27th Jun 2025 07:49
(Alliance News) - London stocks were called higher on Friday, following reports that the US and China have reached an understanding on trade issues, including expediting rare earth shipments to the US.
"The US and China have apparently reached a trade truce, the US administration said that 10 more deals could be imminent, and EU Commission President Ursula von der Leyen said she's ready to negotiate when the US is — in an effort to reach an agreement before the July deadline," commented Swissquote's Ipek Ozkardeskaya. "Meanwhile, US bank investors are cheering news of softer regulation on leverage rules this week, which could free up to USD6 trillion in additional balance sheet capacity...But overall, tariff uncertainties persist for key sectors like metals, autos, and technology.
"The direction and speed of US debt accumulation haven't improved — on the contrary, current developments suggest the Trump administration's planned spending cuts will be outweighed — and more — by benefits aimed at enriching already wealthy Americans.
"The geopolitical situation in the Middle East also remains tense, with Iran claiming that recent US bombing didn't significantly damage its nuclear facilities — a claim supported by European officials."
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: called up 8.9 points, 0.1%, at 8,744.50
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Hang Seng: down 0.2% at 24,268.29
Nikkei 225: up 1.3% at 40,088.14
S&P/ASX 200: down 0.4% at 8,514.20
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DJIA: closed up 404.41 points, 0.9%, at 43,386.84.
S&P 500: closed up 48.86 points, 0.8%, to 6,141.02
Nasdaq Composite: closed up 194.36 points, 1.0%, at 20,167.91.
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US 10-year Treasury yield: 4.25% (4.28%)
US 30-year Treasury yield: 4.80% (4.84%)
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EUR: higher at USD1.1702 (USD1.1698)
GBP: flat at USD1.3732 (USD1.3733)
USD: lower at JPY144.33 (JPY144.48)
GOLD: lower at USD3,292,29 per ounce (USD3,322.21)
OIL (Brent): lower at USD67.07 a barrel (USD67.83)
(changes since previous London equities close)
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ECONOMICS
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Friday's key economic events still to come:
10:00 BST eurozone consumer confidence
13:30 BST US personal consumption expenditures
14:15 BST US Federal Reserve Governor Lisa Cook speaks
15:00 BST US Michigan consumer sentiment index
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UK car and commercial vehicle production fell for the fifth consecutive month in May, down 33% to 49,810 units, according to the latest figures published Friday by the Society of Motor Manufacturers & Traders. Excluding 2020, when Covid lockdowns saw factories shuttered or running at greatly reduced capacity, it was the lowest performance for the month since 1949. In the year to date, the SMMT said that total output is down 13% on 2024, to 348,226, the lowest since 1953. The SMMT further said that car production declined by 32% in May, due primarily to ongoing model changeovers, restructuring and the impact of US tariffs, with 47,723 units produced. It added that shipments to the EU and US, the UK's two largest markets, fell by 23% and 55% respectively.
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People who currently receive the personal independence payment will continue to do so after the UK government made concessions to Labour rebels on controversial welfare reforms. A letter from Work & Pensions Secretary Liz Kendall to MPs said adjustments to universal credit would also see incomes protected. The announcement comes after crisis talks with backbenchers, with some 126 MPs within the party signing an amendment that would halt the legislation in its tracks. Prime Minister Keir Starmer's Universal Credit & Personal Independence Payment Bill has its second reading on Tuesday, the first opportunity for MPs to support or reject it.
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BROKER RATING CHANGES
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Berenberg raises ConvaTec price target to 335 (310) pence - 'buy'
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Oddo BHF raises Burberry price target to 920 pence - 'underperform'
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Deutsche Bank Research cuts Next 15 group price target to 473 (589) pence - 'buy'
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COMPANIES - FTSE 100
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Unilever is paying USD1.5 billion for its acquisition of Dr Squatch, a maker of male grooming products, the Financial Times reported on Friday. The London-based consumer products firm had announced the purchase from private equity investor Summit Partners on Monday but hadn't disclosed any financial terms. Citing "several people familiar with the details" for the amount paid by Unilever, the newspaper noted that Dr Squatch constituted another big bet on male grooming products after the company paid USD1 billion to buy Dollar Shave Club back in 2016, only to sell it again in 2023. Unilever on Monday said the acquisition of Dr Squatch "marks another step in expanding Unilever's portfolio towards premium and high growth spaces".
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Prudential confirmed that it completed a buyback programme on Thursday. The insurance and asset management firm has repurchased 83.2 million ordinary shares at an average price of 742.61 pence per ordinary share, for total consideration of approximately GBP617.7 million.
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Barratt Redrow announced the completion of a GBP50 million share buyback programme. It said it has repurchased 11.3 million shares. The company reiterated that the buyback is part of an ongoing programme which will return at least GBP100 million per year, and said it will release details of the next tranche in due course.
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OTHER COMPANIES
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AEW UK REIT reported a net asset value of 110.11 pence per share as of March 31, up 7.2% from 102.73p one year prior, in its annual results. The real estate investment trust's NAV total return for the year ended March 31 was positive 15.29%, against 4.98% the previous year. Its property performance had a total return of 14.8% in the financial year, easily outperforming its benchmark's return of 7.4%. Pretax profit, it said, more than doubled to GBP24.4 million from GBP9.1 million. EPRA earnings per share rose to 9.0p from 7.29p. Dividends for the year totalled 8.00p per share, unchanged on-year. AEW's property portfolio had a valuation of GBP204.6 million at the year end across 33 properties, down from GBP210.69 million across 36. "Against an unpredictable economic backdrop, fiscal and interest rate pressures, and destabilising geo-political events, the challenge is to present the company's excellent investment case, to continue to manage the portfolio for income and capital profits and to maintain a strong rating on the company's shares and liquidity in the secondary market," commented Chair Robin Archibald. "We are working with AEW to build on the excellent results for this financial year."
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By Emma Curzon, Alliance News reporter
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