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(Alliance News) - Stocks in London are called higher on Wednesday, with the main focal point for the day being the upcoming US interest rate decision.
The US Federal Reserve is widely anticipated to leave interest rates where they are at its November meeting, and will be hoping that the recent rise in bond yields will help to do some of the heavy lifting. The decision will be announced at 1800 GMT, with a press conference with Chair Jerome Powell to follow shortly afterwards.
"The chances are that we won't hear anything soothingly dovish. 'The higher yields help us do the job' is the best it will get," said Swissquote Bank's Ipek Ozkardeskaya.
In early economic news, UK house prices saw a monthly rise of nearly 1.0% in October, and the annual pace of decline softened.
In early UK company news, GSK upgraded annual guidance after reporting double-digit growth for its third quarter. Next also increased its annual profit guidance slightly, after full prices sales came in higher than expected in the third quarter. Meanwhile, Aston Martin Lagonda Global trimmed its annual wholesale volumes guidance, as it grew revenue and narrowed its quarterly loss.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: called up 39.3 points, 0.5%, at 7,361.02
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Hang Seng: down 0.1% at 17,099.04
Nikkei 225: closed up 2.4% at 31,601.65
S&P/ASX 200: closed up 0.9% at 6,838.30
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DJIA: closed up 123.91 points, 0.4%, at 33,052.87
S&P 500: closed up 0.7% at 4,193.80
Nasdaq Composite: closed up 0.5% at 12,851.24
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EUR: up at USD1.0576 (USD1.0562)
GBP: up at USD1.2147 (USD1.2128)
USD: down at JPY151.26 (JPY151.63)
Gold: down at USD1,979.93 per ounce (USD1,989.19)
OIL (Brent): down at USD85.28 a barrel (USD86.09)
(changes since previous London equities close)
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ECONOMICS
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Wednesday's key economic events still to come:
09:30 GMT UK manufacturing PMI
09:30 GMT UK narrow money
07:00 EDT US MBA weekly mortgage applications survey
08:15 EDT US ADP national employment report
09:45 EDT US manufacturing PMI
10:00 EDT US labor turnover survey
10:00 EDT US ISM manufacturing PMI
14:00 EDT US interest rate decision
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The annual pace of decline in UK house prices eased somewhat in October, according to Nationwide data, as prices rose on a monthly basis. On a seasonally-adjusted basis, UK house prices rose 0.9% in October from September, compared to the 0.1% rise in September from August. On an annual basis, prices were 3.3% lower in October, slowing from the 5.3% decline seen in September. The average house price, without seasonal adjustment, was GBP259,423 in October, up from GBP257,808 in September.
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Representatives of countries from across the world are set to attend Rishi Sunak's summit aimed at laying the groundwork for the safe use of artificial intelligence. The AI safety summit will take place on Wednesday and Thursday, with representatives from the USA, France, Germany, Italy, Japan, Singapore and China confirmed as attending. Neither US President Joe Biden nor French President Emmanuel Macron will be at the summit, but Downing Street has denied the gathering is being snubbed by world leaders. Vice President Kamala Harris will represent the US at the summit in place of Biden, and EU commission chief Ursula von der Leyen will speak on behalf of the bloc. Elon Musk, the Tesla Inc CEO and owner of the social media site X, will also attend and join the prime minister for a live interview after the summit closes on Thursday.
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BROKER RATING CHANGES
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JPMorgan cuts BP to 'underweight' (neutral) - price target 550 (615) pence
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Goldman Sachs cuts Segro to 'sell' - price target 580 pence
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Berenberg cuts Mobico Group price target to 100 (140) pence - 'buy'
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COMPANIES - FTSE 100
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GSK upgraded its annual guidance, after a strong third quarter. For 2023, the pharmaceutical firm now expects turnover to grow between 12% and 13%, compared to a prior range of 8% to 10%. Adjusted operating profit is now forecast to rise between 13% and 15%, compared to 11% to 13% before. In the third quarter, turnover rose to GBP8.15 billion from GBP7.83 billion a year before. Pretax profit was GBP1.79 billion, rising sharply from GBP1.01 billion. It declared a third-quarter dividend of 14 pence, and expects 56.5p for the whole year. "Competitive performance was broadly based but benefitted particularly from the outstanding US launch of Arexvy, the world's first RSV vaccine," said CEO Emma Walmsley.
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Next upped its annual pretax profit guidance by GBP10 million to GBP885 million, as full price sales in the third quarter came in ahead of guidance. The retailer said full price sales in the period from August to October grew 4.0% annually, ahead of guidance of 2.0%. For the financial year as a whole, it expects full price sales to grow 3.1% to GBP4.74 billion, assuming they see 2.0% growth in the remainder of the year. However, it noted sales growth has been variable in recent months, which it attributes to changing weather conditions as opposed to underlying changes in the consumer economy.
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COMPANIES - FTSE 250
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Aston Martin Lagonda Global said third-quarter revenue rose 15% to GBP362.1 million year-on-year from GBP315.5 million, and pretax loss narrowed to GBP117.6 million from GBP225.9 million. Its performance was in line with guidance, the luxury sports car manufacturer said, and shows "continued momentum". It left most of its guidance for 2023 unchanged, but trimmed wholesales volumes guidance to around 6,700 units from previous guidance of around 7,000 units.
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OTHER COMPANIES
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Toyota ramped up its annual net profit forecast to USD26.1 billion after reporting it more than doubled in the first six months of the year. The world's biggest automaker by sales said a weaker yen and cost-cutting efforts meant it now expects annual net profit of JPY3.95 trillion, from a previous estimate of JPY2.58 trillion. For the six months to September, Toyota said net profit more than doubled to JPY2.59 trillion on sales of JPY21.98 trillion, which were up almost a quarter on the previous year. Toyota is having a roaring year, thanks to strong demand for its products especially in Japan, North America and Europe. Ahead of the earnings announcement, Toyota said that it saw record global production of 5.058 million units during the first half, when global sales reached 5.172 million vehicles.
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By Elizabeth Winter, Alliance News senior markets reporter
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