(Alliance News) - The mood soured just before the European equities open on Thursday.
The Swedish Coast Guard found another leak in undersea gas pipelines running from Russia to Europe.
Stocks had initially been called higher on Thursday, with the Bank of England's bond market intervention lifting the mood.
The Nord Stream news put paid to hopes for a positive open in Europe, however.
"There are two leaks on the Swedish side and two leaks on the Danish side," a Swedish Coast Guard official said, after three leaks were confirmed earlier this week on the Nord Stream pipelines in the Baltic Sea.
Meanwhile, UK retailer Next lowered its guidance for annual sales and profit.
Here is what you need to know ahead of the London market open:
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MARKETS
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FTSE 100: called down 0.3% at 6,982.29
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Hang Seng: down 0.8% at 17,105.61
Nikkei 225: closed up 1.0% at 26,422.05
S&P/ASX 200: closed up 1.4%. at 6,555.00
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DJIA: closed up 548.75 points, or 1.9%, at 29,683.74
S&P 500: closed up 71.75 points, or 2.0%, at 3,719.04
Nasdaq Composite: closed up 222.13 points, or 2.1%, at 11,051.64
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EUR: up at USD0.9660 (USD0.9645)
GBP: firm at USD1.0772 (USD1.0763)
USD: up at JPY144.68 (JPY144.41)
GOLD: lower at USD1,644.93 per ounce (USD1,653.20)
OIL (Brent): flat at USD88.23 a barrel (USD88.17)
(changes since previous London equities close)
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ECONOMICS
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Thursday's key economic events still to come:
1000 BST eurozone economic sentiment indicator
1300 BST Germany consumer price index
1330 BST US gross domestic product
1330 BST US initial jobless claims
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Kemi Badenoch has used her first overseas visit as UK trade secretary to defend the government's economic strategies as "going for growth in a big way". There has been controversy since Chancellor Kwasi Kwarteng last week announced his mini-budget, which included plans to cut taxes to the benefit of the most wealthy. Badenoch told investors at the fifth annual Atlantic Future Forum hosted on the HMS Queen Elizabeth, moored in New York, the strategies were necessary due to a "global growth slow-down". The former Tory leadership candidate outlined a number of the government's strategies to the forum, where UK businesses across the defence and technology sector aimed to attract US investors.
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The number of cars built in the UK has increased for the fourth month in a row, new figures show. A total of 49,901 cars were built in August, up 34% compared with a year ago, the Society of Motor Manufacturers & Traders said. But the figure was well below August 2019's pre-pandemic level of 92,158 units, which the SMMT said underlined the scale of recovery still needed in the industry. Production of battery electric, plug-in hybrid and hybrid vehicles increased. Almost a third of all cars made in Britain in August were one of these models, with most exported to global markets.
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Price sensitivity is showing signs of returning to the UK housing market as house hunters' buying power takes a hit, according to a property website. Zoopla said 6% of homes listed for sale have seen the asking price adjusted downwards by 5% or more, marking the highest level since before the coronavirus pandemic. The website said that, given the economic backdrop and factors including rising energy prices and rising interest rates, this is a clear sign of a return to more of a buyers' market, after two years of a market that favoured sellers. The findings were released in a week when a slew of mortgage products have been pulled from the market and rates have been hiked, amid turmoil after the mini-budget last Friday.
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BROKER RATING CHANGES
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Oddo BHF raises GSK to 'outperform' ('neutral') - price target 1,700 (1,540) pence
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RBC cuts THG to 'sector perform' ('outperform') - price target 50 (215) pence
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RBC cuts boohoo price target to 35 (65) pence - 'sector perform'
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Goldman Sachs cuts boohoo price target to 65 (115) pence - 'buy'
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COMPANIES - FTSE 100
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Next lowered annual guidance as the clothing and homewares retailer believes tough trading in August and cost-of-living pressures will offset any boost from recent UK government stimulus measures. In the half-year ended July 30, revenue climbed 12% to GBP2.38 billion from GBP2.12 billion a year earlier. Pretax profit advanced 16% year-on-year to GBP400.6 million from GBP346.7 million. Full price sales advanced 12% year-on-year in the first half, though the company now expects a decline for the second half. Full price sales are to shrink by 1.5% year-on-year. It had previously guided for 1% growth. Next also lowered bottom-line guidance. It now expects annual pretax profit of GBP840 million, down from the previous GBP860 million guidance, but up 2.1% on last year. "August trade was below our expectations and cost of living pressures are set to rise in the coming months. Sales in September have improved, and we may see benefits from recent government measures," Next said, adding that the decision to lower full price sales guidance was a "very difficult call". Next, returning to a normal dividend cycle, declared a 66 pence per share interim payout. It expects to declare a final dividend "no lower than" the 127p it paid in August.
