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(Alliance News) - Stocks in London are called to open lower on Tuesday, as investors nervously look ahead to US inflation data and the European Central Bank's latest interest rate decision.
Investors are eyeing the latest set of inflation figures, which will likely dictate whether rate cuts in the first half of 2024 are feasible or not.
On Wednesday, US consumer prices figures are due followed on Thursday by wholesale prices data. The reports come in the wake of blow-out non-farm payrolls numbers on Friday which tilted the balance against an interest rate cut in June.
The data is expected to show that the rate of US annual consumer price inflation picked up to 3.4% last month, from 3.2% in February, according to FXStreet cited consensus.
SPI Asset Management's Stephen Innes said the inflation reading "is arguably the most critical economic print of the year."
Meanwhile, the European Central Bank announces its latest interest rate decision on Thursday. It is expected to leave rates unmoved, but focus will be on any clues on rate cut timing.
In early corporate news, HSBC said it has sold its Argentinian arm for USD550 million. JTC reported higher revenue, but saw its profit drop.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: called down 0.1% at 7,935.80
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Hang Seng: up 0.8% at 16,865.71
Nikkei 225: closed up 1.1% at 39,773.13
S&P/ASX 200: closed up 0.5% at 7,824.20
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DJIA: closed down slightly at 38,892.80
S&P 500: closed down slightly at 5,202.39
Nasdaq Composite: closed up slightly at 16,256.27
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EUR: up at USD1.0857 (USD1.0854)
GBP: up at USD1.2657 (USD1.2652)
USD: up at JPY151.88 (JPY151.82)
GOLD: up at USD2,346.30 per ounce (USD2,330.93)
OIL (Brent): up at USD90.50 a barrel (USD89.93)
(changes since previous London equities close)
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ECONOMICS
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Tuesday's key economic events still to come:
08:45 CEST France trade balance
11:00 IST Ireland industrial production
08:55 EDT US Redbook index
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UK retail sales improved in March, largely driven by an early Easter but providing a boost to firms after a difficult start to the year, figures suggest. Total UK retail sales were up by 3.5% on last March, above the three-month average of 2.1% and the 12-month average of 2.9%, according to the British Retail Consortium-KPMG retail sales monitor. Food sales increased by 6.8% year on year, driven by Easter falling unusually early and the subsequent uplift ahead of the long weekend.
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BROKER RATING CHANGES
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Barclays raises Halma to 'overweight' (equal weight) - price target 2,650 (2,425) pence
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Berenberg raises Johnson Matthey price target to 1,800 (1,650) pence - 'hold'
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Barclays raises Tate & Lyle price target to 790 (760) pence - 'equal weight'
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COMPANIES - FTSE 100
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HSBC said it has agreed to sell its business in Argentina, HSBC Latin America, for USD550 million. The lender has sold the subsidiary to Grupo Financiero Galicia, the "largest" private financial group in Argentina. Chief Executive Noel Quinn said: "We are pleased to agree the sale of HSBC Argentina. This transaction is another important step in the execution of our strategy and enables us to focus our resources on higher value opportunities across our international network. HSBC Argentina is largely a domestically focused business, with limited connectivity to the rest of our international network. Furthermore, given its size, it also generates substantial earnings volatility for the group when its results are translated into US dollars."
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BP updated markets on its first quarter of 2024. It said upstream production in the first quarter is expected to be higher compared to the prior quarter, with output higher in oil production & operations and slightly higher in gas & low carbon energy. For the whole year, BP expects reported and underlying upstream production to be "slightly higher" than 2023, of which Oil production & operations higher and Gas & low carbon energy lower. Further, it said net debt is anticipated to increase in the first quarter amid a working capital build and phasing of capital expenditure.
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Unite Group updated market on current trading. It noted "continued strong demand", with 86% of beds sold for the 2024/2025 academic year. In the 2023/2024 academic year, 90% of beds were sold. Further, it said it is "confident" in delivering rental growth of at least 6% for the 2024/25 academic year. CEO Joe Lister said: "Student demand is strong for the 2024/25 sales cycle, reflecting the continued appeal of our fixed-priced, all-inclusive offer and a growing shortage of high-quality student homes. Together with our alignment to the UK's strongest universities, this supports a positive outlook for rental growth for the 2024/25 academic year and underpins our property valuations."
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Aviva said it has completed the acquisition of AIG Life from Corebridge Financial, a subsidiary of American International Group. The deal, which is valued at GBP453 million, was first announced in September last year. At the time, the London-based insurer said AIG Life UK provides a full suite of individual and group protection products, with 1.3 million individual protection customers and 1.4 million group protection members.
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COMPANIES - FTSE 250
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JTC reported that in 2023 revenue climbed 29% to GBP257.4 million from GBP200.0 million a year earlier. However, pretax profit fell 33% to GBP24.3 million from GBP35.9 million On the back of the results, JTC upped its dividend by 12% to 11.17p from 9.98p. "Having achieved our Galaxy era strategic objective to double the size of the business in 2023, two years earlier than planned, we start 2024 with strong growth momentum towards our new Cosmos era goal to double the size of the business again," said CEO Nigel Le Quesne. "I have no doubt that this success will continue, and we look forward to delivering further strong profitable growth in 2024 and beyond."
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OTHER COMPANIES
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Tesla has settled with the family of an engineer killed when his Model X crashed in Silicon Valley six years ago, avoiding a trial, according to court filings. A jury trial was to start next week in a wrongful death suit that accused Tesla of not living up to its marketing when it came to driver-assistance and safety technology in its cars. Court documents filed Monday said Tesla and the family of Wei Lun Huang had reached a settlement, and that Tesla is asking the amount involved remain under seal.
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Apple has decided to embrace gaming emulation apps, a move which is perceived as a preemptive measure to retain users amidst the EU's ruling mandating the allowance of third-party app stores. Apple recently announced the significant change in its App Store regulations, which will allow developers to incorporate retro game console emulator apps on its platform. The decision was communicated to developers by email. The updated guidelines not only permit developers to offer game emulators for iOS, but they also allow retro game emulator apps to provide downloadable games.
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Apple is pairing up with Shutterstock on artificial intelligence image training to upgrade Apple's devices with the latest technology, Apple said on Monday. The tech giant has recently signed a deal, worth up to USD50 million, with Shutterstock to license millions of images, video and audio content to train its AI large language models, according to Apple Insider. The alleged deal could improve the image generation and editing capabilities of iPhones, by enhancing the AI image recognition technology. Moreover, iPhone users could take advantage of improved voice recognition and automatic transcription with the help of video and audio content from Shutterstock.
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By Sophie Rose, Alliance News senior reporter
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