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(Alliance News) - Stocks in London opened higher on Thursday, after the US debt ceiling bill passed the vote in the House of Representatives.
The House approved a debt ceiling and budget cuts package as President Joe Biden and Speaker Kevin McCarthy assembled a bipartisan coalition of centrist Democrats and Republicans against fierce conservative blowback and progressive dissent.
The hard-fought deal pleased few, but politicians assessed it was better than the alternative — a devastating economic upheaval if Congress failed to act. Tensions ran high throughout the day as hard-right Republicans refused the deal, while Democrats said "extremist" Republican views were risking a debt default as soon as next week.
With the House vote of 314-117, the bill now heads to the Senate with passage expected by week's end.
In UK corporate news, Auto Trader reported a jump in revenue and named its new board chair as Matt Davies. Water utility Pennon said annual profit dropped by 88%.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 19.20 points, 0.3%, at 7,465.34
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Hang Seng: up 0.1% at 18,251.74
Nikkei 225: closed up 0.8% at 31,148.01
S&P/ASX 200: closed up 0.3% at 7,110.80
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DJIA: closed down 134.51 points, or 0.4%, to 32,908.27
S&P 500: closed down 25.53 points, 0.6%, at 4,179.83
Nasdaq Composite: closed down 82.14 points, 0.6%, at 12,935.28
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EUR: up at USD1.0681 (USD1.0657)
GBP: up at USD1.2435 (USD1.2381)
USD: down at JPY139.66 (JPY139.83)
Gold: down at USD1,961.62 per ounce (USD1,971.75)
Brent: down at USD73.01 a barrel (USD73.07)
(changes since previous London equities close)
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ECONOMICS
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Thursday's key economic events still to come:
10:00 CEST EU manufacturing PMI
11:00 CEST EU consumer price index
11:00 CEST EU unemployment
13:30 CEST EU ECB meeting minutes
09:55 CEST Germany manufacturing PMI
09:30 BST UK lending to individuals and businesses
09:30 BST UK BoE effective interest rates
09:30 BST UK monetary and financial statistics
09:30 BST UK manufacturing PMI
07:30 EDT US Challenger job-cut report
08:15 EDT US ADP national employment report
08:30 EDT US unemployment insurance weekly claims report
09:45 EDT US manufacturing PMI
10:00 EDT US ISM manufacturing PMI
11:00 EDT US manufacturing PMI
16:30 EDT US foreign central bank holdings
16:30 EDT US federal discount window borrowings
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Ireland's manufacturing sector saw its sharpest deterioration in three years in May, as factories cut back production in response to weak order books, according to survey results released by S&P Global. The AIB manufacturing purchasing managers' index fell to 47.5 points in May from 48.6 in April. Remaining below the neutral 50-point mark, it was the third month in a row of contraction for Irish factories. More positively, inflation pressure eased. Input costs declined further, prompting manufacturers to cut selling prices for the first time since September 2020, according to survey responses.
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BROKER RATING CHANGES
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Barclays raises Burberry price target to 2,390 (2,360) pence - 'equal weight'
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Barclays raises B&M European Value Retail price target to 565 (485) pence - 'overweight'
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Goldman Sachs raises B&M European Value Retail price target to 650 (600) pence - 'buy'
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COMPANIES - FTSE 100
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Auto Trader said revenue in the financial year that ended March 31 rose 16% to GBP500.2 million from GBP432.7 million the year before. Pretax profit, however, slipped to GBP293.6 million from GBP301.0 million. The company proposed a final dividend of 5.6p per share, up from 5.5p, bringing the total dividend to 8.4p, up from 8.2p. Auto Trader named Matt Davies as its chair designate. Incumbent Ed Williams will come to the end of his third three-year term in 2024. Davies will join the board on July 1 and will succeed Williams as chair at the conclusions of Auto Trader's annual general meeting on September 14. Davies is currently chair at bakery chain Greggs, where he was appointed in August 2022. He was previously chief executive of Pets at Home, Halfords and Tesco.
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AstraZeneca hailed another approval for cancer drug Lynparza, as it ceased its development programme for Crohn's disease-focused brazikumab. The Cambridge-based pharmaceutical company said it discontinued the brazikumab inflammatory bowel disease development programme for the monoclonal antibody, which was intended to treat Crohn's disease and ulcerative colitis. "The decision to discontinue brazikumab's IBD development follows a recent review of brazikumab’s development timeline and the context of a competitive landscape that has continued to evolve. The timeline was impacted by delays that could not be mitigated following global events. No safety concerns were identified for patients in these trials," AstraZeneca said.
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Meanwhile, Astra's cancer drug Lynparza won approval in the US as a combination with abiraterone to treat BRCA-mutated metastatic castration-resistant prostate cancer. The combination showed a reduction in the risk of disease progression or death by 76% when compared to abiraterone alone.
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COMPANIES - FTSE 250
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Dr Martens said revenue in the financial year that ended March 31 rose to GBP1.00 billion, up 10% from GBP908.3 million the year before. However, pretax profit fell to GBP159.4 million from GBP214.3 million. The boot maker explained that profit was hurt by lower earnings before interest, tax, depreciation, and amortisation, increased depreciation from system investments, new stores and DC expansion, a GBP3.9 million impairment charge, and a GBP10.7 million charge from the FX translation impact on its Euro bank debt. The company maintained its final dividend of 4.28p per share, bringing the full-year dividend to 5.84p, up 6% year-on-year. Looking ahead, Dr Martens said trading since the start of financial 2024 has been in line with its expectations.
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Pennon Group said revenue in its financial year that ended March 31 rose 4.1% to GBP825.0 million from GBP792.3 million. Pretax profit plummeted 88% to GBP16.3 million from GBP143.5 million. It said this reflected near-term pressures on earnings from inflation driven power and financing costs. The company upped its full-year dividend to 42.73p from 38.53p. "This has been an extraordinary year for Pennon in which extreme weather patterns have tested our operational resilience. At the same time, inflationary pressures have proven our financial resilience. We have been able to respond to both, with agility and pace, focusing on the things that matter right now, and tackling the biggest challenges head on," said CEO Susan Davy.
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OTHER COMPANIES
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ITM Power said that revenue in the financial year that ended April 30 will be ahead of its GBP2 million guidance. It expects to report an adjusted Ebitda loss between GBP90 million to GBP95 million, which is within the lower end of its GBP85 million to GBP95 million guidance. Net cash is anticipated to come in at GBP281 million, ahead of the company's GBP245 million to GBP270 million guidance.
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US online retailer Amazon.com has revealed it paid GBP781 million in direct taxes in the UK last year, a jump of more than GBP130 million from the prior year, as it continued its rapid expansion across the nation. The global marketplace and technology firm said it invested more and generated higher revenues over 2022. With a workforce of 75,000 in the UK and more than 100 warehouses and offices, Amazon's tax bill has amounted to billions over the years. It benefited from a surge in demand for online deliveries during the pandemic, ramping up its operations and going on a recruitment drive to cope with more customer orders. The direct taxes the firm must pay includes business rates, corporation tax and employer national insurance. The bill rose to GBP781 million from GBP648 million in 2021.
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By Sophie Rose, Alliance News reporter
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