COMPANIES - FTSE 100
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J Sainsbury released its results for the year ended March 1. Post-tax profit surged 77% to GBP242 million from GBP137 million, the grocery retailer said. Pretax profit from continuing operations rose to GBP621 million from GBP489 million. Basic earnings per share rose to 10.4 pence from 5.9p. Revenue increased to GBP32.81 billion from GBP32.24 billion, with retail sales excluding fuel rising 4.2% to GBP26.6 billion. The full-year dividend is up 4% on-year at 13.6p. Sainsbury said it expects to return bank disposal proceeds of GBP250 million via a special dividend in the second half of the year and intends to buy back shares worth at least GBP200 million. Also, for the current financial year, Sainsbury expects to deliver Retail underlying operating profit of around GBP1 billion and Retail free cash flow of more than GBP500 million. "We expect to continue to grow grocery volumes ahead of the market and we have started the year with good trading momentum across all our brands," it added.
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Rentokil Initial, in its first-quarter trading update, said that total revenue grew 1.5% to USD1.64 billion from USD1.61 billion the year before, with 0.5% growth in North America to USD951 million from USD946 million. International revenue increased 2.9% to USD680 million from USD661 million. UK & Sub Saharan Africa revenue increased 6.4% to USD138 million from USD129 million. Pest Control revenue rose 1.1% to USD1.28 billion from USD1.26 billion. "Our International Pest Control business performed well," commented CEO Andy Ransom. "As already stated, North America had a slow first quarter with continued subdued lead flow. Our focus remains on building growth momentum and positioning the business to deliver on our strategic ambitions. Despite increased macro-economic uncertainties, we remain confident about the longer-term based on the resilience of our markets, our global reach, our diverse customer base and our recurring revenues."
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COMPANIES - FTSE 250
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Deliveroo released a first-quarter trading update. Gross transaction value rose 8% or 9% at constant currency to GBP1.87 billion from GBP1.73 billion, while revenue rose 7% to GBP518 million. UK & Ireland revenue rose 7% to GBP327 million, and International revenue rose 7% to GBP192 million. Deliveroo reiterated its full-year guidance, expecting GTV growth to be a high single-digits percentage at constant currency and adjusted earnings before interest, tax, depreciation and amortisation between GBP170 million and GBP190 million "as we make targeted investments to capture future growth opportunities". "We continue to have confidence in delivering our guidance for 2025 whilst, like many others, remaining mindful of the uncertain macroeconomic environment," Chief Executive Officer Will Shu added.
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OTHER COMPANIES
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Alphawave IP released final results for 2024, showing a narrowed pretax loss of USD32.9 million against 2023's USD39.5 million. Revenue, however, decreased 4% to USD307.6 million from USD321.7 million and adjusted Ebitda fell 18% to USD51.1 million, although the high-speed connectivity solutions firm noted that both were "in line with guidance". New bookings increased 34% to a "record" USD515.5 million. "Throughout the year, we strengthened key partnerships, expanded our global reach, and continued to lead in next-generation connectivity and chiplet innovation," commented Alphawave Semi CEO Tony Pialis. "Our position at the forefront of the industry, working alongside some of the world's most respected data centre and AI partners, underscores both our leadership and growing influence. With a leading connectivity portfolio, a talented team, and a significant market opportunity ahead, we are confident in the long-term potential of our business."
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By Emma Curzon, Alliance News reporter
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