13th Sep 2024 07:41
(Alliance News) - London's FTSE 100 is called to open a touch higher, with more strong trade in New York adding some cautious confidence to markets on this side of the Atlantic.
A theme of the week so far has been a rebound in US tech stocks, with chipmaker Nvidia at the heart of the bounce, registering another gain on Thursday.
"Nvidia gained nearly 2% on news that OpenAI is preparing the release of 'Strawberry' – a new AI model that's 'designed to handle advanced problem-solving tasks better by focusing on step-by-step human-like reasoning, which enhances the quality of its responses, especially for difficult queries'. This is how ChatGPT describes the new 'Strawberry'. Combined with Nvidia CEO Jensen Huang's complaints about 'too strong demand for its chips' yesterday, the AI fatigue seems to have eased this week," Swissquote analyst Ipek Ozkardeskaya commented.
The euro was up on the dollar, meanwhile, in the aftermath of the European Central Bank's interest rate cut.
Ozkardeskaya added: "ECB Chief Christine Lagarde kept a poker face for what's next and said that there is no commitment to a particular rate path."
In early UK corporate news, deal-making was in focus. National Grid revealed an agreement to sell an offering to the UK government, Flutter bolstered its Brazilian portfolio, while a possible tie-up between Vodafone's UK arm and Three has received watchdog scrutiny.
Here is what you need to know at the London market open:
----------
MARKETS
----------
FTSE 100: called up 0.1% at 8,246.77
----------
Hang Seng: up 0.7% at 17,365.38
Nikkei 225: down 0.7% at 36,581.76
S&P/ASX 200: up 0.3% at 8,099.90
----------
DJIA: closed up 235.06 points, 0.6%, at 41,096.77
S&P 500: closed up 0.8% at 5,595.76
Nasdaq Composite: closed up 1.0% at 17,569.68
----------
EUR: higher at USD1.1075 (USD1.1036)
GBP: higher at USD1.3141 (USD1.3079)
USD: lower at JPY141.06 (JPY142.33)
GOLD: higher at USD2,565.67 per ounce (USD2,552.77)
(Brent): lower at USD72.31 a barrel (USD72.35)
(changes since previous London equities close)
----------
ECONOMICS
----------
Friday's key economic events still to come:
10:00 BST eurozone industrial production
13:30 BST US export and import prices
----------
UK Prime Minister Keir Starmer has arrived in the US to hold talks with President Joe Biden on resolving the conflicts in Ukraine and Gaza. Starmer is expected to meet Biden in the White House on Friday following pleas from Ukraine to lift restrictions on using Western weaponry against Russian targets. The PM's visit to Washington DC comes just two months before Americans go to the polls in the presidential election, and follows Foreign Secretary David Lammy's trip to Kyiv alongside US Secretary of State Antony Blinken. Neither man was drawn on granting Ukraine permission to use the long-range missiles supplied by the West to attack targets in Russia, which is a key request of President Volodymyr Zelensky. Concern about escalation has been one of the reasons why permission has not yet been given to Kyiv. Iran has been hit with sanctions by the UK and US after the two countries formally accused Tehran of supplying ballistic missiles to Russia. Lammy and Blinken announced further financial support for Ukraine, including a GBP600 million package from the UK and USD717 million from the US to meet immediate humanitarian, energy and stabilisation needs. The UK package includes a reaffirmation of Rishi Sunak's pledge of GBP242 million, as well as USD484 million worth of loan guarantees for World Bank lending before the end of the year, while the US package includes USD325 million to support Ukraine's energy needs. Starmer's second trip to the US as PM will also see him discuss the conflict in the Middle East, and any potential progress that can be made towards the release of hostages and a ceasefire deal.
