HSBC Holdings Share News (HSBA)

LONDON (Alliance News) - Negative leads from Wall Street and Asian markets have given London shares a weak start Thursday, ahead of the latest Bank of England interest rate announcement and policy-maker vote, due at noon.

Shares in Wm Morrison Supermarkets were down 3.1%, after the FTSE 100 grocer reported a sharp drop in profit in the first half of its financial year, as its revenue and like-for-like sales continued to decline in a deflationary UK food market.

Non-food retailers were faring better. Fashion chain Next was up 2.4% and electronics seller Dixons Carphone up 2.1%, both after reporting sales growth. In the FTSE 250, homewares retailer Dunelm also reported sales growth, but the picture was more mixed for Argos and Homebase owner Home Retail.

Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: down 0.8% at 6,177.24
FTSE 250: down 0.6% at 17,046.70
AIM ALL-SHARE: down 0.2% at 734.89
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Hang Seng: down 2.5% at 21,578.67
Nikkei 225: closed down 2.5% at 18,299.62
DJIA: closed down 1.5% at 16,253.57
S&P 500: closed down 1.4% at 1,942.04
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GBP: down at USD1.5346
EUR: down at USD1.1205

GOLD: down at USD1,106.28 per ounce
OIL (Brent): flat at USD47.39 a barrel

(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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Thursday's Key Economic Events still to come
(all times in BST)

