LONDON (Alliance News) - UK shares have opened mostly lower, with small-caps slightly outperforming Wednesday ahead of the Queen's Speech and further European economic data.
Starting the trading day on a negative note, Tesco PLC reported a sharp drop in sales in the first quarter of its new financial year, as Britain's biggest supermarket chain said it was hit hard by deep price cuts across the business and by the acceleration of its store refit programme.
Tesco again reported disappointing sales figures, posting a 3.3% like-for-like decline in sales including petrol for the quarter ended May 24, and a 3.2% fall excluding petrol. It was hardest hit in the UK, where like-for-like sales in the business were down 3.8% including petrol, and 3.7% excluding petrol.
On a more positive note, Ryanair reported a rise in May traffic and load factor.
Here is what you need to know at the UK market open:
----------
MARKETS
----------
FTSE 100: down 0.1% at 6,827.66
FTSE 250: down 0.1% at 15,957.38
AIM ALL-SHARE: up 0.2% at 809.43
----------
Hang Seng: down 0.7% at 23,133.88
Nikkei 225: closed up 0.2% at 15,067.96
DJIA: closed down 0.1% at 16,722.34
S&P 500: closed down 0.04% at 1,924.24
----------
GBP-USD: down at USD1.6712
EUR-USD: down at USD1.3610
GOLD: up at USD1,245.85 per ounce
OIL (Brent): up at USD108.90 a barrel
(changes since end of previous GMT day)
----------
ECONOMICS AND GENERAL
----------
Wednesday's Key Economic Events still to come
(all times British Summer Time)
All Day G7 Meeting
08:55 Germany Markit Services PMI
09:00 EU Markit Services and Composite PMI
09:30 UK Markit Services PMI
10:00 EU Gross Domestic Product
10:00 EU Producer Price Index
11:40 UK Queen's Speech
12:00 US MBA Mortgage Applications
13:15 US ADP Employment Change
13:30 US Nonfarm Productivity and Unit Labor Costs
13:30 US Trade Balance
13:30 Canada Trade Balance
14:00 Canada Bank of Canada Interest Rate Decision
14:45 US Markit Services PMI
15:00 US ISM Non-Manufacturing PMI
15:30 US EIA Crude Oil Stocks change
19:00 US Fed's Beige Book
----------
Pensions reform will be at the centre of the Queen's Speech, scheduled for 1140 BST Wednesday, as the UK government outlines new laws for the final year before the next general election, Sky News reported. Changes to abolish the effective requirement for individuals to buy annuities - products providing a guaranteed income in retirement - with their pension pots will be formalised, while legislation is also expected on collective workplace pension schemes.
----------
Shop prices in the UK were down 1.4% on year in May, the British Retail Consortium said. That was unchanged from the previous month's reading, although it missed forecasts for a decline of 1.3%.
Food prices were unchanged at 0.7%, the data showed, while non-food prices tumbled an annual 2.8%.
----------
China's non-manufacturing sector expanded at the fastest pace so far this year in May, mirroring robust new orders and improvement in the employment situation. The non-manufacturing Purchasing Managers' Index, or PMI, climbed to 55.5 in May from 54.8 in April, survey results from the National Bureau of Statistics and the China Federation of Logistics and Purchasing showed. The official PMI for manufacturing also picked up in May, on foreign demand and infrastructure investment, data published over the weekend revealed. The index rose to a 5-month high of 50.8 in May. Meanwhile, the private Markit/HSBC manufacturing PMI reading was below 50 in May.
----------
Japanese service sector activity declined at a slower rate in May, reflecting the recent hike in sales tax, a survey by Markit Economics showed. The services business activity index came in at 49.3 in May, falling below the no-change mark of 50, following an index of 46.4 in April. This marked the second consecutive month of decline although the recent decline was slower.
----------
RUSSIA MAY SERVICES PMI 46.1 VS. 46.8 IN APRIL, CONSENSUS 47.0
----------
President Barack Obama promised Tuesday to step up the US military presence in Europe in response to the ongoing crisis in Ukraine, while NATO defence ministers agreed to measures aimed at reassuring allies over the perceived threat from Russia. "We'll increase the number of American personnel - army and air force units - continuously rotating through allied countries in Central and Eastern Europe," Obama said after talks with Polish President Bronislaw Komorowski in Warsaw. Obama will ask Congress to approve up to 1 billion dollars to support the effort, which he called "a powerful demonstration of America's unshakeable commitment to our NATO allies."
