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(Alliance News) - Stocks in London are likely to open flat on Tuesdays, as investors shake off hawkish comments from the US Federal Reserve, but fail to find positive catalysts.
In economic news, investors were considering the latest central bank decision in Japan. The dollar advanced slightly against the yen, after the Bank of Japan left its ultra-loose monetary policy in place.
In commodities, oil prices mostly held onto their gains overnight, having advanced on Monday amid disruption in the Middle East.
Iran-backed Huthi rebels have escalated attacks on tankers, cargo ships and other vessels in the Red Sea, imperiling a transit route that carries up to 12% of global trade. This prompted companies, including BP, to suspend transits through the area.
The US announced a 10-nation coalition to quell Huthi missile and drone attacks on ships transiting the Red Sea, with Britain, France, Bahrain and Italy among countries joining the "multinational security initiative".
"An extended period of disruption in global trade ways should not only sustain energy prices, but also put a renewed pressure on global supply chains and shipping prices. The latter is a threat to inflation," said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
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 0.1 of a point at 7,614.58
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Hang Seng: down 1.0% at 16,466.64
Nikkei 225: closed up 1.4% at 33,219.39
S&P/ASX 200: closed up 0.8% at 7,489.10
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DJIA: closed little changed at 37,306.02
S&P 500: closed up 21.37 points, 0.5%, at 4,740.56
Nasdaq Composite: closed up 90.89 points, or 0.6%, at 14,904.81
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EUR: up at USD1.0939 (USD1.0914)
GBP: up at USD1.2676 (USD1.2640)
USD: up at JPY143.83 (JPY143.05)
Gold: up at USD2,025.02 per ounce (USD2,022.88)
Oil (Brent): down at USD78.07 a barrel (USD78.52)
(changes since previous London equities close)
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ECONOMICS
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Tuesday's key economic events still to come:
11:00 CET EU CPI
11:00 GMT UK CBI industrial trends survey
08:30 EST US housing starts
08:55 EST US Johnson Redbook retail sales index
12:30 EST US Fed Atlanta President Raphael Bostic speaks
16:00 EST US treasury international capital data
16:30 EST US API weekly statistical bulletin
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BROKER RATING CHANGES
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Peel Hunt raises Flutter Entertainment to 'buy' (hold)
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COMPANIES - FTSE 250
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Embattled music intellectual property investor Hipgnosis Songs Fund delayed the publication of its interim financial results, which had been scheduled for Tuesday morning. The delay was in light of concerns over the valuation of its assets, given that an independent valuer found its assets to be "materially higher than the valuation implied by proposed and recent transactions in the sector", particularly the proposed sale of assets to Hipgnosis Songs Capital. It expects the publish the results before the end of the year.
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OTHER COMPANIES
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Superdry warned its full-year profit will suffer amid the "well-documented challenging trading environment". The clothing retailer pointed to an "abnormally mild autumn" which resulted in a delayed update of its AW23 collection. Retail fell 13% year-on-year in the 26 weeks to October 28, as Wholesale plunged 41%, which it said was partly due to its US wholesale operation exit. "Despite progress on strategic priorities and ongoing programme to recapitalise the balance sheet, the external environment has proven challenging and trading performance has been significantly below management expectations. Profits for the year are therefore expected to reflect this weaker trading seen to date," the firm warned.
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De La Rue reported its interim results for the six months ended September 30. The security printed products maker said revenue slipped 1.7% year-on-year to GBP161.5 million from GBP164.3 million. Currency revenue fell 2.6% to GBP113.4 million, offsetting a 5.7% rise in Authentication revenue, which reached GBP48.1 million. It had also seen GBP2.4 million in Identity Solutions revenue in the prior year, with none recognised in the recent period. Its loss before tax widened to GBP16.8 million from GBP15.9 million. It reiterated guidance for GBP100 million in Authentication revenue for the whole financial year, as well as adjusted operating profit in the early GBP20 million range. "De La Rue's robust performance in the first half reflects the important actions that we have taken since 2020 to make the company resilient to changing market conditions. These actions have allowed us to navigate a downturn over the past 18 months, particularly in Currency, and I am pleased that the market is now showing signs of continuing recovery," said CEO Clive Vacher.
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Shares in Japan's Nippon Steel slid on Tuesday after it announced plans to buy US Steel for more than USD14 billion in a deal that will create the world's number two steelmaker. The agreement will see Nippon pay USD55 a share – a 40% premium on US Steel's closing price on Friday – and comes after the US steelmaker launched a strategic review in August following several unsolicited offers for a partial or total takeover. US Steel shares closed up 26% in New York on Monday. The deal will also see Nippon assume the US firm's debt, taking the total value of the agreement to USD14.9 billion. The agreement has sparked a backlash in the US, with United Steelworkers International president David McCall saying it demonstrated "the same greedy, shortsighted attitude that has guided US Steel for far too long".
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By Elizabeth Winter, Alliance News deputy news editor
Comments and questions to newsroom@alliancenews.com
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