(Alliance News) - London reopened on Tuesday after a long holiday weekend but failed to join markets in the US and Japan in rallying on softer comments about China by US President Donald Trump.
Trump said Monday that US and Chinese trade negotiators would "very shortly" resume talks in what he described as a breakthrough in the two economic superpowers' trade war.
"China called last night..., said let's get back to the table. So we'll be getting back to the table," Trump told reporters at the G7 summit in Biarritz, France.
Trump said Chinese officials had made two "very, very good calls" and that "they want to make a deal".
The president's tone was in marked contrast to the steady hardening of positions in the number one and two economies. Just on Friday, Trump sharply raised tariffs on all Chinese imports after Beijing hiked its own levies.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: down 0.4% at 7,066.33
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Hang Seng: down 0.4% at 25,582.14
Nikkei 225: closed up 1.0% at 20,456.08
DJIA: closed up 269.93 points, 1.1%, at 25,898.83
S&P 500: closed up 1.1% at 2,878.38
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GBP: down at USD1.2231 (USD1.2274)
EUR: down at USD1.1108 (USD1.1125)
Gold: up at USD1,534.22 per ounce (USD1,525.07)
Oil (Brent): flat at USD58.87 a barrel (USD58.81)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Tuesday's Key Economic Events still to come
0930 BST UK Finance's Household Finance Update
1100 BST Ireland labour force survey
0855 EDT US Johnson Redbook Retail Sales Index
0900 EDT US monthly house price index
0900 EDT US S&P CoreLogic Case-Shiller indices
1000 EDT US Richmond Fed Business Activity Survey
1000 EDT US Consumer Confidence Index
1630 EDT US API weekly Statistical Bulletin
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The president of Iran has back-pedalled on possible talks with Trump, and now says the US president first must lift sanctions imposed on Tehran. Hassan Rouhani said on that otherwise, a meeting between the two would be just a photo opportunity and "that is not possible". Rouhani's change of heart came a day after Trump said on Monday there is a good chance the two could meet after a surprise intervention by French President Emmanuel Macron during the G-7 summit to try to bring Washington and Tehran together. Rouhani says that "without the US's withdrawal from sanctions, we will not witness any positive development".
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Jeremy Corbyn has insisted Labour will "do everything necessary" to halt a no-deal Brexit as he meets other senior members of Parliament to try to find a way to challenge UK Prime Minister Boris Johnson over EU withdrawal. Before discussions on Tuesday with leading Commons figures opposed to breaking EU ties without an agreement in place, Corbyn insisted the country was heading for a crisis under the prime minister. A no-deal exit from the EU would amount to a "bankers' Brexit" benefiting the rich, Corbyn said. Meanwhile, the Daily Telegraph said that Johnson is sending his chief Brexit adviser David Frost to Brussels this week to hold discussions with EU officials. The report came after Johnson said at the G7 summit in France that he was "marginally" more optimistic about securing a deal, but insisted that other EU states needed to shift ground.
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A tremor measuring 2.9 on the Richter scale has been felt near the UK's only active fracking site, less than two days after a previously record-breaking tremor at the facility. The British Geological Survey reported a large tremor related to fracking activity hit near Blackpool at 8.30am on Monday. The tremor comes only two days after a 2.1 scale "micro seismic event" was detected at the Cuadrilla energy site late on Saturday evening, previously the largest tremor ever recorded at the site. That event led to operations being suspended at the site, and they had not resumed by the time of Monday's tremor, which had a depth of two kilometres and was strong enough to be felt by some residents. According to the British Geological Survey, this is the third tremor at the Preston New Road site in a week after a 1.55-magnitude tremor was recorded last Wednesday.
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German exporters were modestly more upbeat in August from the month prior, although the overall mood remains weak amid ongoing trade war and Brexit worries. Data from the ifo Institute showed the Export Expectations for Manufacturing survey improved to negative 2.1 balance points in August from the negative 2.7 print the month prior. The reading represents the third consecutive month in which the survey has revealed negative sentiment.
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Germany confirmed its economy shrank modestly in the second quarter after foreign trade crimped growth from the largest eurozone economy. Second estimate data from Destatis showed gross domestic product in the second quarter of 2019 shrank 0.1% on the first quarter. This is in contrast to the 0.4% quarter-on-quarter growth reported in the first quarter. The second quarter figure was in line with the initial GDP estimate given in mid-August. On a year prior, there was no growth at all in the German economy in the second quarter. This is in contrast to the 0.8% year-on-year growth recorded in the first quarter of 2019.
