23rd May 2023 07:57
(Alliance News) - Stocks in London were called to open lower on Tuesday, as US politicians continue to argue over the nation's debt ceiling and ahead of a slew of PMI releases.
A top US Republican on Monday said that his first one-on-one talks in months with President Joe Biden to avert a calamitous debt default were "productive" but that there was still no deal.
The White House meeting came after Biden returned from a trip to Asia early to hammer out a deal ahead of the US Treasury's June 1 cut off date for Congress to authorize more borrowing.
Japan's private sector saw its strongest month of growth since October 2013 in May, according to preliminary survey findings.
The au Jibun Bank flash composite purchasing managers' index rose to 54.9 points in May from 52.9 in April. Rising further above the 50-point mark that separates expansion from contraction, it shows growth has strengthened.
Tuesday's economic calendar has more flash PMI readings, including for the eurozone at 0900 BST, the UK at 0930 BST and the US at 1445 BST.
In UK corporate news, Altice has increased its stake in BT to 24.5%.
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 0.1% at 7,762.60
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Hang Seng: down 1.4% at 19,412.44
Nikkei 225: closed down 0.4% at 30,957.77
S&P/ASX 200: closed flat at 7,259.90
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DJIA: closed down 140.05 points, or 0.4%, to 33,286.58
S&P 500: closed up 0.65 of a point, at 4,192.63
Nasdaq Composite: closed up 62.88 points, 0.5%, at 12,720.78
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EUR: flat at USD1.0807 (USD1.0802)
GBP: unchanged at USD1.2426 (USD1.2424)
USD: soft at JPY138.49 (JPY138.52)
Gold: down at USD1,962.44 per ounce (USD1,972.21)
(Brent): up at USD76.25 a barrel (USD75.94)
(changes since previous London equities close)
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ECONOMICS
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Tuesday's key economic events still to come:
10:00 CEST EU balance of payments
10:00 CEST EU flash PMI
09:30 CEST Germany flash PMI
07:00 BST UK public sector finances
09:30 BST UK flash PMI
09:30 BST UK international trade in goods statistics
08:55 EDT US Johnson Redbook retail sales index
09:45EDT US flash manufacturing PMI
09:45 EDT US flash services PMI
10:00 EDT US Richmond Fed business activity survey
13:00 EDT US money stock measures
16:30 EDT US API weekly statistical bulletin
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US House Speaker Kevin McCarthy told reporters that negotiators were going to "work through the night" to move the sides closer on the US debt limit and that he and US President Biden would "talk every day to try to find a way to get this done". Debt limits are raised periodically to cover repayments on loans that have already been approved and spent, but House Republicans are insisting this time that averting a default must be paired with deep cuts to bring down the country's USD31.8 trillion debt. As they sat down for the meeting, Biden said "I am optimistic we are going to make some progress," adding both sides understood they have "a significant responsibility" to solve the impasse. Afterwards the president used similar language as McCarthy in a statement, calling the meeting "productive," while adding that "areas of disagreement" remain.
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BROKER RATING CHANGES
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RBC cuts abrdn European Logistics Income to 'sector perform' (outperform) - target 80 pence
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Bernstein raises Ryanair price target to 20 (17.50) EUR - 'outperform'
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JPMorgan places Whitbread on 'positive catalyst watch' into Q1
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COMPANIES - FTSE 100
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Altice UK has bought a further 650.0 million shares in telecommunications company BT. This increases its ownership to 2.44 billion shares, which represents about a 24.5% stake. Back in December 2021, Patrick Drahi's Altice lifted its stake in BT to 18% from 12% previously. At the time, Altice confirmed it had no plans to mount a takeover offer. In May 2022, BT said it had received notification from the UK secretary of state for Business, Energy & Industrial Strategy saying that the government was exercising its power under the National Security & Investment Act 2021 to investigate the increase in the French company's stake. Months later BT confirmed that the UK government would not take any further action over the increase in shareholding.
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RS Group said that revenue in the financial year that ended March 31 rose by 17% to GBP2.98 billion from GBP2.55 billion a year earlier. Pretax profit jumped 23% to GBP371.5 million from GBP302.2 million. RS declared a final dividend of 13.7p. This bought the full-year dividend to 20.9p, up 16% from 18.0p previously. Chief Executive Officer Simon Pryce said "RS delivered a strong performance in 2022/23 despite a more challenging macroeconomic backdrop in the second half. This reflected our on-going operational excellence initiatives, geographical, industry and product mix, inventory availability and strong pricing."
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Barratt Developments said that John Allan will be stepping down as chair on June 30, after nine years in the post. In January, Barratt named Caroline Silver as its next chair, succeeding John Allan on September 6. At the time it said Silver will join the board as a non-executive director on June 1. On Tuesday, Barratt said she will now takeover as chair from June 30. "The board believes it is in the best interests of Barratt to accelerate the planned transition to the new chair of the board to prevent the ongoing impact of the allegations against John from becoming disruptive to the company," Barratt said.
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COMPANIES - FTSE 250
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Cranswick said revenue in the financial year that ended March 25 rose 16% to GBP2.32 billion from GBP2.01 billion. Pretax profit jumped to GBP139.5 million from GBP129.9 million. The company has proposed a final dividend of 58.8p per share, an increase of 5.8% on the 55.6p paid last year. This brings the full year dividend up by 5.0% to 79.4p from 75.6p in financial 2022. "We have successfully navigated three years of unprecedented disruption and uncertainty and we now have a much larger, more diverse, and better equipped business, which is primed to deliver the next phase of growth," said CEO Adam Couch.
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Tullow Oil said it has been informed by its two minority partners of their intention to issue notices of withdrawal from Blocks 10BB, 13T and 10BA in the South Lokichar Basin. As a result, Tullow's working interest in these blocks will increase to 100% from 50%. "The board considers that owning 100% of the project creates more optionality, gives Tullow more flexibility in the ongoing process to secure strategic partners, creates a simpler Joint Venture Partnership and streamlines project delivery. This is a low-cost development project that has the potential to unlock material value for Kenya," Tullow said.
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UK water industry regulator Ofwat has launched an investigation into South West Water, relating to the accuracy of information reported by the company for its performance on leakage and per capita consumption. South West Water is a part of Pennon Group. "Ofwat sets performance targets for companies on leakage and PCC. Companies are assessed against these targets annually and can be penalised or rewarded, depending on their performance," Ofwat explained.
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OTHER COMPANIES
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Helical reported revenue of GBP49.8 million, down from GBP51.1 million a year earlier. It also said it has swung to a pretax loss of GBP66.4 million from a profit of GBP4.1 million. Despite this, Helical raised its final dividend to 8.70p, up 5.5% from 8.25p. This brings the total dividend for the year to 11.75p, an increase of 5.4% from 11.15p last year. "The past year has seen significant headwinds impact the central London office market. The macro-economic landscape has been altered by multiple geopolitical and economic events which have weakened the economic outlook; this and the recent rapid paradigm shift in monetary policy have combined to present a difficult environment for real estate," Helical said.
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By Sophie Rose, Alliance News reporter
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