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(Alliance News) - Stocks in London are expected to edge into the red at Friday's market open, failing to capitalise on the AI-driven gains seen in other global equity markets.
Following an impressive set of results, Nvidia shares soared 16%, adding about USD250 billion to its market capitalisation, setting a new daily record increase. This drove the Dow and S&P 500 to new record highs, while the Nasdaq closed just shy of its all-time high. Record highs were seen for the European Stoxx 600 and Tokyo's Nikkei 225 index on Thursday.
"The cheery mood in the global stock markets was completely decoupled with the gloomy mood in the sovereign space. The US 2 and 10-year yields rose yesterday because some more Federal Reserve members warned about cutting the US rates too early and too much," noted Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
Three Fed officials called for patience on interest rate cuts Thursday, with one of them suggesting they wanted to see "at least another couple more months of inflation data" before deciding when to start lowering rates.
"Yesterday's stronger-than-expected manufacturing and housing data came as further evidence that the US economy doesn’t necessarily need rate cuts in a rush," Ozkardeskaya added.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: called down 1.7 points at 7,682.79
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Hang Seng: down 3.77 points at 16,739.18
Nikkei 225: financial markets in Japan closed for public holiday
S&P/ASX 200: closed up 0.4% at 7,643.60
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DJIA: closed up 1.2% at 39,069.11
S&P 500: closed up 2.1% at 5,087.03
Nasdaq Composite: closed up 3.0% at 16,041.62
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EUR: up at USD1.0826 (USD1.0817)
GBP: up at USD1.2666 (USD1.2641)
USD: flat at JPY150.58 (JPY150.53)
GOLD: down at USD2,020.62 per ounce (USD2,022.91)
OIL (Brent): down at USD83.19 a barrel (USD83.33)
(changes since previous London equities close)
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ECONOMICS
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Friday's key economic events still to come:
10:00 CET eurozone consumer expectations survey results
10:00 CET Germany Ifo business climate
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The average UK household energy bill is to fall to its lowest point in two years from April after Ofgem lowered its price cap in response to wholesale prices. The regulator announced it is dropping its price cap by 12.3% from the current GBP1,928 for a typical dual fuel household in England, Scotland and Wales to GBP1,690, a drop of GBP238 over the course of a year or around GBP20 a month. Ofgem said the drop would see energy prices reach their lowest level since Russia's invasion of Ukraine in February 2022, which caused a spike in an already turbulent wholesale energy market, driving up costs for suppliers and customers.
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UK consumer confidence has stalled after months of positivity as stubborn inflation led households to limit their spending, figures suggest. GfK's long-running consumer confidence index fell two points to minus 21 in February, although the forecast for personal finances over the next 12 months remained unchanged and is 18 points higher than this time last year. The fall comes as households face a new round of rising essential costs, with inflation fuelling mid-contract price hikes for the likes of mobile and broadband and looming re-mortgaging. Confidence in the general economy over the next 12 months fell by three points to minus 24, although this remains 19 points higher than a year ago.
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BROKER RATING CHANGES
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Barclays raises InterContinental Hotels target to 8,400 (6,600) pence - 'equal weight'
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Barclays cuts Domino's Pizza to 'equal weight' (overweight) - price target 400 (460) pence
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Barclays raises Breedon to 'overweight' (equal weight) - price target 450 (380) pence
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COMPANIES - FTSE 100
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Standard Chartered announced a new USD1 billion share buyback, as it reported a double-digit profit rise for 2023. In 2023, the London-based, Asia-focused bank brought in operating income of USD18.02 billion, a 10% increase from USD16.32 billion a year before. Net interest income increased 2.4% to USD7.77 billion from USD7.59 billion, while non NII jumped 17% to USD10.25 billion from USD8.73 billion. Its credit impairment fell 39% to USD508 million from USD836 million, though its goodwill & other impairment jumped to USD1.01 billion from USD439 million. Pretax profit increased 19% to USD5.09 billion from USD4.29 billion. Net interest margin came in at 1.67% - a touch above consensus expectations of 1.66% - and improved from 1.41% in 2022. Its underlying return on tangible equity improved to 10.1% from 7.7%. StanChart proposed a final dividend of USD0.21 per share, bringing the full-year total to USD0.27 - a 50% increase from the prior year's 18-cent payout. It also announced plans for a USD1 billion share buyback to start "imminently". Looking ahead, the firm guided for operating income to increase between 5% and 7% in the period from 2024 to 2026, and around the top of this range in 2024. Shares in StanChart were up 2.4% in Hong Kong on Friday afternoon.
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COMPANIES - FTSE 250
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Chemring updated ahead of its annual general meeting. The provider of technology products and services to aerospace, defence and security markets said its expectations for financial 2024 remain unchanged. It pointed to an "environment of heightened geopolitical uncertainty" which provides a positive backdrop for its niche products. "The outlook for global defence markets is increasingly robust, with continued growth expected over the next decade. This growing visibility together with the flexibility provided by the group's strong balance sheet gives the Board confidence to continue to invest for the future, balancing near-term performance with longer-term growth and value creation," Chemring said. Its chief executive, Michael Ord, noted that severe weather has hit operations at some of its manufacturing sites, which has increased its second-half weighting, but its current financial year "continues broadly to plan".
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OTHER COMPANIES
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Coca-Cola Europacific Partners announced its results for 2023, as it sealed its buy of Coca-Cola Beverages Philippines. The Coca-Cola bottling partner, which operates in 29 countries, said revenue rose 5.5% year-on-year to EUR18.30 billion from EUR17.32 billion, while pretax profit increased to EUR2.20 billion from EUR1.96 billion. It raised its dividend by 9.5% to EUR1.84 per share. Looking ahead, it expects comparable revenue growth of around 4% in 2024. "We remain confident in the future, continuing to invest for the long-term. A record dividend in FY23 and our recent inclusion into the Nasdaq 100, combined with our FY24 guidance, demonstrate the strength of our business and our ability to deliver continued shareholder value," said CEO Damian Gammell. Additionally, CCEP, alongside Aboitiz Equity Ventures, confirmed it has completed the acquisition of Coca-Cola Beverages Philippines.
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Allianz reported record annual profit, helped by the insurer's strong trading in the US, and it unveiled a new share buyback. For the whole of 2023, total business volume was 5.5% higher at EUR161.70 billion from EUR153.32 billion. Insurance revenue climbed 4.9% to EUR91.25 billion from EUR86.99 billion. Net income increased 32% to EUR9.03 billion in 2023, from 2022's EUR6.86 billion. Operating profit shot up 6.7% to a record EUR14.75 billion from EUR13.81 billion. Allianz attributed its top-line growth in 2023 to its Life/Health arm's "strong growth" in the US. It also noted "positive price and volume effects" in Property-Casualty. Allianz lifted its annual dividend by 21% to EUR13.80 from EUR11.40 per share. In addition, it had announced a new EUR1 billion share buyback on Thursday. Looking to 2024, it targets operating profit of EUR14.8 billion, plus or minus EUR1 billion.
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By Elizabeth Winter, Alliance News deputy news editor
Comments and questions to newsroom@alliancenews.com
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