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BROKER RATING CHANGES
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RBC RAISES G4S TO 'OUTPERFORM' ('SECTOR PERFORM') - TARGET 200 (205) PENCE
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COMPANIES - FTSE 100
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Distribution firm Bunzl reported a slight rise in profit for the six months to June, despite slowing market conditions. Pretax profit climbed 1.6% to GBP200.5 million, with the adjusted figure climbing 2.7% to GBP264.2 million. Bunzl's revenue rose 4.3% to GBP4.53 million. Bunzl has increased the interim dividend by 2.0%, to 15.5 pence per share. "Against the background of slowing macroeconomic and market conditions across the countries and sectors in which we operate, Bunzl has produced a resilient operating performance with high cash conversion and an increased dividend," said Chief Executive Frank van Zanten. "Looking forward, the group's expectations for 2019 remain unchanged. Despite continuing economic uncertainties, the board believes the combination of our strong competitive position, diversified and resilient businesses and ability to consolidate our fragmented markets will lead to further progress."
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COMPANIES - FTSE 250
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Russian gold miner Polymetal International reported a 20% rise in revenue for the first half of 2019 to USD946 million, mainly driven by a 22% increase in gold equivalent production. Gold sales climbed 36% year-on-year to 604,000 ounces, with prices flat on the year before. Polymetal's adjusted earnings before interest, tax, depreciation, and amortisation rose 34% to USD403 million, "mostly driven" by higher output, though net earnings fell 13% to USD153 million due to foreign exchange. The company has increased the interim dividend by 18% to 20 US cents, and has reiterated 2019 production guidance of 1.55 million ounces of gold equivalent.
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COMPANIES - OTHER MAIN MARKET AND AIM
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Daily Mail & General Trust has agreed to sell its energy industry data unit to US firm Verisk Analytics Inc for USD364.0 million. The sale of Genscape will result in the Daily Mail newspaper owner reducing the size of its portfolio to five sectors, compared with ten in 2016. Chief Executive Paul Zwillenberg said: "This transaction marks another major milestone in Daily Mail & General Trust's continued transformation and is in line with our strategy. Genscape will join Verisk's Wood Mackenzie business which offers data and analysis for clients in the natural resources sector.
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Bank of Cyprus reported a 3.8% drop in net interest income for the six months to June to EUR204.1 million, though its pretax loss narrowed significantly to EUR15.7 million from EUR55.9 million. The lender's common equity tier 1 ratio for the half-year was 15.2%, compared to 14.9% at December's end, with gross loans dipping 1% to EUR13.07 billion and customer deposits falling 3% to EUR16.38 billion. The company has also received European Central Bank approval for the appointment of Panicos Nicolaou as chief executive, effective from the start of September.
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Purplebricks is mulling over changes to its pricing as the online estate agent switches gear following the "mistakes" of the past. New Chief Executive Vic Darvey, who took up the post in May, told the PA news agency the current flat fee model - which costs GBP1,399 in London or GBP899 elsewhere - could be replaced. He said the uncertainty hanging over the property market as Brexit looms could make the change necessary if the rate of house sales slows. "We're going to start to look at how we evolve our pricing over time because our pricing has been pretty much the same for five years, he said.
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COMPANIES - INTERNATIONAL
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An Oklahoma judge on Monday ordered US health care giant Johnson & Johnson to pay USD572 million in damages for its role in fostering the state's opioid addiction crisis. In the first civil trial of a drugmaker over an epidemic that has caused hundreds of thousands of overdose deaths, Judge Thad Balkman said prosecutors had demonstrated that J&J contributed to a "public nuisance" in its deceptive promotion of highly addictive prescription painkillers. "Those actions compromised the health and safety of thousands of Oklahomans," he said. According to the ruling, the company and its Janssen pharmaceuticals division will fund an "abatement plan" for care for addicts, families and communities ravaged by the crisis.
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Biopharmaceutical firm Amgen on Monday said it has agreed to buy biotechnology company Celgene Corp's rights to Otezla for USD13.4 billion in cash. Otezla is the only oral, non-biologic treatment for psoriasis and psoriatic arthritis. Otezla is approved for three conditions in the US and in more than 50 markets outside the US, including the EU and Japan, and has patent exclusivity through at least 2028 in the US. Sales of Otezla in 2018 were USD1.6 billion, driven by strong volume growth.
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Wesfarmers boosted its annual payout after profit and revenue both grew on the year prior, as the Australian retail and industrial conglomerate restructured its operations. For the financial year ended June, pretax profit widened 31% to AUD2.80 billion from AUD2.13 billion the year prior. This was after revenue rose 4.3% to AUD27.92 billion from AUD26.76 billion the year before. "During the year, we successfully completed the repositioning of the group's portfolio, with a highlight being the successful listing of Coles as a standalone company," Wesfarmers Chief Executive Officer Rob Scott said. Wesfarmers proposed a AUD0.78 final dividend per share. For the full year, the dividend rose 25% to AUD2.78 from AUD2.23 the year before.
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Tuesday's Shareholder Meetings
Vertu Capital
Solo Oil
Iomart Group
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