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(Alliance News) - Stock prices in London were pointed higher on Monday, with equity investors digesting the latest developments in the energy market and with a string of economic readings for May due.
Oil prices rose by just over a dollar a barrel, as major oil-producing nations announced on Sunday they will cut output.
Saudi Arabia said it would cut output by one million barrels per day after a meeting of the Opec+ alliance in Vienna.
Meanwhile, there was some positive economic data from Asia, with the latest purchasing managers' index surveys pointing to strong growth in the service sectors of China and Japan.
Japan saw record expansions in business activity, new business and new export orders, helping Tokyo's Nikkei index to set another three-decade high. China saw strong expansion in both supply and demand during the month.
There will be more services PMI prints later in the day, including those from the EU, the UK and the US.
"What was clear from last week's economic data was the dire state of the manufacturing sector globally, stuck permanently in contraction with little prospect of a rebound in the short term. The services sector on the other hand has been much more buoyant," said CMC Markets' Michael Hewson.
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 18.7 points, 0.3%, at 7,625.98
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Hang Seng: up 0.4% at 19,025.98
Nikkei 225: closed up 2.1% at 32,193.74
S&P/ASX 200: closed up 1.0% at 7,216.30
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DJIA: closed up 701.19 points, 2.1%, to 33,762.76
S&P 500: closed up 1.5% at 4,282.37
Nasdaq Composite: closed up 1.1% at 13,240.77
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EUR: down at USD1.0705 (USD1.0728)
GBP: down at USD1.2436 (USD1.2476)
USD: up at JPY140.04 (JPY139.68)
Gold: down at USD1,946.47 per ounce (USD1,963.45)
Oil (Brent): up at USD77.03 a barrel (USD75.89)
(changes since previous London equities close)
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ECONOMICS
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Monday's key economic events still to come:
10:00 CEST EU services purchasing managers' index
11:00 CEST EU producer price index
09:55 CEST Germany services PMI
09:30 BST UK official reserves
09:30 BST UK services PMI
09:45 EDT US services PMI
10:00 EDT US ISM services PMI
10:00 EDT US employment trends index
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The Confederation of British Industry faces a D-Day crunch vote on Tuesday as the formerly influential lobbying group tries to secure its future following a series of sexual harassment allegations. The group was forced back to the drawing board in April to come up with a plan which it hopes can help members regain their confidence in its ability to represent them. The CBI promised members to go away, consult and set out a new future for the group. On Tuesday – each member will be allowed one vote to say whether a new plan, published a week earlier, is enough to give them confidence in the CBI. The CBI has promised a series of changes, including reviewing its culture, and allowing members a vote to fire the CBI board if they wish.
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BROKER RATING CHANGES
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Deutsche Bank raises Rio Tinto to 'buy' (hold) - price target 6,000 (6,200) pence
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Jefferies starts Dowlais with 'buy' - price target 155 pence
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Barclays cuts Dr Martens price target to 175 (210) pence - 'overweight'
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COMPANIES - FTSE 100
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Brewer and distiller Diageo appointed Debra Crew as interim CEO with immediate effect. This is because incumbent Ivan Menezes is receiving treatment in hospital "for medical conditions including a stomach ulcer", which has necessitated emergency surgery. Crew was already due to step into the CEO role on a permanent basis next month, as Menezes retires. She was previously chief operating officer at the company.
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COMPANIES - FTSE 250
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Asos received a takeover approach from a Turkish company backed by China's Alibaba the Sunday Times reported, citing "City sources". The sources said online fashion retailer Trendyol BV approached its UK peer in late December with a potential deal that would have valued Asos at between GBP10 and GBP12 a share, triple its current price. This would have valued Asos at more than GBP1 billion. The Times said there are no live talks, and Asos and Trendyol declined comment.
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Energy services firm Hunting said it has entered a 10-year strategic partnership with Zhejiang Jiuli Hi-Tech Metals Co for the supply of corrosion resistant alloys for oil country tubular goods, carbon capture, utilisations & storage, as well as geothermal applications. "The partnership brings together Hunting's Seal-Lock premium connection technology with Jiuli's CRA, such as duplex/super duplex and high nickel-based alloys, for downhole casing and production tubing applications," the company said. It is part of its strategy to become a key supplier in end-markets such as CCUS and geothermal.
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OTHER COMPANIES
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Advanced Medical Solutions said it has received approval from the US Food & Drug Administration for the pre-market approval of LuquiBandFix8 for use in hernia surgery. "The authorisation was granted ahead of schedule and seven months after submission, a significant achievement for the company's first PMA application," it said. The approval represents the chance to enter a new addressable market estimated to be worth around USD200 million, AMS said.
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Credit Suisse said its takeover by UBS will complete around next week Monday. Credit Suisse said it expects its shares to delist from the New York Stock Exchange next week Monday and Switzerland's stock exchange next week Tuesday. The CHF3 billion, around USD3.30 billion, takeover was aimed at stopping the stricken bank from triggering a wider international banking crisis. In March, the Swiss government had said the deal was vital to prevent irreparable economic turmoil from spreading throughout the country and beyond.
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By Elizabeth Winter, Alliance News senior markets reporter
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