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(Alliance News) - Stocks in London were called to open flat on Tuesday, after data showed an unexpected rise in UK unemployment.
Market focus on Tuesday morning was on the latest economic data from Asia's largest economy.
China's economy grew 4.5% year-on-year in the first quarter, ahead of FXStreet-cited market consensus of 4.0%, rebounding after the end of zero-Covid measures late last year, according to data published by the National Bureau of Statistics. In the previous quarter, annual growth was just 2.4%.
The figures were the first snapshot since 2019 of a Chinese economy – the world's second-largest – unencumbered by the strict health measures that helped keep the coronavirus in check but battered businesses and supply chains.
In local economic news, UK unemployment ticked upward unexpectedly in the three months to February, as vacancies continued to fall and wage inflation maintained the same pace.
In early UK company news, Entain reported a strong start to the year, with double-digit quarterly revenue growth. Meanwhile, e-commerce firm THG said its pretax loss ballooned in 2022, but adjusted Ebitda was in line with guidance.
Spot gold crept over the USD2,000 an ounce mark.
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 5.5 points, 0.1%, at 7,885.01
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Hang Seng: down 0.9% at 20,599.93
Nikkei 225: closed up 0.5% at 28,658.83
S&P/ASX 200: closed down 0.3% at 7,360.20
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DJIA: closed up 100.71 points, 0.3%, at 33,987.18
S&P 500: closed up 0.3% at 4,151.32
Nasdaq Composite: closed up 0.3% at 12,157.72
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EUR: up at USD1.0940 (USD1.0919)
GBP: up at USD1.2387 (USD1.2364)
USD: soft at JPY134.40 (JPY134.49)
GOLD: up at USD2,000.06 per ounce (USD1,990.71)
OIL (Brent): up at USD85.12 a barrel (USD84.99)
(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 CEST Germany ZEW indicator of economic sentiment
08:30 EDT US housing starts and building permits
08:55 EDT US Johnson Redbook retail sales index
16:30 EDT US API weekly statistical bulletin
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The UK unemployment rate unexpectedly ticked up in the three months to February, official figures showed. According to the Office for National Statistics, the UK jobless rate was 3.8% in the three months to February. This was higher than FXStreet-cited market consensus, which had expected the reading to remain unchanged from 3.7% in the three months to January. "The increase in unemployment was driven by people unemployed for up to six months," ONS explained. Meanwhile, average wage growth continued at the same pace as the preceding three-month period, coming in higher than market expectations but still well short of UK consumer price inflation. ONS also noted there were 348,000 working days lost to strikes during February, rising from 210,000 the month before. Three-fifths of the strikes occurred in the education sector, ONS said.
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BROKER RATING CHANGES
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Goldman Sachs cuts Harbour Energy price target to 390 (430) pence - 'buy'
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COMPANIES - FTSE 100
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Ladbrokes betting shops owner Entain updated on its first quarter, welcoming a "strong start" to 2023. Total group net gaming revenue, excluding the US, rose 15% year-on-year. Total online revenue rose 16%, with gaming up 25% and sports betting rising 8%. Retail rose 14%. Including revenue from its US joint venture BetMGM, total net gaming revenue rose 22%, Entain said. BetMGM revenue was up 94% to around USD470 million in the quarter, in line with the guidance of USD1.8 to USD2.0 billion for 2023. "We are delivering both financially and strategically, with a record number of active customers enjoying our products, and we are executing on growth opportunities to further diversify and expand across regulated markets," said CEO Jette Nygaard-Andersen.
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COMPANIES - FTSE 250
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Payments provider Network International backed its annual guidance, reporting a 13% annual rise in revenue during the first quarter. In constant currency, revenue was up 16%. It reiterated annual guidance of high-teens constant-currency revenue growth, and a slight margin expansion to earnings before interest, tax, depreciation and amortisation. It continues to expect a second-half weighting to these. During the quarter, signings grew significantly from the previous year, reaching "record levels" across UAE's small and medium entreprises and "key entreprise markets". The firm did not update on the takeover proposal from CVC Advisers and Francisco Partners Management announced on Monday.
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Budget airline carrier easyJet updated on its financial half-year ended March 31. It expects loss before tax to have narrowed to around GBP415 million from GBP545 million a year before, as revenue climbed 80% to GBP2.69 billion from GBP1.50 billion. In the second quarter, passenger numbers rose 35% from the previous year, as load factor improved to 88% from 78%. easyJet flew 17.7 million seats during the quarter, which was in line with guidance, and up from 14.8 million a year before. "We see continued strong booking momentum into summer as customers prioritise spending on travel and choose airlines like easyJet offering the best value and destination mix, as well as easyJet holidays which is continuing its steep growth trajectory as the fastest growing holidays company in the UK," said CEO Johan Lundgren.
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OTHER COMPANIES
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E-commerce company THG announced its annual results for 2022. Revenue edged up 2.7% year-on-year to GBP2.24 billion from GBP2.18 billion, but pretax loss widened substantially to GBP549.7 million from GBP186.3 million. Adjusted Ebitda of GBP64.1 million was in line with guidance but more than halved from GBP161.3 million the year before. In the first quarter of 2023, revenue from continuing operations fell 5.6% to GBP457.4 million, with total revenue down 8.6% to GBP469.4 million. "Whilst sales growth was negative during the period this was largely as planned, as a result of prioritising higher margin sales. A significantly improving exit rate supports our expectations of core divisional growth each quarter for the remainder of the year," THG said. For 2023 as a whole it expects revenue in continuing divisions in low to mid single digit percentages, with adjusted Ebitda to be in line company consensus. It provided no further update on the takeover proposal from Apollo that was confirmed on Monday.
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Apple opened its first retail store in India on Tuesday, underscoring the US technology company's increasing focus on the South Asian nation as a key sales market and alternative manufacturing hub to China. The California-based firm is betting big on the nation of 1.4 billion people – home to the second-highest number of smartphone users in the world, after China – with a second store to open in the capital Delhi on Thursday. The world's biggest company in terms of market value is also expanding its manufacturing footprint in India as it seeks to diversify its supply chain away from a heavy dependence on neighbouring China. Apple called the stores a "major expansion" of its presence in India in a statement on Monday.
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By Elizabeth Winter, Alliance News senior markets reporter
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