31st Dec 2024 07:52
(Alliance News) - London's FTSE 100 is called to open lower on Tuesday, but is still on track to register an annual advance.
London's flagship index is up 5.0% heading into the final day of 2024, falling short of loftier gains seen in US stocks this year, and the DAX 40 index in mainland Europe. Frankfurt's blue-chip benchmark rose 19% in 2024. Markets in Frankfurt are closed on Tuesday. They are also closed in Tokyo.
The CAC 40 in Paris is down 3.0% so far in 2024, and is called to open 0.1% lower on Tuesday.
Over in New York, the Dow is up 13%, the S&P 500 up 24% and the Nasdaq Composite is up 30%. All three registered sizeable declines at the start of the week, however.
Swissquote analyst Ipek Ozkardeskaya commented: "Of course, this week, the trading volumes are low, everyone – or almost everyone – is on holiday and the slightest moves in the market lead to exaggerated price action.
"The consensus is that 2025 should be a good year, that the easing central bank policies and falling yields should help the US big tech rally to further broaden toward the non-tech pockets of the market, and beyond the US, with Europe seen as a good buy target for those betting that the European stocks will converge with their US peers."
In a quiet start to the day on Tuesday, China was in focus. The Asian powerhouse needs to be "more proactive" next year to boost growth, its leader said.
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 0.3% at 8,098.51
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Hang Seng: closed up 0.1% at 20,059.95
S&P/ASX 200: closed down 0.9% at 8,159.10
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DJIA: closed down 418.48 points, 1.0% at 42,573.73
S&P 500: closed down 1.1% at 5,906.94
Nasdaq Composite: closed down 1.2% at 19,486.78
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EUR: higher at USD1.0405 (USD1.0384)
GBP: higher at USD1.2553 (USD1.2517)
USD: lower at JPY156.32 (JPY157.19)
GOLD: higher at USD2,607.45 per ounce (USD2,597.04)
(Brent): higher at USD74.54 a barrel (USD73.93)
(changes since previous London equities close)
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ECONOMICS
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Tuesday's key economic events still to come:
14:00 GMT US house price index
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The year ahead will be a "buyer's market" with UK house hunters having more negotiating power and sales picking up, experts have predicted. But more bullish expectations for 2025 are also tinged with caution, with a key stamp duty discount set to end in the spring, and uncertainty hanging over the wider economy and the speed of future potential interest rate cuts. Tim Bannister, a property expert at Rightmove, said: "We're anticipating a stronger 2025, with higher price growth and more transactions than in 2024." He continued: "The year ahead is not without some caution. We think 2025 will continue to be a buyer's market, which could provide buyers with more negotiating power, given the number of available properties per estate agent is at a decade-high for this time of year. There's less competition amongst buyers than during the pandemic markets, which could provide them with some breathing room to choose the right home at the right price." He added that while "the outlook is positive for 2025 … there is some uncertainty about what happens when stamp duty rises from April 1, as well as ongoing geopolitical tensions and the trend of inflation." Lucian Cook, head of residential research at property firm Savills, said: "First-time buyer activity is expected to be front-loaded in 2025 as these buyers rush to beat the end (of) stamp duty concessions in March." He predicted that potential home movers who have previously been holding back due to a harsher mortgage rate environment will return.
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President Xi Jinping said China must put "more proactive" macroeconomic policies in place next year, state media reported, as he addressed a top political advisory body on New Year's Eve. The country has struggled this year to climb out of a slump fuelled by a property market crisis, weak consumption and soaring government debt. Beijing has unveiled a string of aggressive measures in recent months aimed at bolstering growth, including cutting interest rates, cancelling restrictions on homebuying and easing the debt burden on local governments. But economists have warned that more direct fiscal stimulus aimed at shoring up domestic consumption is needed to restore full health in China's economy. "We must... further comprehensively deepen reform, expand high-level opening up, better coordinate development and security, (and) implement more proactive and effective macroeconomic policies," state broadcaster CCTV quoted Xi as telling the National Committee of the Chinese People's Political Consultative Conference at a New Year's tea party. Beijing is aiming for an official national growth target this year of about five percent, a goal officials have expressed confidence in achieving but which many economists believe it will narrowly miss. "The new quality productivity develops steadily, and annual GDP is expected to grow by about 5%," Xi reiterated on Tuesday. The International Monetary Fund expects China's economy to grow by 4.8% this year and 4.5% next year.
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COMPANIES - FTSE 100
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Bunzl said it has completed a GBP250 million share buyback programme it kicked off in August. The distribution firm said it will kick off a 2025 programme of GBP200 million, concluding on March 3, the date it releases annual results.
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COMPANIES - FTSE 250
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Wizz Air said it has struck a commercial support agreement with engine maker Pratt & Whitney related to the grounding of aircraft. The groundings have been down to issues in the PW1100G-JM geared turbofan engines, manufactured by East Hartford, Connecticut-based Pratt & Whitney. "The company is projecting a continued grounding of around 40 Airbus A320NEO family aircraft through FY26 due to inspections required on its GTF fleet," Wizz Air said. The budget carrier said the commercial support pact includes "both operational support and a compensation package" covering costs associated with grounded aircraft. "The company continues to take proactive action to mitigate the financial and operational impact of the grounded aircraft and will continue to work with Pratt & Whitney to ensure that aircraft are returned to operation as soon as possible," Wizz Air said. Wizz Air last month reported lower profit in the first half of its financial year, noting the grounding of aircraft due to ongoing inspections of some Pratt & Whitney engines, which began in September 2023 following the discovery of manufacturing issues.
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OTHER COMPANIES
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Digital 9 Infrastructure said it has entered into a deal to sell its interest in the EMIC-1 intercontinental subsea cable system for USD42 million. The sum is a 15% discount to the June 30 valuation of USD49.6 million, the investor in internet infrastructure, such as data centres and subsea fibre, said. "The project continues to be impacted by ongoing conflicts in the Red Sea area, which have led to an indefinite delay to its final construction completion. The transaction also releases the group from USD10 million of additional construction commitments," Digital 9 said. Chair Eric Sanderson said the sale of EMIC-1 is a "key milestone for progressing the wind-down of the company". The deal can allow the firm to "further deleverage its balance sheet" by trimming the balance of a revolving credit facility of USD53 million. "The company is discussing options with the RCF lenders, to extend the remaining balance of the RCF beyond the current maturity date of 31 March 2025. The remaining balance of the RCF is expected to be repaid through proceeds from other live sale initiatives that are progressing in parallel," Digital 9 added. "The company is also in advanced discussions on the sale of the remainder of the subsea cable business, AquaComms, and expects to report on further progress in due course. The valuation process has commenced in respect of the wider investment portfolio for the year ending December 31, 2024."
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Sareum Holdings said a biopharma company in the US has served notice to end a development and commercialisation license for the SRA737 clinical-stage cancer treatment. The Cambridge, England-based pharmaceutical company back in January said co-development partner CRT Pioneer Fund entered into a development and commercialisation pact for SRA737 with the unnamed US biopharmaceutical company. However, CPF has informed Sareum that the US-based firm served a notice of termination of the SRA737 licence last week Thursday. Sareum added: "The notice period runs for 90 days and Sareum will meet the team from CPF to discuss what steps, if any, are appropriate to seek an alternative licensee once the asset has returned to CPF on March 27, 2025." Sareum Executive Chair Stephen Parker said the firm is "clearly disappointed by this outcome" but is now "fully focused on its pipeline of TYK2/JAK1 inhibitors and our priority is to drive our lead programme, SDC-1801, towards Phase 2 development."
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By Eric Cunha, Alliance News news editor
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