12th Jun 2025 07:47
(Alliance News) - London's FTSE 100 is called to open lower on Thursday, with Middle East tensions and tariff worries keeping enthusiasm at bay.
US President Donald Trump said he will send letters to trading partners soon on tariff rates.
"We're going to be sending letters out in about a week and a half, two weeks, to countries, telling them what the deal is," he said to reporters.
"At a certain point, we're just going to send letters out. And I think you understand that, saying this is the deal, you can take it or leave it."
Trump said US personnel were being moved from the potentially "dangerous" Middle East on Wednesday as nuclear talks with Iran faltered and fears grew of a regional conflict. Trump also reiterated that he would not allow Iran to have a nuclear weapon, amid mounting speculation that Israel could strike Tehran's facilities.
The pound, meanwhile, surrendered some progress after a softer than expected reading of the UK economy. It had been on the cusp of USD1.36 mark before the data was released.
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 0.4% at 8,827.85
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Hang Seng: down 0.9% at 24,138.12
Nikkei 225: down 0.6% at 38,182.47
S&P/ASX 200: down 0.3% at 8,565.10
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DJIA: closed down 1.10 points at 42,865.77
S&P 500: closed down 16.57 points, 0.3%, to 6,022.24
Nasdaq Composite: closed down 99.11 points, 0.5%, at 19,615.88
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US 10-year Treasury yield: 4.41% (4.44%)
US 30-year Treasury yield: 4.91% (4.93%)
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EUR: higher at USD1.1518 (USD1.1486)
GBP: higher at USD1.3559 (USD1.3545)
USD: lower at JPY143.74 (JPY144.63)
GOLD: higher at USD3,371.96 per ounce (USD3,338.63)
(Brent): higher at USD69.21 a barrel (USD68.23)
(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 BST Ireland CPI
13:30 BST US PPI
13:30 BST US initial jobless claims
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The UK economy fell at a faster pace than expected in April, numbers showed, as services output slumped. According to the Office for National Statistics, the UK economy fell 0.3% in April from March. It had expanded 0.2% in March from February. The reading for April fell short of expectations, as a smaller decline of 0.1% was expected, according to consensus cited by FXStreet. "Monthly services output fell by 0.4% in April 2025, following growth of 0.4% in March 2025, and was the largest contributor to the fall in GDP in the month," the ONS said. "Production output fell by 0.6% in April 2025, following a fall of 0.7% in March 2025." In the three months to April, the UK economy grew 0.7% compared with the three months to January. The ONS said there were signs "that some activity may have been brought forward from April to earlier in the year". "There was growth in all three main sectors in the three months to April 2025, with a rise of 0.6% in services sector output the main contributor to the increase in GDP, while production and construction output grew by 1.1% and 0.5%, respectively," the ONS added.
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Property professionals' expectations for future sales are becoming more upbeat, although the UK housing market remains subdued, according to surveyors. Looking ahead, a net balance of 25% of professionals expect the number of house sales to increase over the next year, marking the strongest reading since February, the Royal Institution of Chartered Surveyors said. But its May survey also found that 26% of professionals reported seeing new buyer inquiries falling rather than rising, marking the fifth month in a row of decreases. The figure is slightly less downbeat than seen in March and April, Rics said. A net balance of 28% of professionals reported seeing the number of sales agreed falling. Sales volumes are generally expected to flatten out rather than fall in the three months ahead, the survey indicated. House prices also appeared to be broadly flat, with a net balance of 8% of professionals reporting seeing prices fall rather than rise in May, which was slightly more than the balance of 3% who reported seeing this in April. Over the next year, a balance of 34% of property professionals expect house prices to increase.
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Some GBP6 billion will be spent on speeding up testing and treatment in the National Health Service, Rachel Reeves has announced, after she placed the health service at the heart of UK government spending plans. The UK chancellor unveiled the investment, which includes new scanners, ambulances and urgent treatment centres aimed at providing an extra four million appointments in England over the next five years, after Wednesday's spending review. The funding is aimed at reducing waiting lists and reaching Labour's "milestone" of ensuring the health service carries out 92% of routine operations within 18 weeks. In the review, Reeves set out day-to-day spending across government for the next three years, as well as plans for capital investment over the next four years. The NHS and defence were seen as the winners from the settlement, as both will see higher than average rises in public spending. This comes at cost of squeezing the budgets of other Whitehall departments and experts have warned tax rises may be needed later this year.
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The UK has reached a deal with the EU over Gibraltar's border with Spain that will allow travellers to cross by land without checks. The agreement on a "fluid border" clears the way to finalise a post-Brexit deal on the territory with the EU. But those flying into Gibraltar from the UK will face one check from Gibraltarian officials and another by the Spanish on behalf of the EU. This is because the land border will allow those arriving by air access to the European Schengen free travel area unchecked once they are in Gibraltar. The UK and Gibraltar insisted the changes would not affect the British overseas territory's sovereignty.
