23rd Jun 2016 07:18
LONDON (Alliance News) - Share prices in London opened firm on EU referendum day Thursday, as market participants continued to be more confident of a win for Remain than level-pegging opinion polls might seem to suggest.
With most attention elsewhere, Tesco was one of the few UK blue-chip companies reporting. Tesco said like-for-like sales grew in the first quarter of its financial year and announced the sale of its Harris + Hoole coffee shop business to rival chain Caffe Nero. The stock was a top FTSE 100 gainer, up 2.3%.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.6% at 6,299.86
FTSE 250: up 0.4% at 17,107.23
AIM ALL-SHARE: up 0.1% at 722.86
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Hang Seng: up 0.1% at 20,821.85
Nikkei 225: closed up 1.1% at 16,238.35
DJIA: closed down 0.3% at 17,780.83
S&P 500: closed down 0.2% at 2,085.45
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GBP: up at USD1.4749 (USD1.4712)
EUR: up at USD1.1339 (USD1.1280)
GOLD: soft at USD1,266.93 per ounce (USD1.268.67)
OIL (Brent): firm at USD50.11 a barrel (USD49.82)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Thursday's Key Economic Events still to come
(all times in BST)
UK referendum on EU membership
0830 Germany Markit services and composite PMI preliminary
0900 Italy industrial orders and sales
0900 EU Markit manufacturing, services and composite PMI preliminary
1000 Italy trade balance
1100 UK CBI distributive trades survey
1100 Ireland gross domestic product
1330 US Chicago Fed national activity index
1330 US initial and continuing jobless claims
1445 US Markit manufacturing PMI preliminary
1500 US Conference Board leading indicator
1500 US new home sales
1530 US EIA natural gas storage
1600 US Kansas Fed manufacturing activity
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Voters are going to the polls to decide whether the UK should remain in the European Union in a historic moment for the future of the country. Both sides of the referendum campaign have been locked in fierce fighting for months, and things came to a frenetic close on Wednesday as senior politicians travelled across the country to try and sway undecided voters. The polls in the run-up to the big day have suggested the referendum result is on a knife-edge, with neither side able to surge ahead in the final weeks. A record number of voters are eligible to take part in the referendum with the Electoral Commission putting the number at 46,499,537.
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Torrential downpours and flooding have swamped parts of London and the South East in the early hours of EU referendum day, with the London Fire Brigade inundated with a day's calls in just 90 minutes. Red "immediate action" flood warnings were issued for parts of south-east London and Essex as parts of the capital were expected to see a month's rain fall in a matter of hours. London Fire Brigade said it received hundreds of calls to reports of weather-related incidents including lightning striking property, flooded homes and businesses and rising waters trapping vehicles. There were reports of flooded streets as storms swept through, threatening disruption as voters head to polling stations.
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Turkish President Recep Tayyip Erdogan suggested he might call a referendum on Turkey's participation in membership talks with the EU, the state-run Anadolu news agency reported. He accused the bloc of stalling the process because Turkey is a majority-Muslim country. Earlier Wednesday, a senior official in Brussels said the EU will start negotiations on a new chapter in Turkey's membership bid on June 30, as required in a migration deal struck with Ankara. Turkey has officially been a candidate for EU membership since 1999, but progress has been slow, hampered by years of opposition from France and Germany, as well as tensions over Cyprus.
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Japan's manufacturing activity deteriorated for the fourth consecutive month in June, the latest flash survey from Markit Economics showed. The Markit/Nikkei Manufacturing Purchasing Managers' Index rose marginally to 47.8 in June from 47.7 in the previous month. However, any reading below 50 suggests contraction in the sector.
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The leading index for Japan, which measures the future economic activity, increased less than initially estimated in April, final figures from the Cabinet Office showed. The leading index rose to 100.0 in April from 99.1 in the previous month. The April figure was revised down from 100.5.
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North Korea on Thursday said it had successfully fired an intermediate-range ballistic missile, a news report said. Pyongyang conducted back-to-back missile tests on Wednesday from the eastern city of Wonsan, Yonhap News Agency reported. The first was presumed to have failed, it said. The second missile was fired at a higher angle and flew some 400 kilometres, reaching an altitude of around 1,000 kilometres, it said. "The test-fire was successfully conducted," said Pyongyang's official Korean Central News Agency, according to Yonhap.
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A group of Democratic lawmakers staged a sit-in on the floor of the US House of Representatives Wednesday to demand a vote on tougher gun laws. Congressman John Lewis declared several dozen lawmakers would occupy the floor until Speaker of the House Paul Ryan schedules a vote on a measure to keep people on the terrorist no-fly list from buying guns. The move comes amid demands for action on tougher gun laws following the latest mass shooting by an attacker pledging allegiance to Islamic State at a gay nightclub in Orlando, Florida, last week.
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Presumptive US Republican presidential nominee Donald Trump blasted Democratic opponent Hillary Clinton on Wednesday as a "world-class liar" who is beholden to special interests and personally benefited from her political connections. "She gets rich making you poor," Trump said in a speech in New York, outlining his attacks against Clinton as the candidates shift their attention from the long primary season to the November general election. The remarks came one day after Clinton delivered a speech arguing that Trump would be dangerous for the US economy.
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The Colombian government and the Revolutionary Armed Forces of Colombia guerrilla group announced a bilateral ceasefire, negotiators in the Cuban capital Havana said, in what is a last step towards a peace accord expected for next month. The agreement included stipulations on arms surrender, security guarantees and the fight against organized criminal organizations that include groups denoted as paramilitary, the government and FARC said in a statement.
