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(Alliance News) - Stocks in London are called to open higher on Thursday, as all eyes turn to the latest interest rate decision from the European Central Bank.
The Frankfurt-based bank will release its latest interest rate decision at 1315 GMT. The ECB is expected to leave rates on hold, but all eyes will be on clues for future policy decisions, as hope of an April rate cut dwindles.
In early economic news, Halifax reported that UK house prices rose for the fifth month in a row in February.
In company news, Virgin Money UK has accepted a GBP2.9 billion takeover offer from building society Nationwide.
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%, at 7,688.81
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Hang Seng: down 1.4% at 16,209.02
Nikkei 225: closed down 1.2% at 39,598.71
S&P/ASX 200: closed down 0.4% at 7,763.70
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DJIA: closed up 75.86 points, 0.2%, at 38,661.05
S&P 500: closed up 26.11 points, 0.5%, to 5,104.76
Nasdaq Composite: closed up 91.96 points, 0.6%, to 16,031.54
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EUR: down at USD1.0901 (USD1.0908)
GBP: down at USD1.2736 (USD1.2750)
USD: down at JPY148.35 (JPY149.36)
Gold: up at USD2,152.99 per ounce (USD2,145.00)
(Brent): down at USD83.01 a barrel (USD83.78)
(changes since previous London equities close)
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ECONOMICS
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Thursday's key economic events still to come:
08:30 EST Canada trade balance
14:15 CET eurozone interest rate decision
08:45 CET France foreign exchange reserves
07:30 EST US challenger job cuts
08:30 EST US trade balance
08:30 EST US initial jobless claims
10:30 EST US EIA natural gas stocks
12:00 EST US 15-year fixed rate mortgage average
10:00 EST US Fed Chair Jerome Powell speaks
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UK house prices rose for the fifth consecutive month in February, according to data from Halifax on Wednesday. The Halifax house price index rose by 0.4% on a monthly basis in February, after rising by 1.2% in January. The typical UK home cost now costs around GBP291,699, GBP1,091 more than last month. On an annual basis, prices rose by 1.7% last month, having risen by 2.3% in January. "While it is encouraging that we've seen growth in recent months, what happens next remains uncertain. Although lower mortgage rates, alongside expectations of Bank of England interest rate cuts this year, should help buyer confidence in the short term, the downward trend on rates is showing signs of fading," said Kim Kinnaird, director at Halifax Mortgages. "Even with growing wages and inflation falling back, raising a deposit and affording a sizeable mortgage remains challenging, especially for those looking to join the property ladder, so it remains a possibility that there could be a slowdown in the housing market this year."
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BROKER RATING CHANGES
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Berenberg raises LondonMetric Property to 'buy' (hold) - price target 229 (176) pence
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Peel Hunt raises Domino's Pizza to 'buy' - price target 425 pence
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COMPANIES - FTSE 100
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Rentokil reported that revenue in 2023 climbed to GBP5.38 billion from GBP3.71 bilion a year earlier. Pretax profit increased to GBP493 million from GBP296 million. On the back of the results, Rentokil recommended a final dividend of 5.93p per share, bringing the total dividend to 8.68p up from 7.55p. Looking ahead, the company expects good underlying trading momentum in 2024. Rentokil also said it plans to launch its "RIGHT WAY 2 Plan" to reinvigorate growth in North America. Chief Exeutive Andy Ransom said: "The group overall delivered a good operational and financial performance in 2023, despite weaker growth in North America, achieving 4.9% organic revenue growth and 16.6% margin. We have continued to benefit from our diversified, global footprint and resilient business model, in addition to our sustained focus on customer service and investment in people, technology and innovation."
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Melrose Industries reported that revenue in 2023 rose by 17% to GBP3.35 billion from GBP2.95 billion a year earlier. Its pretax loss narrowed to GBP8 million from GBP328 million. Looking ahead, Melrose expects revenue between GBP3.6 billion and GBP3.75 billion in 2023. CEO Peter Dilnot said: "Melrose Aerospace has delivered record results in 2023, ahead of upgraded guidance driven by strong operating margin progression in both divisions. The group is well positioned to deliver continued growth and margin improvement supported by positive end markets and excellent operational momentum. We have upgraded guidance for 2024 and are confident about unlocking significant further potential of the business going forward."
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COMPANIES - FTSE 250
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Harbour Energy reported that revenue in 2023 dropped to USD3.72 billion from USD5.39 billion a year earlier. It said the fall reflects lower natural gas prices and production. Pretax profit plummeted to GBP597 million from GBP2.46 billion. Despite the fall in revenue and profit, Harbour Energy upped its final dividend to 13 cents from 12 cents. CEO Linda Cook commented: "Harbour materially advanced its strategy during 2023. We improved our safety performance, generated material free cash flow, and progressed our international growth opportunities and CCS projects, while maintaining our capital discipline. This enabled continued shareholder returns over and above our base dividend while retaining the flexibility that allowed us to announce a transformational acquisition in December."
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OTHER COMPANIES
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Virgin Money UK said it has agreed to a takeover by Nationwide Building Society. Under the Nationwide over, Virgin Money UK shareholders to receive 218p per share in cash, as well as 2p dividend from Virgin Money. This bring the total to 220p. The Nationwide takeover offer values all of Virgin Money equity at GBP2.9 billion, this marks a 38% premium to Wednesday. Nationwide and Virgin Money said the combination will create a group with GBP366.3 billion in assets. This will represent "the second largest provider of mortgages and savings in the UK." Nationwide said: "Nationwide has grown over time through a series of historical acquisitions to become the UK's largest building society. Nationwide remains wholly committed to being a building society and a modern mutual that meets its customers' and members' banking needs to a high standard." In a separate announcement, Virgin Money UK said it has suspended its share buyback programme amid Nationwide takeover bid.
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By Sophie Rose, Alliance News senior reporter
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