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(Alliance News) - The FTSE 100 is likely to open higher on Monday, benefitting from higher oil and gas prices, while fears of escalating regional conflict in the Middle East damp risk sentiment elsewhere.
More than one million people have fled their homes in Gaza in scenes of chaos and despair as Israel bombarded the Hamas-ruled Gaza Strip and continued amassing troops Monday in preparation for a full-blown ground invasion.
US President Joe Biden said in an interview with the CBS news programme 60 Minutes that while invading and "taking out the extremists" was needed, any move to occupy the territory would be a "big mistake". The US and Israel are discussing a Biden visit in the coming week.
Hamas backer Iran and Lebanon's Hezbollah, which is also supported by Tehran, have warned that an invasion would be met with a response. "No one can guarantee the control of the situation and the non-expansion of the conflicts" if Israel sends its soldiers into Gaza, said Iran's Foreign Minister Hossein Amir-Abdollahian.
The Israeli army said Monday it was evacuating residents living along its northern frontier with Lebanon amid rising tensions.
In early UK company news, Hipgnosis Songs Fund said it was withdrawing its proposed dividend, as it expects lower retroactive royalty payments. Electrolyser company ITM said it was beginning to bid on projects in the US market.
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 27.7 points, 0.4%, at 7,627.3
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Hang Seng: down 1.1% at 17,611.34
Nikkei 225: closed down 2.0% at 31,659.03
S&P/ASX 200: closed down 0.4% at 7,026.50
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DJIA: closed up 39.15 points, or 0.1%, at 33,670.29
S&P 500: closed down 21.83 points, or 0.5%, at 4,327.78
Nasdaq Composite: closed down 166.99 points, or 1.2%, at 13,407.23
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EUR: up at USD1.0531 (USD1.0498)
GBP: up at USD1.2169 (USD1.2135)
USD: down at JPY149.48 (JPY149.66)
Gold: down at USD1,915.00 per ounce (USD1,922.99)
Oil (Brent): up at USD90.77 a barrel (USD89.59)
(changes since previous London equities close)
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ECONOMICS
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Monday's key economic events still to come:
EU Eurogroup meeting of eurozone finance ministers
1100 CEST EU foreign trade
1100 IST Ireland goods exports and imports
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UK house price growth was muted this month by October's usually loftier standards, numbers from Rightmove showed, though the property portal noted some calm is returning to the mortgage market. According to Rightmove, UK house prices rose 0.5% on-month in October, quickening slightly from September's 0.4% rise. However, this month's rise is markedly cooler than the 1.4% "historic norm" house price expansion usually delivered in October.
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A top German politician has indicated that the EU might be open to looking again at post-Brexit trading relations with the UK, telling politicians to "call us". German Finance Minister Christian Lindner told BBC News that the UK has a "standing invitation" on any future talks on reducing trade barriers or "obstacles in daily business life". "If you want to intensify your trade relationship with the EU – call us!" He told the broadcaster: "In the daily life of German corporates, there are new obstacles since Brexit… I don't think (the) UK is benefiting from Brexit. "We really appreciate the UK and its values, its people… and I would really, really appreciate it if we can intensify (the trading relationship) again," he said.
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BROKER RATING CHANGES
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Barclays cuts Ocado to 'underweight' (equal weight) - price target 430 (680) pence
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Jefferies raises Pennon Group to 'buy' (underperform) - price target 850 (700) pence
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Jefferies raises United Utilities to 'buy' (hold) - price target 1,200 (960) pence
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COMPANIES - FTSE 100
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GSK said it has received a positive opinion from the European Medicines Agency's Committee for Medicinal Products for Human Use regarding Jemperli in combination with carboplatin-paclitaxel for adults patients with certain endometrial cancer. Jemperli, or dostarlimab, is a monoclonal antibody, while carboplatin-paclitaxel is chemotherapy. The positive opinion is one of the final steps before the European Commission decides on whether to grant the treatment marketing authorisation, GSK noted.
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COMPANIES - FTSE 250
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Betting and gaming firm 888 confirmed Per Widerstrom has taken up his role as chief executive officer, as planned. Jonathan Mendelsohn has returned to his position as non-executive chair, having acted in an executive capacity since January 30. Widerstrom was most recently CEO of Fortuna Entertainment Group, a betting and gaming firm in central and eastern Europe.
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Hipgnosis Songs Fund said it has decided to withdraw its proposed interim dividend of 1.13 pence announced in late September. This is because the firm now expects to receive "significantly lower retroactive payments" in relation to the US Copyright Royalty Board's decision in relation to royalties payable to songwriters for the period covering 2018-2022. Hipgnosis's board intends to reduce its CRB III retroactive accrual to USD9.9 million from USD21.7 million at the end of March. The dividend withdrawal is to ensure compliance with a covenant within its revolving credit facility. "In addition, the company is in discussion with the agent and the lenders to avoid any potential impacts of the unwinding of the CRB III accrual on future fixed charge cover ratio covenant compliance," the fund added. "Subject to satisfactory conclusion to discussions with lenders, the board expects to declare and pay future dividends as targeted."
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OTHER COMPANIES
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ITM Power said it is commencing bidding into projects in the US market. The maker of electrolysers to produce green hydrogen said it will pursue an "accelerated, asset-light entry" into the US market, which is "widely recognised" as having the potential to become one of the largest markets for electrolysers. "The region's green hydrogen journey has just started, which provides ITM with a tremendous opportunity to become a leading electrolyser provider as the market develops over the coming years," said CEO Dennis Schulz.
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On The Beach said bookings for holidays in October and November are up 26% compared with a year ago. Some 58% of UK adults are considering or definitely going on holiday in that period, a survey commissioned by the travel retailer suggested. Zoe Harris, chief customer officer at On The Beach, said: "We all know that this summer has been a complete washout and according to our booking data it looks as though holidaymakers are searching for the last bit of sun."
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By Elizabeth Winter, Alliance News senior markets reporter
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