----------
Beijing should be less repressive of political dissent, Taiwan's President Ma Ying-jeou said Wednesday, on the 25th anniversary of the Tiananmen Square crackdown of June 3-4, 1989. "We people living in Taiwan believe that a well-designed democratic and legitimate system can effectively solve social conflicts," Ma said. He said that since Taiwan lifted martial law in 1987, dissenting opinions have been tolerated, and the territory has learned that only robust democracy and legitimate government can address the people's concerns.
----------
South Koreans headed to the polls Wednesday in the first nationwide vote since public anger erupted over the Sewol ferry disaster in April. Leaders of the ruling conservative Saenuri Party have called for voters to give it another chance in the local and municipal elections, after confidence in President Park Geun Hye's administration plummeted due to the fatal ferry accident. Saenuri campaigned on a promise to fix social problems that it said were revealed through the ferry tragedy, South Korea's Yonhap News Agency reported. The largest opposition party, New Politics Alliance for Democracy, called for voters to make a judgement on the government, saying it had failed to protect South Korean lives.
----------
Former army chief Abdel Fattah al-Sissi was officially declared Egypt's new president on Tuesday after the electoral commission confirmed that he secured almost 97% of the vote in last week's elections. Turnout reached 47.45% of Egypt's 54 million registered voters, the commission said. There were some doubts over the accuracy of the figure due to the slow voting process observed during the three-day election.
----------
Syrian President Bashar al-Assad was expected to easily win a third seven-year term in Tuesday's election, even as opposition groups and the international community decried the electoral process.
Polling was limited to government-controlled areas. Large parts of the country remained off limits to state officials after more than three years of civil war that have left more than 162,000 people dead. The election was denounced by the Syrian opposition and its Western supporters. The poll was the first to see al-Assad face rival candidates. But the two low-profile figures running against him were not expected to make any impact.
----------
Israel suffered an embarrassing blow Tuesday when both the US and the EU rejected its call to boycott the new Palestinian unity government. Palestinian Prime Minister Rami Hamdallah, convening his first cabinet session in Ramallah, welcomed the decision by Arab countries, the US and EU to cooperate with his government "politically and financially." Hamdallah met with John Rutter, EU representative to Palestine, and promised to abide by all international agreements, moderate Palestinian President Mahmoud Abbas' political programme and pursue peaceful means to achieve Palestinian statehood.
----------
BROKER RATING CHANGES
---------
HSBC CUTS BARCLAYS TO 'NEUTRAL' ('OVERWEIGHT') - PRICE TARGET 270 (285) PENCE
----------
CITIGROUP RAISES BHP BILLITON TO 'FOCUS LIST EUROPE' - 'BUY'. PRICE TARGET 2100 PENCE
----------
TRADERS: MORGAN STANLEY CUTS SABMILLER TO 'EQUAL-WEIGHT' ('OVERWEIGHT')
----------
TRADERS: CREDIT SUISSE CUTS ELECTROCOMPONENTS TO 'UNDERPERFORM'
----------
HSBC RAISES FLYBE GROUP PRICE TARGET TO 175 (135) PENCE - 'OVERWEIGHT'
----------
JPM RAISES POUNDLAND TO 'OVERWEIGHT' ('NEUTRAL') - TARGET 377,15 (377,40) PENCE
----------
COMPANIES - FTSE 100
----------
Tesco Q1 UK Like-For-Likes Sales Including VAT, Excluding Petrol Down 3.7%; Group Sales Down 0.9% At Constant Rates, Excluding Petrol; Group Like-For-Like Sales Including Petrol Down 3.3%, Exc. Petrol Down 3.2%; UK Like-For-Like Sales Including Petrol Down 3.8%, Exc. Petrol Down 3.7%; International Like-For-Like Sales Including Petrol And Excluding Down 2.2%; Trading Conditions To Remain Challenging For UK Grocery Market; CEO: More Competitive Than We Have Been For Years
----------
COMPANIES - FTSE 250
----------
Synergy Health PLC raised its total dividend and expressed confidence in its strategy to speed up earnings growth, as it saw pretax profit rise in the year ended March 30. The company, which provides outsourced support services to the healthcare market, proposed a total dividend for the year of 22.77 pence, up from 20.70 pence in the previous year. Synergy Health posted a pretax profit of GBP42.9 million, up from GBP38.0 million, as revenue rose to GBP380.5 million from GBP361.2 million, driven by new contract wins. New contracts added GBP500 million to the company's forward order book, which now stands GBP1.5 billion when including contracts at the preferred bidder stage, Synergy said.