11:00 Ireland Consumer Price Index
12:00 UK BoE Interest Rate Decision, MPC Vote and Minutes
13:30 US Initial and Continuing Jobless Claims
13:30 US Import and Export Price indices
13:30 Canada New Housing Price Index
13:30 Canada Capacity Utilization
15:00 US Wholesale Inventories
15:30 US EIA Natural Gas Storage
16:00 US EIA Crude Oil Stocks
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Britain's economic growth softened slightly in three months to August, according to a report released by the National Institute of Economic and Social Research. The think tank said that the monthly estimates of gross domestic product suggested a 0.5% rise in output during three months ended August. This was slower than the 0.6% expansion seen in three months to July. "Despite the slight softening, growth remains close to the estimated long run potential of the economy, but below the average rate of growth (0.7% per quarter) observed since the start of 2013," the think tank said. The NIESR earlier projected the UK economy to grow 2.5% in 2015 and 2.4% next year.
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House prices in the UK spiked in August, the latest survey from the Royal Institution of Chartered Surveyors showed as its house price balance surged to 53%. That topped forecasts for an increase of 46% and was up sharply from 44% in July. "There is good reason for this trend to be sustained into next year, however uncomfortable that may be for those looking to enter the market, given that so many of our members are telling us that they are struggling to replace the stock they have sold," said Simon Rubinsohn, chief economist at RICS.
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Consumer inflation in China reached its highest point for a year, driven by the cost of pork and other food, while producer prices dropped sharply, officials said. The divergence complicates matters for China's wavering economy, experts said. The consumer price index was up 2% year-on-year in August, while the producer price index was down 5.9%, the biggest drop in more than five years, the National Bureau of Statistics (NBS) said.
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Chinese premier Li Keqiang on Thursday promised to relax restrictions on foreign capital in financial markets and said the country would meet its economic targets. "We are speeding up structural reform," Li told delegates to the World Economic Forum's event in Dalian, known as the Summer Davos. China faces a "painful and treacherous" transition from overreliance on manufacturing toward a "growth model driven by consumption and investment," Li said. "It's true that the economy has come under downward pressure...but the Chinese economy will not have a hard landing," he said in a speech on policy direction.
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Core machine orders in Japan skidded 3.6% on month in July, the Cabinet Office said - worth JPY805.6 billion. The headline figure was well shy of forecasts for an increase of 3.3% following the 7.9% contraction in June. On a yearly basis, core machine orders added 2.8% - also missing expectations for a jump of 10.3% after surging 16.6% in the previous month.
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The Reserve Bank of New Zealand lowered its Official Cash Rate by 25 basis points, to 2.75% from 3.00%. That was in line with expectations and marked the third straight meeting with a rate cut. That followed seven consecutive months with no change.
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Standard & Poor's Ratings Services downgraded the sovereign ratings of Brazil to junk status citing political challenges and increased execution risks to its corrective policy changes. The long-term foreign and local currency sovereign ratings on Brazil was lowered to 'BB+' and 'BBB-', with negative outlook.
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BROKER RATING CHANGES
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EXANE BNP CUTS BARCLAYS TO 'UNDERPERFORM' ('NEUTRAL') - PRICE TARGET 260 (290) PENCE
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NOMURA RAISES SKY PLC TO 'BUY' ('NEUTRAL') - PRICE TARGET 1300 (1150) PENCE
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TRADERS: MERRILL LYNCH RAISES HSBC TO 'NEUTRAL' ('UNDERPERFORM')
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GOLDMAN INITIATES CAPITA GROUP WITH 'NEUTRAL' - TARGET 1295 PENCE
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BERNSTEIN RAISES BP TO 'OUTPERFORM' ('MARKET-PERFORM') - PRICE TARGET 450 PENCE
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HSBC CUTS WILLIAM HILL TO 'REDUCE' ('HOLD') - TARGET 335 (390) PENCE
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TRADERS: MACQUARIE RAISES TALK TALK TELECOM TO 'OUTPERFORM' ('NEUTRAL')
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COMPANIES - FTSE 100
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Dixons Carphone said its like-for-like sales grew in the first quarter, driven by a strong performance in the UK and Ireland which offset mixed conditions in Southern Europe. The electricals retailer, created by the merger of Dixons Retail and Carphone Warehouse last year, said its group like-for-like revenue growth in the 13 weeks to August 1 was 8%, driven by 10% growth in the UK and Ireland. Like-for-like revenue from its Nordics operations was up by 4% in the quarter, but Southern Europe revenue was flat, as an improvement in Spain and growth in Greece was offset by challenging markets elsewhere.
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Wm Morrison Supermarkets reported a sharp drop in profit in the first half of its financial year, as its revenue and like-for-like sales continued to decline in a deflationary UK food market and as it competes on price with other supermarkets in the face of discounters Aldi and Lidl. The grocer reported a drop in pretax profit in the half year ended August 2 to GBP126 million from GBP239 million in the first half of the prior year, as total revenue fell 5.1% to GBP8.1 billion from GBP8.5 billion, and like-for-like sales excluding fuel declined 2.7%. It said that its like-for-like sales continue to be hit by deflation as it continues to lower prices. Morrisons will pay an interim dividend of 1.50 pence, down from the 4.03p it paid the year before. It confirmed that its full-year dividend will be no less than 5.00p.
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Next said its pretax profit and revenue both rose in the first half of its financial year, driven by higher-than-expected full-price brand sales growth and a robust performance in its directory business, while retail sales rose only marginally. The fashion retailer said its pretax profit for the 26 weeks to July 25 was GBP347.1 million, up from GBP324.2 million, as its total sales revenue for the period rose to GBP1.89 billion from GBP1.85 billion a year earlier. Next said it will hike its interim dividend to 53.0 pence per share, up 6.0% year-on-year and in line with its expectations for the full year.
