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(Alliance News) - Stock prices in London were called to open higher on Wednesday, after a positive finish on Wall Street.
In early economic news, public sector net borrowing in the UK jumped in November due to the energy support scheme, according to the Office of National Statistics.
It reached a total of GBP21.20 billion, surpassing the GBP13.37 billion in October, which was revised upwards from GBP12.73 billion.
"Public borrowing was boosted in November by the government's energy and cost of living interventions, the decision to reverse April's National Insurance hike, and high inflation," said Pantheon Macroeconomics' Samuel Tombs.
"The Energy Bills Support Scheme cost the government GBP1.9 billion in November, while the Energy Price Guarantee was the main driver of a GBP4.7 billion year-over-year rise in subsidies. In addition, social assistance payments were GBP3.3 billion higher than a year ago, reflecting the payment of the second Cost of Living grants to working-age benefit recipients," Tombs continued.
Meanwhile, consumer confidence in Germany is expected to improve for the third month in a row in January.
The latest GfK forecast is minus 37.8 points for its consumer sentiment index, which is up 2.3 points from the revised figure of minus 40.1 points in December.
Economic and income expectations have improved, as has the propensity to buy.
"The consumer sentiment is thus continuing its cautious recovery. More moderate energy prices than originally expected and the German government's relief packages to curb energy costs are responsible for the decreased pessimism," GfK explained.
In early corporate news, Bunzl said it expects double-digit revenue growth in 2022, while AstraZeneca won two new drug approvals in the EU.
Here is what you need to know ahead of the London market open:
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MARKETS
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FTSE 100: called up 25.5 points, 0.4%, at 7,396.12
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Hang Seng: down 0.1% at 19,079.08
Nikkei 225: closed down 0.7% at 26,387.72
S&P/ASX 200: closed up 1.3% at 7,115.10
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DJIA: closed up 92.20 points, or 0.3%, at 32,849.74
S&P 500: closed up 3.96 points, or 0.1%, at 3,821.62
Nasdaq Composite: closed up just 1.08 points at 10,547.11
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EUR: lower at USD1.0613 (USD1.0627)
GBP: higher at USD1.2156 (USD1.2139)
USD: lower at JPY132.24 (JPY131.27)
GOLD: lower at USD1,814.06 per ounce (USD1,814.62)
OIL (Brent): flat at USD80.31 a barrel (USD79.88)
(changes since previous London equities close)
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ECONOMICS
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Wednesday's key economic events still to come:
11:00 GMT UK CBI distributive trades survey
07:00 EST US MBA weekly mortgage applications survey
10:00 EST US consumer confidence index
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An estimated 1.9 million UK households have missed payments in the run-up to Christmas, according to Which? The consumer group combined the findings from a survey of 2,000 people with population figures to make the calculations. The survey found that around 6.7% of households had missed or defaulted on at least one mortgage, rent, bill or credit payment in the past month in December – which could equate to 1.9 million households if the findings were projected across the UK.
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Ukraine's President Volodymyr Zelensky will meet US leader Joe Biden and address Congress in Washington on Wednesday, a visit the White House said will send Russia a strong message of Western unity. The secretly arranged trip comes on the same day Russian President Vladimir Putin plans to meet his top military officials to assess the dire results so far of the war on Ukraine and set goals for next year. The visit will "underscore the US' steadfast commitment to supporting Ukraine for as long as it takes," White House spokeswoman Karine Jean-Pierre said in a statement. It will be Zelensky's first trip outside Ukraine since Russian forces invaded in February.
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BROKER RATING CHANGES
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Citigroup cuts British Land price target to 388 (526) pence - 'neutral'
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RBC raises Close Brothers price target to 1,350 (1,100) pence - 'outperform'
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COMPANIES - FTSE 100
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Bunzl said it expects to deliver strong growth in 2022, with revenue set to grow 17% year-on-year. This is due to "inflation driving underlying revenue growth and the impact of acquisitions further supplementing growth", the distribution services firm said. Bunzl said its operating margin is expected to be slightly ahead of prior guidance, and will be in line with 2021. Looking ahead to 2023, Bunzl expects revenue to grow slightly, with adjusted operating profit to be "resilient". Adjusted earnings per share are expected to be "moderately" lower from 2022, however. "Negotiations with our largest customer by revenue are ongoing," Bunzl noted.
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AstraZeneca received approvals for Lynparza and Imfinzi in the EU. Lynparza, or olaparib, has been approved as a combination treatment for the treatment of metastatic castration-resistant prostate cancer. The approval was based on the results from its Propel phase III trial. Imfinzi, or durvalumab, has been approved as a first-line treatment in combination with chemotherapy for unresectable or metastatic biliary tract cancer. The approval is based on primary results from the Topaz-1 phase III trial.
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Anglo American said De Beers rough diamond sales amounted to USD410 million in its tenth sales cycle of 2022, which was down from USD454 million in cycle nine. It was up from USD336 million in the tenth cycle of 2021, however. "Demand for our rough diamonds over the final sales cycle of 2022 was in line with expectations, ahead of the normal seasonal closure of polishing factories in southern Africa over the Christmas period and with Sightholders taking a prudent approach ahead of restocking after Christmas and the expected re-opening of the China market," said CEO Bruce Cleaver. The figures for cycle 10 remain subject to adjustment.
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COMPANIES - FTSE 250
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Ferrexpo said it is now receiving sufficient power levels to bring one pelletiser line back into operation in Ukraine. "This will allow the group, together with its stockpiled material, to meet the requirements of existing customer contracts," it explained. The iron pellet producer had suspended its operations in central Ukraine back in October. Ferrexpo said it has produced around 300,000 tonnes of pellets in the fourth quarter so far, and expected total pellet production for 2022 to be around 5.9 to 6.0 million tonnes. "Despite interruptions to the group's production, shipments to customers during 4Q 2022 have continued at a run rate of approximately 250 kilotonnes per month," it noted.
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Security contractor Serco will be sentenced later for health and safety failings that led to a mentally-ill prisoner kicking a custody officer to death. Humphrey Burke, now 29, attacked 54-year-old Lorraine Barwell as she tried to escort him from his cell in Blackfriars Crown Court in central London in June 2015. Burke admitted manslaughter by diminished responsibility and was handed an indefinite hospital order at the Old Bailey in January. Barwell's employer, Serco, which is contracted by the Ministry of Justice to provide security services in courts, pleaded guilty in April to one count of failure to discharge general health, safety and welfare duty from January 2014 to March 2017.
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OTHER COMPANIES
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Directa Plus announced a "new significant" contract with European speciality chemical and ingredient distributor Pigmentsolution. The producer and supplier of graphene nanoplatelets based products said it will support the development of its new Grafyshield G+ product in Europe. The contract will initially run for 12 months from January, in Germany, Austria, Switzerland and Poland. The contract will enable "Directa Plus to assess these important markets to build a solid basis for 2024", and assess potential expansion across Europe in the longer-term.
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Mitsui & Co subsidiary Mitsui USA enters into agreements with Florence Copper for copper cathode offtake and an equity conversion right. Florence plans to produce low-carbon copper cathode in Arizona, and Mitsui will pay USD50 million to cover part of the development costs. Says Florence plans to produce copper using the in-situ recovery for extracting the metal from underground deposits. Expects construction to take 18 months, and then production will start. Florence is a subsidiary of Taseko Mines, which is listed in Toronto, New York and London.
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By Elizabeth Winter, Alliance News senior markets reporter
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