2nd Sep 2015 06:32
LONDON (Alliance News) - UK stocks are set to open higher on Wednesday rebounding a little from the losses seen on Tuesday, following a slight recovery in Asian equities overnight.
IG says futures indicate the FTSE 100 to open higher at 6,082.7. The index ended down 3.0% at 6,058.54 on Tuesday after the latest manufacturing data from China intensified concerns about the world's second largest economy.
Wall Street closed heavily lower on Tuesday as well. The Dow 30 ended down 2.8%, the S&P 500 closed 3.0% lower and the Nasdaq Composite ended down 2.9%.
In Asia Wednesday, the Japanese Nikkei ended down 0.4%, the Hang Seng trades down 0.2% and the Shanghai Composite is down 0.9%. Stocks in Asia had traded much lower earlier but recovered some of their losses throughout the session. However, going into the long holiday weekend in China, equities still traded lower.
The Shanghai market is closed Thursday and Friday, while Hong Kong is closed Thursday only, to mark the 70th anniversary of WWII Victory Day.
"While we have seen a late recovery in Asia, that?s largely been as a result of some late state intervention in Chinese markets to help keep a floor under stocks, with the help of the Chinese equivalent of the plunge protection team," says Michael Hewson, chief market analyst at CMC Markets.
"In the past disappointing economic data ordinarily hasn?t normally been perceived as an overwhelmingly negative thing, as this weakness should keep overall monetary policy loose for the foreseeable future, with the potential for further easing measures in the weeks ahead," Hewson adds.
In London, industrial equipment rental company Ashtead Group said its pretax profit and revenue both surged higher in the first quarter of its financial year and said its full-year results look set to meet its expectations.
The FTSE 100 company said pretax profit rose 23% in the quarter to the end of July to GBP155.4 million from GBP117.5 million a year earlier, as its revenue rose to GBP618.6 million from GBP457.9 million, driven by a rise in its rental revenue to GBP539.6 million from GBP417.7 million.
Online fashion retailer ASOS confirmed press reports that its chief executive and co-founder, Nick Robertson, is to step down after 15 years in the role with immediate effect.
Robertson will be replaced by Nick Beighton, who joined the company in April as chief financial officer and who was last October promoted to the role of chief operating officer. Robertson will remain with the company as a non-executive director.
A bidding group led by private equity house MBK Partners Ltd is close to agreeing a deal to acquire Tesco's South Korean business for around USD6.0 billion including debt, Bloomberg reported on Wednesday, citing people with knowledge of the matter.
The MBK-led group, which also includes South Korea's National Pension Service, is understood to have moved into exclusive negotiations with the retailer on Wednesday morning to acquire the Homeplus business, Bloomberg said.
Technical products and services company Diploma said its revenue growth in the first nine months was held back by the slowdown in the oil and gas industry and sluggish European industrial markets and said its underlying operating margin will take a hit.
The FTSE 250-listed company said its revenue for the nine months to the end of September is expected to rise by around 9.0%, driven primarily by acquisitions but offset slightly by translational currency effects. But the group said the issues it has faced so far in its current financial year have continued to be an issue and said its underlying revenue growth, stripping out acquisitions and currency effects, will be around 1.0%.
Irish low-cost airline Ryanair Holdings said its customer traffic and load factor both improved in August. The company said it carried 10.4 million passengers in August, up 10% from the 9.4 million it carried a year earlier, while its load factor increased by 2 percentage points to 95% from 93%. On a rolling 12-month basis to August, traffic was up by 15% to 96.3 million customers.
In the economic calendar, there is the UK construction PMI at 0930 BST, before the eurozone producer price index at 1000 BST. US ADP employment is released at 1315 BST, while nonfarm productivity and unit labour costs are both released at 1330 BST. Later in the afternoon, US factory orders are at 1500 BST and Energy Information Administration crude oil stocks are at 1530 BST.
After the close of the London stock market, the changes of the September FTSE quarterly index review will be announced. Engineering company Weir Group is expected to drop into the FTSE 250, to be replaced by Berkeley Group Holdings.
By Neil Thakrar; [email protected]; @NeilThakrar1
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RYA.LTescoBerkeley GroupDiplomaWeir GroupASOSAshtead Group