Last checked at 
(Alliance News) - Stocks in London are set to end a difficult week on a downbeat note after economic data raised the prospect of the Federal Reserve acting even more aggressively to tame inflation.
In early UK company news, there was a raft of positive product news from pharmaceutical firm AstraZeneca. Outsourcer Capita unveiled a contract extension and a disposal, and there was another curious update from online wines retailer Naked Wines.
"Improvements in US weekly jobless claims data, along with this week's hotter-than-expected core inflation numbers appear to be prompting investors to hedge their bets over the prospect that the Federal Reserve might be tempted to raise rates next week by 100 [basis points]," said Michael Hewson, chief markets analyst at CMC Markets.
"Concerns about a global recession are also growing, manifesting themselves by way of weakness in commodity prices, crude oil prices slumping by over 3% yesterday, while natural gas prices on both sides of the Atlantic also plunged sharply."
Oil prices were recovering a touch on Friday, but Brent crude remained well below the high of the week in excess of USD95 a barrel.
The World Bank warned Thursday that the threat of a global recession is growing as central banks rightly focus on bringing down soaring inflation rates. The worst-case scenario described in the paper Thursday would entail a recession in advanced economies, and sharp declines in growth in emerging and developing economies.
Likely to compound recession fears was some dire UK retail sales data. Retail sales fell far more than expected in August as the cost-of-living crisis heaped pressure on consumers.
"With a difficult winter to come, it will come as a worry to retailers that shoppers have already reigned in their spending despite the hot summer," said Lynda Petherick, retail lead at Accenture in the UK & Ireland.
The pound has now fallen over 2.5% from its high of the week of USD1.1739.
Data out of China on Friday was more encouraging.
The National Bureau of Statistics said retail sales in China increased 5.4% annually in August, beating an FXStreet cited forecast of a 3.5% climb. Retail sales growth quickened from a 2.7% rise in July.
China's industrial output improved 4.2% year-on-year in August, topping a market forecast of 3.8% growth, according to FXStreet. Industrial production had risen 3.8% yearly in July.
Instead of reacting positively to the data, Asian stocks were following a shaky handover from New York.
Here is what you need to know ahead of the London market open:
----------
MARKETS
----------
FTSE 100: called down 36.97 points, or 0.5% at 7,245.10
----------
Hang Seng: down 0.6% at 18,811.72
Nikkei 225: closed down 1.1% at 27,567.65
S&P/ASX 200: closed down 1.4% at 6,747.00
----------
DJIA: closed down 173.27 points, or 0.6%, at 30,961.82
S&P 500: closed down 44.66 points, or 1.1%, at 3,901.35
Nasdaq Composite: closed down 167.32 points, or 1.4%, at 11,552.36
----------
EUR: down at USD0.9992 (USD0.9996)
GBP: down at USD1.1434 (USD1.1494)
USD: up at JPY143.50 (JPY143.36)
Gold: down at USD1,662.95 per ounce (USD1,667.03)
Oil (Brent): up at USD91.40 a barrel (USD90.04)
(changes since previous London equities close)
----------
ECONOMICS
----------
Friday's key economic events still to come:
11:00 CEST EU consumer price index
10:00 EDT US University of Michigan survey of consumers
----------
UK retail sales slumped in August amid cost-of-living pressures on consumers, figures from the Office for National Statistics showed. Retail sales fell 1.6% month-on-month, far worse than the forecast 0.5% decline, according to FXStreet-cited consensus. This reversed a 0.4% rise in July. The ONS said August's data continued "a downward trend since summer 2021 following the lifting of restrictions on hospitality; in recent months, rising prices and cost of living are also affecting sales volumes." All main sectors - food, non-food, non-store retailing and food - fell over the month, something which has not happened since July 2021, when all Covid restrictions on hospitality were lifted. Annually, UK retail sales slumped 5.4% in August, deepening July's 3.2% decline.
----------
Berlin said it has taken control of the German operations of Russia firm Rosneft, which runs several refineries, to secure energy supplies which have been disrupted after Moscow invaded Ukraine. Rosneft's German subsidiaries, which account for about 12% of oil refining capacity in the country, were placed under trusteeship of the Federal Network Agency, the economy ministry said in a statement.
----------
BROKER RATING CHANGES
----------
JPMorgan cuts Royal Mail to 'neutral' (overweight) - price target 270 (360) pence
----------
Goldman Sachs cuts Land Securities to 'sell' (neutral) - price target 500 (650) pence
----------
Berenberg cuts Fevertree Drinks to 'hold' (buy) - price target 1,000 (1,100) pence
----------
COMPANIES - FTSE 100
----------
Pharmaceutical firm AstraZeneca said its Evusheld Covid-19 antibody treatment has been recommended for marketing authorisation in the EU for adults with the virus at risk of progressing to severe disease. "AstraZeneca anticipates that the European Commission will shortly complete its review of the CHMP positive opinion to determine whether to grant marketing authorisation for treatment of COVID-19 in appropriate populations," it said. Evusheld was granted marketing authorisation in the EU for the prevention of Covid-19 earlier this year.
----------
Separately, AstraZeneca said Beyfortus, which is being developed with Sanofi, has also been recommended for marketing authorisation in the EU, for the prevention of respiratory syncytial virus lower respiratory tract disease in newborns and infants during their first RSV season. "If approved, Beyfortus would be the first and only single-dose passive immunisation for the broad infant population, including those born healthy, at term or preterm, or with specific health conditions," the company said.
----------
Finally, AstraZeneca said its phase three trial of Danicopan met its primary endpoint in blood disorder paroxysmal nocturnal haemoglobinuria. "Danicopan plus Ultomiris or Soliris demonstrated superiority compared to placebo plus Ultomiris or Soliris for this specific patient population, with statistically significant and clinically meaningful improvements in haemoglobin levels, transfusion avoidance and FACIT Fatigue scores from baseline," AstraZeneca said.
----------
OTHER COMPANIES
----------
Naked Wines said Rowan Gormley, its founder, former chief executive and material shareholder, has been appointed as an advisor to the board, as it finalises revised operational and financial plans. Gormley owns a 2.9% stake in the online wine retailer. The position of board adviser is unpaid, it said, and is expected to last for two to three months. "We wanted shareholder involvement in our ongoing operational and financial planning process. I welcome Rowan providing his insight to us because his operational familiarity with the business and his viewpoint as a shareholder will provide a unique and valuable perspective to the board as we position Naked for long-term sustainable growth," said Chair Darryl Rawlings. Earlier this week, Naked Wines said it was mulling plans to improve profit and keep a lid on costs.
----------
Outsourcer Capita reported a contract extension and a disposal. Capita has secured an extension worth GBP42.7 million to its contract with Barnet Council. It could be worth up to GBP57 million with indexation and potential additional work, it added. Separately, Capita said it has agreed to sell payments business Pay360 to Access PaySuite, a division of Access Group, in a GBP150 million deal. "The sale will help reduce indebtedness and provide additional liquidity, which together shall further strengthen Capita's balance sheet, whilst also allowing Capita to enhance its digital offerings for clients," the company said.
----------
By Lucy Heming; lucyheming@alliancenews.com
Copyright 2022 Alliance News Limited. All Rights Reserved.