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Holiday Inn-owner InterContinental Hotels said it is carrying out extra "recovery and assurance plans" after its technology systems were hit by "unauthorised activity" earlier this month. "Following a period of disruption, by Wednesday 7 September IHG had re-activated its booking websites and mobile app together with most of its other booking channels and revenue-generating systems. Subsequently, service at our reservation and customer care call centres has been recovered and all our systems restored," the company explained. During the disruption, its hotel sites were able to to take booking directly. "We have continued to carry out additional steps as part of our recovery and assurance plans to review and further enhance our security measures. External specialists were engaged to investigate the incident, and no evidence of unauthorised access to systems storing guest data has been identified," IHG added.
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M&G has named Andrea Rossi as its new chief executive, effective October 10. He succeeds John Foley who steps down after seven years in the post. Foley's retirement from the role was announced in April. The wealth manager at the time said Foley would remain in the role until a replacement was found. Rossi was formerly CEO of AXA Investment Managers and spent six years on the executive committee of parent AXA SA. "Most recently, Andrea has been a senior adviser to Boston Consulting Group. He will step down from this role following his appointment at M&G," M&G added.
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COMPANIES - FTSE 250
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Mitchells & Butlers said fourth-quarter sales topped pre-virus levels, despite the pub and bar owner facing extreme hot weather in the UK and rail strikes. In the quarter ended September 24, total sales rose 1.5% from three years earlier, before the onset of the pandemic. "Like-for-like sales improved in the fourth quarter, despite the ongoing impact of extreme heat as well as further rail strikes, both of which disrupted trade. Sales over the August bank holiday were encouraging, with like-for-like growth over the three-day weekend of over 6%, before returning to levels consistent with the quarter as a whole," the company said. For the full-year, sales were up 1.1% on pre-virus levels. Mitchells & Butlers welcome UK energy price cap measures but warned it expects its total energy and utility costs to have risen to GBP150 million for the full year, up from the pre-pandemic comparative of GBP80 million. "Even with the cap in place anticipate a further increase on that for FY 2023," it warned.
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Synthomer cut yearly guidance as the Essex-based chemicals maker grapples with tough market conditions. It now expects its 2022 earnings before interest, tax, depreciation and amortisation to be 10% to 15% below previous expectations. "Since August, macroeconomic conditions have deteriorated, leading to reduced demand in construction and coatings end markets. This has impacted trading in Synthomer's European business," the company warned.
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OTHER COMPANIES
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Attraqt backed a GBP63.2 million takeover offer. Technology company Crownpeak will pay 30p per share in the London-based provider of online search, merchandising and personalisation solutions for e-commerce. This represents a 70% premium to Attraqt's 17.50p closing price on Wednesday. The bid values Attraqt's equity at GBP63.2 million. Crownpeak has so far received acceptances representing 42% of Attraqt shareholders. Attraqt also reported interim results. In the first half of 2022, revenue climbed 9.4% annually to GBP12.2 million from GBP11.1 million. Its pretax loss, however, widened to GBP2.2 million from GBP1.8 million.
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Avon Protection said it has received a first delivery order from the US Army for a "next generation" helmet. The order is worth USD42.1 million. "Manufacturing ramp-up is progressing to plan after completing rigorous testing, with initial deliveries commencing in the first half of FY23 positioning Avon Protection as the leading helmet supplier to the US [Department of Defense]," the company said.
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By Eric Cunha; ericcunha@alliancenews.com
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