----------
Ophir Energy PLC Wednesday reported successful results from its Taachui-1 and subsequent Taachui-1 ST1 wells in Block 1 in Tanzania, resulting in a new gas discovery with a net pay of 155 metres. The upstream oil and gas exploration company said that the Taachui-1 well was drilled by the Deepsea Metro I drillship close to the western boundary of Block 1. Estimates for the mean recoverable resource from the discovery are around 1.0 trillion cubic feet, "The size of the gas column is such that the discovery could extend into a second compartment to the west which has the potential to be of a similar size," Ophir said.
----------
Spectris Agrees To Acquire MicroCal Business From GE Healthcare Life Sciences
----------
RPC FY Pretax Profit Of GBP59.0M Vs GBP48.2M; Revenues Of GBP1.05Bn Vs GBP982M; Full Year Dividend Per Share Up 4% To 15.5P Vs 14.9P; New Financial Year Started In Line With Management Expectations
----------
Workspace Group FY Pretax Profit Up 230% To GBP252.5M Vs GBP76.4M; Dividend Per Share Up 10% To 10.63P Vs 9.67P; Like-For-Like Rent Roll Up 8.5% To GBP47.4M Vs GBP43.7M; Like-For-Like Occupancy Steady At 90.0% Vs 89.9%
----------
Premier Oil Says Singa Laut-1 Well In Indonesia Finds 177 Feet Of Net Gas-Bearing Reservoir Quality Sands; Says Singa Laut-1 Well Will Now Be Plugged And Abandoned As Successful Exploration Well; Says Ratu Gahah-1 Well Has Reached Lama Section With Gas Shows, But Sandstone Quality Low; Says Has Signed Rig Contract For Falkland Islands Campaign To Start Q2 2015; Rig Sharing Contract Is With Falkland Oil And Gas Partner Noble Energy Falklands; Rockhopper Exploration Also Involved
----------
COMPANIES - ALL-SHARE AND AIM
----------
PuriCore Sells Endoscopy Business For USD26.9M Gross In Cash To Medivators BV, Part Of Cantel Medical Corp; Says Conducting Strategic Review To Decide Use Of USD25.3M Net Proceeds Of Sale
----------
Findel FY Pretax Profit GBP3.3M Vs GBP0.5M; Revenue GBP514.7M Vs GBP491.2M; Trading Driven By Largest Businesses - Express Gifts, Findel Education; Trading So Far In Current Financial Year In Line With Expectations
----------
Rare Earth Minerals: Mineral Resource For Sonora Lithium Project, Northern Mexico Has Increased 37%;Mineral Resource Now 3.28M Tonnes Of Lithium Carbonate Equivalent; Sonora Lithium Upgraded From Inferred To Indicated Category
----------
Alternative Networks H1 Pretax Profit GBP4.6M Vs GBP5.5M; Revenue GBP63.0M Vs GBP55.3M; Interim Dividend 4.9p Vs 4.4p; On Track To Meet Full-Year Expectations
----------
Standard Life Investments Property Income Sells Largest Asset For GBP16M
----------
OMG H1 Pretax Loss GBP2.1M Vs Pretax Loss GBP736,000; Revenue GBP14.3M Vs GBP13.0M; Trading In Line To Meet Expectations For FY
----------
Akers Biosciences Signs US Distribution Agreement With Typenex Medical For PIFA Heparin Tests
----------
API Group FY Pretax Profit Flat At GBP5.6M; Revenue Up 2.0% At GBP114.7M From GBP112.4M;
Final Dividend 1.3p, Making 2.0p Full Year, Versus No Dividend Prior; Dividend Payment Is First In More Than 10 Years; Reports Net Cash Of GBP0.2M At Year End, Vs GBP2.6M Net Debt Year Before; First Time In 15 Years
----------
Herencia Resources Says Copper Mineralisation Confirmed Across All Zones Drilled In Chile
----------
Canaccord Genuity FY Net Income CAD52.1M Vs CAD18.8M Net Loss; Revenue CAD855.2M Vs CAD797.1M
----------
Ryanair May Traffic Up 4% To 8.2M Customers; Load Factor Up 3% To 85%; Says Annual Traffic Up 3% To 82.3M Customers
----------
Bellzone Raises GBP1.1M Via Placing Of 51.3M New Shares At 2.5p With China Sonangol
----------
Wednesday's Scheduled AGMs/EGMs
Afren
Amara Mining
JKX Oil & Gas
Mears Group
Cayenne Trust
WANdisco
----------
By Tom Waite; thomaslwaite@alliancenews.com; @thomaslwaite
Copyright 2014 Alliance News Limited. All Rights Reserved.