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BROKER RATING CHANGES
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Barclays cuts Lancashire price target to 660 (700) pence - 'equal weight'
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COMPANIES - FTSE 100
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Grocer Tesco left its annual outlook unchanged, after it kicked off the financial year with first-quarter sales growth. Sales in the 13 weeks to May 24 amounted to GBP16.38 billion, rising 5.3% on-year, or 5.5% at constant currency. Like-for-like sales were 4.6% higher annually. "We are pleased with our performance across the first quarter. Our continued commitment to delivering great value, quality and service for our customers has contributed to like-for-like sales growth across all parts of the group," Chief Executive Officer Ken Murphy said. Like-for-like sales in the UK alone grew 5.1%, while in Ireland, they rose 5.5%. Booker like-for-like sales were 2.0% higher and Central Europe like-for-like sales rose 4.1%. Murphy added: "In the UK we have continued to see market share gains and increased customer satisfaction across a wide range of measures, a reflection of our powerful value proposition, strong availability and focus on product quality and innovation." The CEO said the grocery market "remains intensely competitive". Tesco still expects adjusted operating profit of between GBP2.7 billion and GBP3.0 billion for the year, at best a 4.1% decline from GBP3.13 billion the prior year. It still predicts free cash flow within its medium-term guidance range of GBP1.4 billion and GBP1.8 billion.
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Halma's reported annual profit growth amid "varied market conditions and a challenging economic
and geopolitical backdrop". The life-saving equipment maker posted pretax profit of GBP384.3 million for the year ended March 31, up 13% from GBP340.3 million. Revenue rose 11% to GBP2.25 billion from GBP2.03 billion. Halma upped its final dividend by 7.0% to 14.12 pence per share from 13.20p a year earlier. Its total dividend was also 7.0% higher at 23.12p from 21.61p. CEO Marc Ronchetti said: "This has been another successful year for Halma, reflecting the contributions and commitment of everyone in the group. We delivered record revenue and profit, with strong margins and cash generation, and increased returns on capital. We achieved our 22nd consecutive year of profit growth, and delivered our 46th consecutive year of dividend growth of 5% or more." The CEO continued: "Achieving such a strong performance amidst varied market conditions and a challenging economic and geopolitical backdrop is a testament to the fundamental strengths of our sustainable growth model." Halma said it has made a "positive start" to the new financial. It expects upper single digit organic constant currency revenue growth for the year. Its adjusted earnings before interest and tax margin is tipped to land "modestly above" the middle of its 19%-23% target range. The adjusted Ebit margin in the year just gone expanded to 21.6% from 20.8%.
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COMPANIES - FTSE 250
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Housebuilder Crest Nicholson said it is on track to meet expectations after a first half that went in line with expectations. It reported pretax profit of GBP9.4 million for the six months to April 30, swinging from a loss of GBP30.9 million a year prior. In the prior financial year, its bottom line was hurt by exceptional costs, including those to remediate buildings with possible fire safety defects, and site costs related to "certain build defects". Revenue in the half-year just ended fell 3.1% annually to GBP249.5 million from GBP257.5 million. "I am pleased to report that Crest Nicholson has delivered trading in line with expectations in the first half and is on track to meet its FY25 guidance," CEO Martyn Clark said. "The housing market continues to show signs of stabilisation with an incrementally easing planning system, improving affordability and strong support from lenders. Customer appetite for the mid premium segment of the market, which is characterised by high-quality, well-designed homes in sought-after locations, and which is our focus segment remains robust. This places Crest Nicholson in a strong position to navigate the market with confidence and clarity of purpose." For the full-year, it still expects adjusted pretax profit between GBP28 million and GBP38 million,
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OTHER COMPANIES
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Electric vehicle charge services provider Pod Point Group agreed to a GBP10.6 million takeover from its majority shareholder. EDF Energy will pay 6.5p in cash for each Pod Point share it does not already own, a deal which values the London listing at GBP10.6 million on a fully diluted basis. The sum is a 24% premium to its 5.24p closing price on April 23, the day prior to EDF making a GBP10.1 million takeover proposal. EDF owns around 53% of Pod Point. "An independent Pod Point would require substantial third party financing, which would be highly challenging to obtain given current market conditions. Absent such further financing, Pod Point faces liquidity pressures and it is therefore clear that Pod Point requires a sustainable long term solution that eliminates the risk of financial distress," a statement on Thursday said. "EDF believes that Pod Point will be better positioned to pursue its long-term strategic goals as a wholly-owned subsidiary, free from the short-term demands of public equity markets and able to benefit from long-term funding commitments and EDF capabilities in Flex, Public Charging and home energy management." The offer has the support of just over 18% of Pod Point shares, in addition to EDF's own shares. Pod Point also released annual results on Thursday. Revenue in 2024 fell 17% to GBP52.9 million from GBP63.8 million, while its pretax loss widened to GBP84.5 million from GBP83.2 million. "2024 has been a year of challenges, change and progress for Pod. The number of EV cars sold in the UK was up 20% on 2023 and there remains a clear trajectory to the electrification of the UK economy given successive government policies," it said.
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By Eric Cunha, Alliance News news editor
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Related Shares:
Lancashire HoldingsTescoHalmaCrest NicholsonPod Point