3rd Mar 2023 07:56
(Alliance News) - Stocks in London were called higher on Friday, following an indication of strength in the service sector in China.
Later Friday, there will be services PMI readings from the EU, UK and US as well.
Growth in China's service sector sped up sharply in February, according to final survey data on Friday, as business continued to rebound after the rollback of anti-Covid measures.
The Caixin services purchasing managers' index rose to 55.0 points in February from 52.9 in January. Rising further above the 50-point no-change mark, it shows the pace of growth picked up during the month. It was also markedly higher than FXStreet-cited consensus of 50.5.
"Overall new business rose solidly in February, with the rate of growth the quickest seen since April 2021. Panel members often mentioned that the relaxation of Covid-19 measures had underpinned the recovery in customer demand and client numbers," Caixin explained.
The composite PMI - which weighs services and manufacturing indices - rose to 54.2 from 51.1. Released on Wednesday, China's manufacturing PMI rose to 51.6 from 49.2.
In corporate news, education publisher Pearson upped its full-year dividend on the back of strong financial results. National Grid said it has accepted price control arrangements proposed by Ofgem.
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 0.3% at 7,966.1
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Hang Seng: up 0.9% at 20,618.36
Nikkei 225: closed up 1.6% at 27,927.47
S&P/ASX 200: closed up 0.4% at 7,283.60
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DJIA: closed up 341.73 points, or 1.1%, at 33,003.57
S&P 500: closed up 29.96 points, or 0.8%, at 3,981.35
Nasdaq Composite: closed up 83.50 points, or 0.7%, at 11,462.98
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EUR: up at USD1.1980 (USD1.0606)
GBP: up at USD1.1980 (USD1.1949)
USD: down at JPY136.48 (JPY136.15)
Gold: up at USD1,842.53 per ounce (USD1,837.58)
(Brent): down at USD84.50 a barrel (USD84.84)
(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 CET EU services PMI
11:00 CET EU producer price index
08:00 CET Germany foreign trade
09:55 CET Germany services PMI
11:00 GMT Ireland gross domestic product
09:30 GMT UK official reserves
09:30 GMT UK services PMI
08:45 PST US Fed Atlanta President Raphael Bostic speaks
09:45 EST US services PMI
10:00 EST US ISM services PMI
14:00 CST US Federal Reserve Board Governor Michelle Bowman speaks
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The strongest growth for Ireland's service providers in almost a year gave a boost to the country's entire private sector last month, with input cost inflation easing to a 20-month low, survey results on Friday showed. The AIB Ireland services business activity index rose to 58.2 points in February from 54.1 in January, well clear of the neutral 50-point mark that separates expansion from contraction. This marked two consecutive years of monthly improvement in the Irish service sector, index compilers S&P Global said, and was the highest reading since May last year. The composite purchasing managers' index - which combines service and manufacturing sector survey results - rose to 54.5 points in February from 52.0 in January.
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Growth in UK shop footfall decelerated in February as the cost-of-living crisis continued to take a bite out of consumer demand. According to data from BRC-Sensormatic IQ, total UK footfall increased by 10.4% in February against the prior year, slowing from an annual increase of 12.5% in January. February's footfall growth was also worse than the three-month average annual increase of 12.8%. Helen Dickinson, chief executive of the British Retail Consortium, said: "Growth in footfall slowed this month after the rush of Christmas shopping and January sales. Some people are making fewer visits as the cost of living continues to bear down ahead of the April energy price rise. Despite this, high streets continue to show the biggest improvement compared to last year, when concerns around Covid kept people away from town and city centres."
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BROKER RATING CHANGES
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Deutsche Bank raises Pennon to 'hold' (sell) - price target 840 (870) pence
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Jefferies raises PPHE Hotels to 'buy' (hold) - price target 1,600 (1,300) pence
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Berenberg cuts Hunting to 'hold' (buy) - price target 325 pence
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COMPANIES - FTSE 100
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Education publisher Pearson said that sales rose 12% to GBP3.84 billion from GBP3.43 billion a year ago. Pretax profit nearly doubled to GBP323 million from GBP177 million. The company declared a 14.9 pence final dividend, up from 14.2p. This brings the annual dividend to 21.5p, up from 20.5p. Looking ahead, Pearson said it is confident of achieving underlying sales growth of low to mid-single digit in 2023, with adjusted operating profit in line with current market expectations. "These results are testament to the strong momentum that we've been building operationally and strategically over the past 24 months. For a second consecutive year, our financial performance was ahead of expectations, and we saw progress in our strategic initiatives, which are taking Pearson on a new, exciting journey," said Chief Executive Andy Bird.
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Electricity and gas utility National Grid confirmed it has accepted all of the RIIO-ED2 price control arrangements proposed by UK energy regulator Ofgem, which covers its National Grid Electricity Distribution businesses for the period April 2023 to March 2028. "These price controls will further accelerate our delivery of smart, decarbonised electricity distribution networks in the UK, at the lowest cost to customers," National Grid said. It added that they also form an "important" part of its wider financial framework, with up to GBP40 billion of investment from 2021 to 2026.
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COMPANIES - FTSE 250
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IMI said revenue in 2022 rose 10% to GBP2.05 billion from GBP1.87 billion a year ago. Pretax profit jumped 13% to GBP346 million from GBP307 million. Basic earnings per share rose 15% to 105.5p from 92.0p. On the back of strong annual results, the engineering company upped its full-year dividend to 25.7p from 23.7p. Chief Executive Roy Twite said: "We continued to make significant progress in 2022, delivering our third consecutive year of profit and margin growth." Looking ahead, IMI said that based on current market conditions, it expected 2023 full-year adjusted EPS to be around 111p.
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Murray International said that its net asset value per share at December 31 was up 4.3% to 1,293.3p from 1,240.3p a year before. The Edinburgh-based trust's 2022 NAV total return stood at 8.8% versus its benchmark of 7.3%. Looking ahead, Murray International expects the "deep-rooted" macroeconomic difficulties to continue. "Seldom has the economic outlook seemed so uncertain," it added. Separately, on Friday, Murray asked shareholders to approve the sub-division of its ordinary shares of 25p each into five new shares of 5p each. "The sub-division is intended to assist monthly savers and those who reinvest their dividends or are looking to invest smaller amounts, and to improve the liquidity in and marketability of the company's shares," the company explained. It will hold its annual general meeting on April 21.
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OTHER COMPANIES
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Globalworth Real Estate Investments said revenue in 2022 rose to EUR239.3 million from EUR219.4 million a year ago. However, the real estate investor swung to a pretax loss of EUR11.2 million from a profit of EUR62.1 million. The company explained that this was due to revaluation losses of EUR89.5 million in 2022, compared to the EUR5.7 million revaluation losses in 2021. Globalworth announced that it will pay shareholders a dividend of EUR0.27 per share for 2022. This is down from 2021's dividend of EUR0.30.
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By Sophie Rose, Alliance News reporter
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