----------
BROKER RATING CHANGES
----------
Deutsche Bank cuts AstraZeneca to 'sell' (hold) - price target 10,500 (11,000) pence
----------
Exane BNP cuts Great Portland Estates to 'underperform' (neutral) - price target 310 (340) pence
----------
COMPANIES - FTSE 100
----------
A telecoms tie-up between Vodafone and Three in the UK will lead to a "substantial lessening of competition", a watchdog said in a provisional finding. The UK Competition & Markets Authority said the deal could mean "tens of millions of mobile customers" see price increases. "The CMA has particular concerns that higher bills or reduced services would negatively affect those customers least able to afford mobile services as well as those who might have to pay more for improvements in network quality they do not value," it said. Wholesale telecommunications operators, including the likes of Lyca Mobile, Sky Mobile and Lebara, could also be hurt as they rely on existing network operators to provide their services. In response, Vodafone said it will work with the CMA to ensure the "once-in-a-generation" deal gets approved. Making the case for the deal, Vodafone said: "The combination of Vodafone and Three will fix the country's dysfunctional mobile market characteristics, unleashing more competition and investment." It added: "The merger of Vodafone and Three will transform this current reality, bringing best-in-class 5G to every community, school and hospital in the country. The CMA also recognises that the merger would improve network quality. We will continue to work with them to demonstrate the merged company will deliver in full on the committed network investment. Vodafone and Three disagree with a number of elements in today's provisional findings. A final decision is not due until 7 December, and we will continue to positively engage with the CMA and look to resolve outstanding matters. Vodafone and CK Hutchison, the owner of the Three, announced plans in June of last year to combine the UK businesses into a joint venture. Vodafone is to own 51% and CK Hutchison 49% of the combined operation. The CMA in April of this year referred the deal to a more in-depth probe.
----------
National Grid said it has struck a deal with the UK government which will bring the Electricity System Operator into public hands. National Grid's Electricity System Operator arm will be sold for an enterprise value of GBP630 million. "The transaction is an important milestone for the creation of the independent National Energy System Operator. National Grid and HM government expect to complete the transaction on 1 October 2024 when HM government, together with Ofgem, aim to establish NESO," National Grid added. The UK government said: "The publicly owned body will support the UK's energy security, help to keep bills down in the long term and accelerate the government's clean power mission." The government said that there is currently no entity charged with overseeing the planning and design of the UK's electricity and gas networks. "NESO will fill this gap – breaking down the siloes which currently exist between the planning of electricity and gas systems, with independent oversight for the design of all Great Britain's energy networks," it added.
----------
COMPANIES - FTSE 250
----------
Balfour Beatty said it has been awarded a GBP363 million pact by National Grid as part of the delivery of an electricity project in the UK. The deal is part of National Grid's Bramford to Twinstead project, infrastructure construction contractor Balfour Beatty explained. "The contract has been awarded through National Grid's RIIO-2 framework. On completion, the project will reinforce the electricity network in East Anglia and ensure that it can continue to reliably and securely transport the cleaner, greener electricity required for the UK's transition to net zero," Balfour added. Balfour will replace an existing high voltage electricity network between Bramford Substation in Suffolk and Twinstead Tee in Essex. It will deliver a new line spanning 18 kilometres and also install 11 kilometres of underground cable. "The company will work closely with ecologists and conservationists throughout to mitigate any disruption to local wildlife and has committed to delivering a 10% biodiversity net gain over the project lifecycle," the FTSE 250 listing added.
----------
OTHER COMPANIES
----------
Flutter Entertainment said it has forked out USD350 million to secure a majority stake in a Brazilian gambling firm, handing the Paddy Power owner a "podium position" in a fast-growing market. Flutter will acquire 56% of NSX Group, which operates the Betnacional brand. The stake will be acquired for USD350 million in cash and Flutter will also "contribute its existing Betfair Brazil business" for a 56% interest in the newly combined Flutter Brazil arm. "In addition, a mechanism has been put in place to enable Flutter to increase its shareholding through reciprocal put/call arrangements in year five and year ten following the completion date," the firm explained. Flutter Chief Executive Officer Peter Jackson said: "I am excited to announce the addition of NSX, operator of Betnacional a leading Brazilian sports betting and iGaming brand, to the Flutter portfolio. We believe that combining the extensive local expertise of the NSX team, our existing Betfair business and the power of the Flutter Edge, will create a compelling opportunity to capitalize on the growth opportunity in Brazil which presents an exciting runway of future growth."
----------
By Eric Cunha, Alliance News news editor
Comments and questions to [email protected]
Copyright 2024 Alliance News Ltd. All Rights Reserved.