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BROKER RATING CHANGES
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BERENBERG CUTS BAE SYSTEMS TO 'HOLD' ('BUY') - TARGET 520 (570) PENCE
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BERENBERG INITIATES JOHN LAING GROUP WITH 'BUY' - TARGET 280 PENCE
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COMPANIES - FTSE 100
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Tesco reported growth in like-for-like sales in the first quarter of its financial year, marking its second consecutive quarter of like-for-like growth, and announced that it is selling its Harris + Hoole coffee shop business to rival chain Caffe Nero. The supermarket said like-for-like sales in the 13 weeks ended May 28 grew by 0.9% year-on-year, with 0.3% growth in the UK and and 3.0% in the international business. Tesco said volume grew by 2.2% in the UK and by 2.7% internationally, while transactions rose by 1.7% in the UK and by 1.5% internationally. The launch of its 'farm' brands performed well in the UK, Tesco said, but price deflation did hit UK like-for-like sales by 0.7%.
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Drugmaker AstraZeneca said the Advisory Committee on Immunization Practices of the Centers for Disease Control and Prevention in the US has made a negative interim recommendation on the use of the UK group's FluMist treatment for the 2016-17 influenza season. The updated guidance from the ACIP states the vaccine should not be used in any setting, based on CDC vaccine effectiveness data from the last three influenza seasons in the US. This indicated AstraZeneca's FluMist Quadrivalent did not demonstrate any statistically-significant effectiveness in children aged between two and 17.
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COMPANIES - FTSE 250
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Defence, aerospace and satellite communications technology company Cobham said it has secured a contract with aircraft manufacturer Airbus to supply the Inmarsat SB200 Evolution Service safety system. The contract, which will see aircraft in Airbus's single aisle and long-range aircraft ranges fitted with the communications technology from 2018, could be worth around USD200.0 million, Cobham said, with the potential for additional revenue as demand for satellite communications capability on board aircraft increases. The system, known as the Aviator 200S and 700S, will provide voice and data air-ground communication for the aircraft.
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Engineering business Weir Group said it has sold two businesses operating within the renewables sector for up to GBP36.7 million and said it remains on track to deliver full results in line with expectations, despite orders and revenue falling. Weir has agreed to sell American Hydro Corp and Ynfiniti Engineering Services for an initial combined consideration of GBP34.4 million, with the remainder being paid subject to certain conditions being satisfied. Weir said it will book a loss on disposal of around GBP5.0 million as the company continues to progress it plans to sell GBP100.0 million worth of assets.
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Recycled packaging company DS Smith reported revenue growth but only a marginal rise in pretax profit for its recently-ended financial year as costs related to acquisitions the company made dragged on results. DS Smith said pretax profit for the year to the end of April was GBP201.0 million, up slightly from the GBP200.0 million it made a year earlier. This was held back by exceptional charges of GBP79.0 million, up from GBP51.0 million a year earlier, as the group made five acquisitions and integrated those businesses over the course of the year. Stripping out this one-off effect, pretax profit rose to GBP280.0 million from GBP251.0 million. Revenue rose to GBP4.07 billion from GBP3.82 billion a year before.
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COMPANIES - LONDON MAIN MARKET AND AIM
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Stadium Group said it will not grow as much as expected during the current financial year after losing a "significant customer" as the supplier of wireless services warned its full-year results will be fail to meet current expectations. The company said it has received notice from a significant wireless customer in the telematics space that, following a period of reduced call-off, they will move product design in-house and manufacturing elsewhere.
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Media company Future said it has agreed to acquire the owner of Imagine Publishing for GBP14.2 million, entirely in shares. Future said it will issue 179.6 million shares to Miura (Holdings) to acquire the business, which would value the deal at GBP14.2 million based on Future's closing price of 7.90 pence on Wednesday. Imagine's publishing portfolio includes 19 periodical magazines, including Retro Gamer and Digital Photographer, and a significant presence in 'bookazines', a hybrid of books and magazines which provide magazine content in a book form and at book prices.
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COMPANIES - INTERNATIONAL
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Bank of America has been in discussions with US regulators about paying USD400 million to USD450 million to settle allegations it violated rules designed to safeguard client accounts, the Wall Street Journal reported citing people familiar with the matter. The Securities & Exchange Commission has been investigating whether Bank of America had proper controls for some customer accounts and retail brokerage funds. One of the issues: whether the bank used complicated trades and loans to free up billions of dollars in cash for its own uses that it would usually have had to set aside to meet regulatory requirements. A settlement could be announced as soon as Thursday.
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Goldman Sachs Group has told 98 employees in New York that their jobs are being eliminated, bringing the number of dismissals disclosed to state officials this year to at least 353. The reductions are part of a third round of layoffs at the firm. An earlier document in April cited 146 cuts, and a March filing detailed 109 dismissals.
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UBS has complied with an Internal Revenue Service summons for bank records held in its Singapore office, the US Justice Department said. Because UBS has now produced all Singapore-based records responsive to the request and the IRS determined that UBS complied with the summons, the Justice Department has voluntarily dismissed its summons enforcement action against the bank.
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Thursday's Shareholder Meetings
Tesco
Cyprotex
Flowgroup
Aureus Mining
BH Global
First Derivatives
Lifeline Scientific
Good Energy Group
Science in Sport
Serica Energy
Cambridge Cognition Holdings
IQE
Aberdeen New Thai Investment Trust
Exillon Energy
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By Tom Waite; [email protected]; @thomaslwaite
Copyright 2016 Alliance News Limited. All Rights Reserved.
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