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Alliance News


LONDON MARKET PRE-OPEN: Lower Open Seen As Google And Microsoft Miss

Fri, 22nd Apr 2016 07:31


LONDON (Alliance News) - Shares in London are set to open lower Friday, following stock-market losses in the US and Asia and earnings misses by two leading US tech firms, with Purchasing Manager's Index readings from the eurozone and the US likely to attract market attention.

IG says futures indicate the FTSE 100 index to open 17.44 points lower at 6,364.00. The index closed down 0.5%, or 28.82 points, at 6,381.44 on Thursday.

"While there's clearly some negativity coming from the US and Asian sessions overnight, driven primarily by some disappointing earnings from the former, I think there's probably also some profit taking going on, given the levels we're now back at," says Oanda analyst Craig Erlam.

Alphabet, the parent company of Google, on Thursday reported an increase in profit for the first quarter, driven mostly by increase in search and advertising revenues. But both earnings and revenues for the quarter fell shy of Wall Street analysts' estimates, sending shares of Alphabet down by 6.1% in the after-hours trading.

Meanwhile, technology giant Microsoft closed its fiscal third quarter with earnings of USD3.76 billion, a drop from USD4.98 billion for the same quarter a year before, the company said Thursday. The results, which fell short of analyst expectations, came despite progress toward Microsoft's restructuring goals, which hope to trade its PC business for profits from the cloud. This sent Microsoft shares down 5.1% in the after-hours trading.

Wall Street ended lower Thursday, with the Dow 30 index down 0.6%, the S&P 500 down 0.5% and the Nasdaq Composite down 0.1%.

In the economic calendar, France's Markit manufacturing, service and composite PMIs are due at 0800 BST, while the same from Germany and the eurozone are due at 0830 BST and 0900 BST, respectively. The Eurogroup meets in Amsterdam at 1000 BST.

Later in the day, US Markit manufacturing PMI is due at 1445 BST, while the Baker Hughes US oil rig count is due at 1800 BST.

Already released, the latest flash survey from Markit Economics showed that Japan's manufacturing activity deteriorated at the fastest pace in over three years in April. The Markit/Nikkei Manufacturing PMI fell to 48.0 in April from 49.1 in March. Economists expected a score of 49.6. A score below 50 indicates contraction, while any score above 50 suggests expansion in the sector.

The Japanese Nikkei 225 index ended up 1.2%. In China, the Shanghai Composite is flat, while the Hang Seng index in Hong Kong is down 0.7%.

Oil prices are higher again, having recovered some of their losses on Thursday, with Brent back above the USD45 line. The North Sea benchmark is quoted at USD45.14 a barrel Friday before the London equities open, flat against the USD45.13 at the close Thursday. Brent touched a low Thursday of USD44.43 a barrel.

FTSE 250-listed events company UBM said it has acquired US fashion trade shows producer Business Journals for USD69.0 million in cash. Business Journals serves the men's apparel and women's apparel and accessories markets, running the AccessoriesTheShow, EDIT, FAME, Moda, MRket and Stitch trade show brands.

UBM said Business Journals is "highly complementary" to its existing fashion trade show portfolio and will deliver synergies in areas such as event operations, property and cross-marketing opportunities.

Numis Securities said Acromas Bid Co has sold its entire 32% stake in Saga, which sells products such as insurance and holidays for people over 50 years old, through a placing to institutional investors.

Numis said the 352.7 million shares were placed at a price of 195.00 pence per share, giving the shareholding being sold a value of GBP687.7 million. The shares were placed at a discount to the closing price of the shares on Thursday, which was 201.40p. Following the placing, which is expected to be settled on April 26, Acromas will no longer hold any stake in FTSE 250-listed Saga.

Mid-cap defence contractor Ultra Electronics Holdings said its Sonar Systems unit has won a GBP9.5 million contract extension with the UK's Royal Navy.

Ultra said the contract will cover the supply of sonobuoys for the Royal Navy's Merlin Maritime Patrol Helicopter. The contract will be executed through 2017. Ultra said the deal will ensure the Royal Navy maintains a persistent anti-submarine warfare surveillance capability against hostile submarines.

Insurer Hiscox said it has appointed Hamayou Akbar Hussain as its chief financial officer. He will join the FTSE 250-listed group after seven years at blue-chip life insurer Prudential, most recently as its chief financial officer for Prudential UK & Europe. Hussain also sits on the board of Prudential Assurance Co, Prudential's main UK insurance operating company.

Blue-chip drugmaker AstraZeneca said it has created a genomics initiative with a group of research institutions in a bid to boost drug discovery and drug development across its MedImmune research and development business.

The initiative will include work with the Human Longevity Inc group in the US, the Wellcome Trust Sanger Institute in the UK and the Institute for Molecular Medicine in Finland. AstraZeneca also will create an in-house Centre for Genomics Research which will develop a bespoke database of genome samples donated by patients in clinical trials, along with clinical and drug response data.

By Daniel Ruiz; danielruiz@alliancenews.com

Copyright 2016 Alliance News Limited. All Rights Reserved.

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