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(Alliance News) - Stock prices in London are seen opening lower on Thursday after Federal Reserve Chair Jerome Powell admitted the US economy could tip into recession following aggressive interest rate hikes.
In early company news, online and high-street gambling operator 888 Holdings said trading was in line with expectations. Online fashion retailer boohoo hired its new finance head from online ticketing platform Trainline. Residential landlord Grainger made an acquisition.
IG futures indicate the FTSE 100 index will open 14.52 points lower at 7,074.70. The large-cap index closed down 62.83 points, or 0.9%, at 7,089.22 Wednesday.
888 Holdings expects to report revenue of between GBP330 to GBP335 million for the six months to June 30. The FTSE 250 listing said the result is "broadly in line with board expectations", with growth in some European markets offset by the effects of additional safer-gambling measures as well as the temporary exit from the Netherlands.
In addition, 888 said William Hill revenue for the 26 weeks to June 28 is currently expected to be between GBP620 to GBP630 million. This performance reflects the re-opening of high-street retail operations, offset by the impact of increased safer gambling measures in UK Online. It expects to complete the deal for William Hill's UK assets on July 1, it added.
Grainger said it has agreed to forward fund and buy the build-to-rent element of a Bristol development that is made up of 374 private rental homes, as well as 94 affordable homes and six commercial units.
Grainger said it has agreed to acquire the scheme from Redcliff MCC, backed by ICG Real Estate in partnership with Madison Cairn for GBP128 million.
The residential landlord said Winvic Construction has been appointed as contractor for the scheme. Winvic built Grainger's Brook Place development in Sheffield and is also delivering the Copper Works in Cardiff for Grainger.
Grainger said construction is expected to commence in the third quarter, with practical completion of the final element targeted for early 2025. It expects that the scheme, including the commercial element, will generate a gross yield on cost of 6% once fully let and stabilised.
"We are very pleased to acquire our third build-to-rent scheme in Bristol which will further strengthen our city cluster, bringing our total investment in the city to nearly 900 homes when complete and driving operational efficiencies, whilst also enabling us to deliver 94 new affordable homes via Grainger Trust, our in-house affordable housing arm," said Chief Executive Officer Helen Grainger.
boohoo said it has hired Shaun McCabe as its new chief financial officer to succeed Neil Catto, who will move to executive director, responsible for strategic projects.
McCabe joins boohoo from FTSE 250-listed Trainline, which said McCabe will step down from the role on September 15. Peter Wood, vice president of Finance, will become interim CFO whilst the process to appoint a successor is underway, Trainline said.
The online ticketing platform also said it continues to make good financial and operational progress, growing strongly in the UK and internationally, and its expectations for the full year remain unchanged.
Galliford Try Holdings said it has won a position on the new Midlands Highways Alliance Plus Medium Schemes Framework 4.
Galliford Try said the entire framework is valued at GBP1 billion and will run for the next four years, with the potential to extend for a further four years. Galliford Try has been a main contractor with MHA+ since 2014.
CEO Bill Hocking commented: "The MHA+ framework is a key part of the strategy for our Highways business going forward. Throughout the country we have a strong track record of delivering fruitful, collaborative partnerships with local authorities, and we look forward to working with the MHA+ and its client authorities to making a lasting impact on infrastructure around the country."
Wall Street ended lower on Wednesday, with the Dow Jones Industrial Average down 0.2%, S&P 500 down 0.1% and Nasdaq Composite down 0.2%.
The US economy remains strong but a series of aggressive rate hikes meant to cool soaring inflation could eventually trigger a recession, its top central banker cautioned.
Powell, whose testimony before US senators was closely watched by investors and analysts, said the world's largest economy faces an "uncertain" global environment and could see further inflation "surprises".
The Fed chair stressed that the US central bank understands the hardship caused by rising prices and is committed to bringing down inflation, which has reached a 40-year high.
"Sentiment has continued to ebb and flow this week, as stock markets continue to get buffeted by concerns about recession against a backdrop of central banks who appear determined to squeeze inflation out of the global economy," said CMC Markets analyst Michael Hewson.
"As we look ahead to today's European open the main focus is set to be on the latest flash PMIs for June from France, Germany, UK and the US with further weakness expected across the board in the face of higher prices and weakening demand," Hewson added.
The Nikkei 225 index in Tokyo closed up 0.1%.
Economic activity in Japan registered its best performance in seven months, as border restrictions were relaxed, survey data showed on Thursday.
The au Jibun Ban-S&P Global flash composite output index rose to 53.2 in June from 52.3 in May. Any reading over the neutral level of 50.0 indicates growth.
"Activity at Japanese private sector businesses rose solidly at the midway point of 2022 as border restrictions related to the Covid-19 pandemic were eased. The rise was the fourth in as many months and the sharpest recorded since last November amid the strongest expansion in the services sector since October 2013, with firms relating the increase to the return of international visitors," said Usamah Bhatti, economist at S&P Global Market Intelligence.
This was driven by the services business activity index, which rose to 54.2 from 52.6. The manufacturing purchasing managers' index eased to 52.7 from 53.3.
In China, the Shanghai Composite was up 1.4%, while the Hang Seng index in Hong Kong was up 1.6%. The S&P/ASX 200 in Sydney ended up 0.2%.
The pound was quoted at USD1.2246 early Thursday, down from USD1.2303 at the London equities close Wednesday.
The euro was priced at USD1.0566, down from USD1.0592. Against the yen, the dollar was quoted at JPY135.77 in London, lower against JPY135.89.
Brent oil was trading at USD110.55 a barrel Thursday morning, down from USD111.14 late Wednesday. Gold stood at USD1,833.88 an ounce, lower against USD1,841.20.
Thursday's economic calendar has a slew of flash purchasing managers' index readings, including for the eurozone at 0900 BST, the UK at 0930 and the US at 1445 BST.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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