7th Nov 2024 07:55
(Alliance News) - The FTSE 100 was called higher on Thursday morning following Donald Trump's election victory, although the impact of his policies (if enacted) on global economies remains to be seen.
"In this new context...the Bank of England has the hard task to deliver its first policy decision post-Trump," commented Swissquote's Ipek Ozkardeskaya. "The BoE is expected to cut rates by 25bp today. The markets price in two more rate cuts by the end of next year and gives a 35% chance for a third one.
"Of course, the BoE must also deal with the higher government spending that Rachel Reeves promised a few days ago – that alerted the BoE hawks that the easing must be carefully measured to counter the fiscal expansion, as well...And now, the bank analysts are lowering their post-Trump growth expectations for the UK – which is, in return, doveish for the BoE bets."
Meanwhile in the UK, the Bank of England looks poised to cut rates for the second time this year, and data published by Halifax showed house prices edged up to a record high last month.
In corporate news, BT has lowered full-year revenue guidance, but increased its dividend.
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 40.2 points, 0.5% at 8,206.88
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Hang Seng: up 1.9% at 20,933.91
Nikkei 225: closed down 0.3% at 39,381.41
S&P/ASX 200: closed up 0.3% at 8,226.30
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DJIA: closed up 1,508.05 points, 3.6%, at 43,729.93
S&P 500: closed up 2.5% at 5,929.04
Nasdaq Composite: closed up 3.0% at 18,983.47
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EUR: up at USD1.0757 (USD1.0728)
GBP: up at USD1.2934 (USD1.2877)
USD: down at JPY153.87 (JPY154.48)
Gold: down at USD2,664.66 per ounce (USD2,665.82)
(Brent): down at USD74.88 a barrel (USD75.18)
(changes since previous London equities close)
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ECONOMICS
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Thursday's key economic events still to come:
09:30 CET eurozone construction PMI
11:00 CET eurozone retail sales
09:30 CET France construction PMI
09:30 CET Germany construction PMI
11:00 GMT Ireland CPI
12:00 GMT UK interest rate decision
08:30 EST US initial jobless claims
10:00 EST US wholesale inventories
10:30 EST US EIA natural gas stocks
14:00 EST US interest rate decision
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UK house prices edged up to a record high in October, data published by Halifax showed Thursday. The average house price rose by 0.2% monthly to GBP293,999 in October. It was up 3.9% from a year ago when it stood at GBP283,053, however the growth was slowed from 4.6% in September. "Despite the affordability challenge, market activity has been improving. The number of new mortgages agreed recently reached its highest level in two years," said Amanda Bryden, head of Mortgages at Halifax. She added: "Looking ahead, borrowing constraints remain a challenge for many buyers. Following the budget, markets expect the Bank of England to cut rates more slowly than previously anticipated, which could keep mortgage costs higher for longer."
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Donald Trump's crushing presidential victory heralded a new era of upheaval for the US and the world, as defeated Democrat Kamala Harris gave a defiant concession speech, while promising to help his transition. An emotional Vice President Harris told cheering supporters in Washington "do not despair" and she urged them to "keep fighting." But her pledge to ensure a peaceful handover of power stood in stark contrast with Trump's unprecedented refusal four years ago to concede defeat to Joe Biden, culminating with the violent attack by his supporters on the US Capitol. "While I concede this election, I do not concede the fight that fueled this campaign," Harris said in her short, powerful speech at Howard University, her former college. "I know many people feel like we are entering a dark time," she said, her voice hoarse as she made her first public remarks since Trump's surprisingly heavy victory. "But for the benefit of us all, I hope that's not the case."
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Chinese exports rose 12.7% in October over last year - more the double the 5% increase analysts had predicted - figures published on Thursday by the Chinese customs authority showed. Imports were weaker than expected down by 2.3%. Meanwhile, President Xi Jinping said Beijing and Washington must find a way to "get along" in a message to Trump, state media reported. Trump's presidential victory ushers in a new era of uncertainty in the US and the world, and heralds a possible shift in US-China relations, frayed in recent years by tensions over everything from trade to the status of self-ruled Taiwan.
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Australia's trade balance decreased to AUD4.609 billion in September, down from AUD5.284 billion in August. The reading came in below FXStreet-cited consensus of AUD5.30 billion. Exports of goods were at AUD40.827 billion compared with 42.645 billion the prior month. Imports of goods were AUD36.219 billion compared with AUD37.361 billion previously.
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Germany enters a period of political uncertainty after its fragile three-party ruling coalition between Chancellor Olaf Scholz's Social Democrats, the Greens and the Free Democrats finally broke apart on Wednesday night. Scholz announced a January confidence vote, likely followed by snap elections in March. Scholz said late Wednesday he would reach out to conservative opposition leader Friedrich Merz, who is leading in opinion polls, for support in passing crucial bills on the economy and defence.
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BROKER RATING CHANGES
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Deutsche Bank research raises Marks & Spencer price target to 450 (430) pence - 'buy'
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Berenberg starts Bloomsbury Publishing with 'buy' - price target 825 pence
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UBS raises Kingspan group to 'buy' (neutral) - price target 90 EUR
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COMPANIES - FTSE 100
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BT reported a pretax profit of GBP967 million for its first half year, down 10% from GBP1.08 billion last year. Revenue decreased 3% to GBP10.12 billion from GBP10.41 billion. However, BT lifted its interim dividend by 4% to 2.40 pence per share from 2.31p. The company meanwhile lowered its full-year revenue guidance, now expecting revenue to decline by between 1% and 2% due to weaker non-UK trading, as well as softer Corporate and Public Sector markets. It confirmed expectations of GBP8.25 billion in adjusted Ebitda, which for the first half rose 1% on-year to GBP4.13 billion from GBP4.09 billion.
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COMPANIES - FTSE 250
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Tate & Lyle said its full-year outlook remains unchanged following its first-half results. Revenue decreased on-year to GBP775 million from GBP857 million, while pretax profit fell to GBP104 million from GBP119 million. The company nonetheless increased its interim dividend to 6.4p from 6.2p per share.
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For the first nine months of 2024, ITV said group revenue declined 8% to GBP2.74 billion from GBP2.98 billion the prior year. Media & Entertainment revenue rose 4% to GBP1.52 billion and advertising revenue was flat, while Studios revenue plummeted 20% to GBP1.22 billion, hurt as expected - ITV said - by the 2023 US writers' and actors' strikes. ITV said it expects record adjusted Ebitda from ITV Studio in the full year, with margins within its 13% to 15% target range, with total ad revenue up 2.5%.
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OTHER COMPANIES
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For the third quarter, Hummingbird resources said production from its Kouroussa mine rose on-year to 12,389 ounces from 1,047 ounces. Overall, gold production totalled output of 26,376 ounces. The firm swung to an Ebitda loss of USD3.83 million from earnings of USD1.2 million. Despite reporting operational challenges, Hummingbird said it expects full-year production between 100,000 and 115,000 ounces. Also, the company announced its receipt of a USD10 million loan tranche and has agreed to a debt-to-equity conversion deal. It has moreover agreed with lenders to defer USD30 million in loans that were due on October 31. Finally, Geoff Eyre was appointed to the board as interim chair, effective immediately. Executive Chair Dan Betts says: "With Geoff Eyre at the helm as interim CEO, we will conduct a thorough review of the business, enabling better informed strategic decisions that align with our long-term goals."
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By Emma Curzon, Alliance News reporter
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