2nd Mar 2023 07:57
(Alliance News) - Stocks were called to open flat in London, with market attention on a raft of corporate earnings, as well as a eurozone inflation reading at 1000 GMT.
Market consensus as cited by FXStreet is expecting consumer price inflation to slow to 8.2% in February from 8.6% in January.
"There is some room for disappointment," said Hargreaves Lansdown's Derren Nathan, noting that recent data from France, Spain and Germany have shown an upward trend to inflation.
This has prompted fears of further hawkishness from the European Central Bank. Meanwhile, the pound stayed soft against the dollar following cautious words from the Bank of England on Wednesday.
In early corporate news, housebuilder Taylor Wimpey said it expects completions to plunge in 2023. Private healthcare firm Spire Healthcare swung to annual profit.
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 1.0 points at 7,915.93
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Hang Seng: down 0.8% at 20,455.26
Nikkei 225: closed down 0.1% at 27,498.87
S&P/ASX 200: closed down 0.1% at 7,255.40
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DJIA: closed up 5.14 points at 32,661.84
S&P 500: closed down 18.76 points, or 0.5%, at 3,951.39
Nasdaq Composite: closed down 76.06 points, or 0.7%, at 11,379.48
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EUR: down at USD1.0638 (USD1.0663)
GBP: down at USD1.1987 (USD1.1994)
USD: up at JPY136.64 (JPY136.15)
Gold: down at USD1,832.46 per ounce (USD1,838.50)
Oil (Brent): up at USD84.24 a barrel (USD83.78)
(changes since previous London equities close)
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ECONOMICS
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Thursday's key economic events still to come:
11:00 CET EU consumer price index
11:00 CET EU unemployment
15:00 GMT UK BOE Chief Economist Huw Pill speaks
08:30 EST US unemployment insurance weekly claims report
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An overhauled Brexit deal for Northern Ireland keeps the border down the Irish Sea, and there will still not be free trade within the UK, former deputy DUP leader Michael Dodds has said. He lambasted a move by the UK government enabling the expansion and enhancement of border control posts at ports in the region, which he argued would serve to "cement in the reality" of the situation, while other critics at Westminster branded it "a humiliation".
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British-based renewables generated more electricity than gas this winter and produced enough to power every UK home through the winter, analysis has shown. Between October 1 and February 28, power generated by wind, hydro and solar reached 47 terawatt hours, according to the Energy & Climate Intelligence Unit. Generating the same amount of electricity using gas power stations would have required around 95TWh of gas – equal to 110 tankers of liquefied natural gas or the amount more than 10 million UK homes would burn over the winter.
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BROKER RATING CHANGES
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Peel Hunt cuts Travis Perkins to 'hold' (add) - price target 1,070 (1,030) pence
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Shore Capital raises Tesco to 'buy' (hold)
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COMPANIES - FTSE 100
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GSK said the US Food & Drug Administration's advisory committee voted to support its respiratory syncytial virus vaccine candidate for older adults. The Brentford, London-based pharmaceutical company said this was ahead of expected decision on US approval by May 3 for the vaccine candidate that aims to prevent of lower respiratory tract disease caused by RSV in adults aged 60 years and older. The Vaccines & Related Biological Products Advisory Committee voted unanimously that the data support the effectiveness of the vaccine, and 10-2 that the data support the safety of the vaccine. GSK said the vaccine could potentially be the first approved for older adults.
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In its first full-year results since its demerger from GSK in July last year, Haleon said revenue was up 14% to GBP10.86 billion from GBP9.55 billion. Organic revenue growth was 9.0%, and "well-balanced" between volume and price. Pretax profit fell 1.1% to GBP1.62 billion from GBP1.64 billion. Looking ahead, the consumer healthcare firm expects organic revenue growth of 4% to 6% in 2023, with its adjusted operating margin to be broadly flat after a 40 basis point hit from foreign exchange rates. It also expects to incur a net interest expense of around GBP350 million. Haleon declared an inaugural final dividend of 2.4p, and expects to commence interim dividends, subject to board approval.
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Asset manager Schroders said annual revenue in 2022 edged lower to GBP2.89 billion from GBP2.96 billion, as pretax profit dropped 23% to GBP586.9 million from GBP764.1 million. This was due to "mark-to-market movements on balance sheet items and acquisition related costs including amortisation". Operating profit remained "robust", dropping 14% to GBP723.0 million. The board recommended a final dividend of 15.0p per share, bringing the annual total to 21.5p, a touch higher than 21.4p in 2021. "2023 has started positively, particularly in Schroders Solutions," the firm said, but the outlook markets and the global economy is "mixed".
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Housebuilder Taylor Wimpey said 2022 was a year of "distinct halves", with the second half being more challenging. Annual revenue rose 3.2% to GBP4.42 billion from GBP4.28 billion, while pretax profit jumped 22% to GBP827.9 million from GBP679.6 million. Operating margin improved to 20.9% from 19.3%, thanks to "tight operational controls and price discipline". Taylor Wimpey said current trading is showing signs of improvement from the fourth quarter, but its reservation rate is significantly lower than previous. It expects average pricing to be similar in the first half from the second half of 2022. In 2023, it expects completions to be weighted in the second half and in the range of 9,000 to 10,500, which would be a sharp drop from 14,154 seen in 2022.
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London Stock Exchange Group said pretax profit jumped by 39% to GBP1.24 billion in 2022 from GBP894 million in 2021, as total income rose by 20% to GBP7.43 billion from GBP6.21 billion. LSEG declared a total dividend for 2022 of 107.0 pence per share, up 13% from 95.0p in 2021.
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COMPANIES - FTSE 250
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Spire Healthcare swung to annual profit in 2023, amid high demand for private healthcare. Spire said revenue rose 8.3% year-on-year to GBP1.20 billion from GBP1.11 billion, and pretax profit was GBP3.9 million, swung from a GBP1.9 million loss. Spire said the momentum has continued into the new year, with enquiries ahead of 2022 levels. It anticipates growth in revenue, profit and return on capital employed, as well as improved margins. It recommended a dividend payment, proposing a final payout of 0.5p.
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Television broadcaster ITV said total revenue in 2022 rose 7% to GBP4.35 billion from GBP4.04 billion, and pretax profit improved 4% to GBP501 million from GBP480 million. External revenue grew 8% to GBP3.73 billion, driven by ITV Studies and its digital businesses in Media & Entertainment. ITV proposed a final dividend of 3.3p, bring the full year total of 5.0p, which was higher than 3.3p in 2021. ITV said it has started 2023 with "strong momentum", and expects 5% annual revenue growth in ITV studios until 2026.
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OTHER COMPANIES
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Budget airline Ryanair said traffic was 22% higher in February, with 10.6 million passengers, compared to 8.7 million a year before. Load factor also improved, rising to 92% from 86%. On a rolling 12 month basis, the passenger total was 93% higher at 167.2 million, and load factor improved by 12% to 93%.
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By Elizabeth Winter, Alliance News senior markets reporter
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