Last checked at 
(Alliance News) - Stocks in London were set to open lower on Thursday, and the dollar was on the rise, as markets digested hawkish rhetoric from central bank chiefs.
"The major central bankers' speeches were the same background music. The Federal Reserve's [Jerome] Powell, the Bank of England's [Andrew] Bailey, and the European Central Bank's [Christine] Lagarde agreed that their fight against inflation wasn't done yet, and that more rate hikes are in the pipeline," said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
The central bankers were talking on a panel at an event organised by the European Central Bank in Sintra, Portugal.
All major banks in the US have passed the Fed's annual stress test, designed to assess how well they would fare in a major financial crisis.
The Fed said on Wednesday that all 23 banks tested "are well positioned to weather a severe recession and continue to lend to households and businesses even during a severe recession".
The latest test results follow widespread banking-sector turbulence in the US and Europe earlier this year, sparked by the rapid collapse of Californian regional lender Silicon Valley Bank.
In early UK corporate news, store chain B&M European Value Retail and outsourcer Serco both reported strong starts to their respective financial years, while card and gift seller Moonpig reported a drop in annual profit amid a "challenging" backdrop.
Here is what you need to know at the London market open:
----------
MARKETS
----------
FTSE 100: called down 4.79 points, or 0.1%, at 7,495.70
----------
Hang Seng: down 1.5% at 18,891.81
Nikkei 225: closed up 0.1% at 33,234.14
S&P/ASX 200: closed flat at 7,194.90
----------
DJIA: closed down 74.08 points, 0.2%, at 33,852.66
S&P 500: closed down just 1.55 points at 4,377.86
Nasdaq Composite: closed up 0.3% at 13,591.75
----------
EUR: lower at USD1.0891 (USD1.0916)
GBP: lower at USD1.2620 (USD1.2741)
USD: higher at JPY144.66 (JPY144.22)
Gold: lower at USD1,903.31 per ounce (USD1,910.97)
(Brent): lower at USD73.83 a barrel (USD74.05)
(changes since previous London equities close)
----------
ECONOMICS
----------
Thursday's key economic events still to come:
11:00 CEST EU economic sentiment indicator
14:00 CEST Germany consumer price index
00:01 BST UK CBI growth indicator survey
17:30 BST UK BoE MPC Member Silvana Tenreyro valedictory speech
08:30 EDT US gross domestic product
08:30 EDT US unemployment insurance weekly claims report
----------
The domestic growth of the Irish economy remains "quite strong", according to the Economic & Social Research Institute think tank. ESRI's latest quarterly economic commentary says continued economic growth is expected in 2023 and 2024, and there will be "a significant moderation" in the inflation rate as price pressures begin to ease, particularly in the energy market. It forecasts that modified domestic demand, a way of measuring Ireland's domestic economic activity, will grow by 3.6% this year and 4% in 2024. With the unemployment rate at a low of 3.8% as of May, it said it expects it to average at below 4% both this year and next.
----------
BROKER RATING CHANGES
----------
Exane BNP cuts Ashtead to 'neutral' (outperform) - price target 5,550 (6,250) pence
----------
Jefferies raises GB Group to 'buy' (hold) - price target 285 pence
----------
Barclays raises Whitbread price target to 4,350 (4,000) pence - 'overweight'
----------
COMPANIES - FTSE 100
----------
Retailer B&M European Value Retail reported strong and profitable trading across all three divisions in the thirteen weeks to June 24. Revenue in the first quarter grew 14% to GBP1.32 billion from GBP1.16 billion a year prior. "Our strong trading momentum demonstrates the strength of our unchanged strategy to relentlessly focus on price, product and excellence in retail standards. The business is well positioned as we start to transition to our autumn winter season," said Chief Executive Alex Russo.
----------
Investment manager 3i Group said Netherlands-based non-food discounter Action has continued to deliver very strong sales growth in the year-to-date, with like-for-like sales growth of 22%. "Action's strategy to deliver an outstanding quality customer offering at the lowest price remains the company's top priority and continues to draw high customer footfall across all of its geographies. Action is set for another good quarter of profit growth and has a cash balance in excess of EUR660 million," the company said. 3i said the remainder of its private equity portfolio continues to demonstrate "resilience" with the majority trading well, though it noted lower customer demand and inflation pressures have impacted a "small" proportion of the portfolio.
----------
COMPANIES - FTSE 250
----------
Serco said it has seen a strong start to 2023, with robust demand for immigration services, and growth in defence services. The outsourcer reported revenue of GBP2.5 billion in the first half of the year, up 13% from GBP2.2 billion a year prior. As a result, Serco increased its full-year revenue guidance by 4% to at least GBP4.8 billion. This would be around 6% higher than the GBP4.5 billion reported in 2022. It said it expects underlying trading profit in the half-year to increase 8% to at least GBP140 million. For the full-year, Serco increased its underlying trading profit guidance by 4% to GBP245 million. This would be 3% higher than the GBP237 million achieved in 2022.
----------
Direct Line noted recent press coverage regarding its business review of motor total loss claims, which the company is undertaking. The review covers claims settled between September 1, 2017 and August 17, 2022. The insurer said it does not expect the review to have a material financial impact in 2023. It added that an estimate of potential payments the company will make as a result of the review was provided for within its 2022 financial year-end claims reserves.
----------
OTHER COMPANIES
----------
UK government ministers have looked to allay fears around the impact of Thames Water potentially going under as the regulator vowed to work with the sector to deal with its debt levels. Work & Pensions Secretary Mel Stride said there were "contingency plans in place for any eventuality" as Thames Water battles to finance the GBP14 billion of debt on its books following interest rate rises. It comes as several reports suggested concerns about Thames Water's finances had now broadened to other firms in the industry. The Times cited a Whitehall source as saying: "A lot of these companies are highly geared and struggling. There is a worst case scenario where other companies end up in the same place as Thames Water."
----------
Online greeting cards and gifting company Moonpig reported a double-digit percentage drop in profit in the year ended April 30 amid a "challenging" economic context from October onwards. The company reported a pretax profit of GBP34.9 million, down 13% from GBP40.0 million the year prior. It noted higher finance charges had hurt profit in the year. Revenue, meanwhile, climbed 5.2% to GBP320.1 million from GBP304.3 million. Moonpig said trading since the start of its new financial year has been in-line with its expectations. It said, given the context of the current macroeconomic environment, it expects revenue to grow at a low-single-digit percentage rate in the first half. For the full-year, it expects revenue growth at a mid- to high-single-digit percentage rate. Adjusted earnings before interest, tax, depreciation and amortisation in the full-year are expected to remain "resilient", it added.
----------
Hotel and resort operator PPHE Hotel said the strong trading conditions seen in the first quarter of the year has been maintained through the second and into the third across all its main markets. As a result, it is now expected that interim revenue will be in excess of GBP177 million, above pre-Covid levels of GBP155 million in the first half of 2019. Revenue per available room is expected to be around GBP109, up from GBP93 pre-Covid. PPHE said that forward booking momentum remains "encouraging" as it enters its strongest trading period. It said it expects to report revenue of at least GBP400 million in 2023 and earnings before interest, tax, depreciation and amortisation of GBP120 million. This is ahead of analyst consensus which sees revenue in a range of GBP352.0 million to GBP370.0 million, and Ebitda in a range of GBP106.3 million and GBP111.0 million.
----------
By Heather Rydings, Alliance News senior economics reporter
Comments and questions to newsroom@alliancenews.com
Copyright 2023 Alliance News Ltd. All Rights Reserved.