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Royal Dutch Shell Chief Executive Ben van Beurden has private told investors that only "something cataclysmic" would derail the company's takeover of rival BG Group PLC, The Wall Street Journal reported. Van Beurden, speaking at a lunch hosted by Shell last week for a small group of investors, was asked at the event what he meant by "cataclysmic", to which van Beurden replied: "If people stopped using energy."
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COMPANIES - FTSE 250
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Home Retail Group said its total sales for Argos and Homebase both declined in the second quarter and said the outcome for the full year is less predictable than in the past. The company, which owns catalogue retailer Argos and home improvement retailer and garden centre Homebase, said total sales for Argos in the second quarter were down 0.4% year-on-year to GBP897.0 million, while like-for-like sales in the business fell 2.8%. Total sales at Homebase were down 2.8% to GBP378.0 million as a result of its ongoing store closure programme. Like-for-like sales were higher, however, up 5.9% with broad-based growth across product categories, but particularly in big ticket items.
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Dunelm Group said its pretax profit rose in its last financial year on the back of stronger sales, and it left the door open for further special dividends in the current year as it hiked its final payout. The homewares retailer said its pretax profit for the 53 weeks to July 4 was up to GBP122.6 million, while its pretax profit for the 52 weeks to June 7 was GBP121.4 million. This compares to a pretax profit of GBP116.0 million for the 52 weeks to June 8, 2014. The group said it will pay a total dividend of 21.5 pence, up from 20.0 pence. The company also paid a 70.0 pence special dividend during the financial year and said it will consider doing this again if its net debt multiple remains below 0.25 times earnings before interest, taxation, depreciation and amortisation.
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Centamin said its Sukari mine in Egypt is in a strong position to cope with low gold prices, as it updated its mineral resource and mineral reserve estimates for what is its main asset. In a statement, the gold mining company said that total measured and indicated mineral resource estimate of 13 million ounces gold is reported as an open pit resource at a 0.3 grammes per tonne cut-off grade. That total includes the 1.0 million ounces underground resource. The company reported a total combined open pit and underground mineral reserve estimate of 8.8 million ounces, which it said was an increase of 7% from the previous 8.2 million ounces at the end of September 2013.
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Property company CLS Holdings said it has exchanged contracts on the sale of properties in the UK worth GBP7.4 million. FTSE 250-listed CLS said the sale is GBP1.6 million above the external valuation of the properties as of December 31, 2014, but in line with the valuation of the sites on June 30 this year. The properties includes sites in Cardiff, Manchester, Paisley, St Helens, Swansea and Ipswich.
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Oil services company John Wood Group said it is providing engineering services for the Eagle Ford modification programme at Flint Hills Resources Corpus Christi's West refinery in south Texas in the US. The project will mean the refinery can process 100% US crude oil, primarily for the Eagle Ford shale region, into transportation fuel. Engineering work is set to be completed by mid-2016.
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COMPANIES - LONDON MAIN MARKET AND AIM
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Advertising and marketing company M&C Saatchi expressed confidence for continued progress in its full year, as it sweetened its interim dividend and posted a fall in pretax profit for its first half. For the half year to end-June M&C Saatchi proposed a dividend of 1.61 pence, up 15% from 1.40p a year before. M&C Saatchi reported a pretax profit of GBP8.4 million, down from GBP13.4 million a year before, on revenue of GBP87.6 million, up from GBP82.6 million.
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Ricardo said its pretax profit was marginally lower in the year to the end of June, primarily due to one-off administrative costs, but its underlying profit was higher thanks to better revenue and it said it will raise its total dividend payout. The engineering, technical and environmental consultancy said its pretax profit for the year to June 30 was GBP22.9 million, down from the GBP23.5 million it posted a year earlier, due to it booking GBP3.9 million in one-off costs for amortisation and acquisition-related expenses. Total dividend is up to 16.6 pence from 15.2p.
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COMPANIES - INTERNATIONAL
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Apple introduced new versions of some of its top products , including the latest iPhone and a revamped Apple TV system that Apple chief executive Tim Cook called the "future of television." At a presentation before an audience of thousands in San Francisco, Cook showed off the iPhone 6s and 6s Plus that looked very much like the iPhone 6 it debuted exactly a year ago. But Cook promised "while they may look familiar, we have changed everything" about the new devices.
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South Korean conglomerate Samsung Electronics Co Ltd plans to eliminate 10% of staff at its headquarters, as the world's biggest smartphone maker loses sales to Apple and Chinese vendors, Korea Economic Daily reported. The report indicated that the company targets staff in the human resources, public relations and finance departments. The company also plans to cut some expenses next year. The moves come after new high-end Galaxy smartphones failed to impress consumers, triggering five straight monthly declines and wiping out more than USD40 billion in Samsung's market value since April.
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German utility E.ON said that its Supervisory Board approved the management's proposal for the German nuclear business and related activities to remain at the future E.ON. It expects to record impairment charges in the higher single-digit billion euro range in the third-quarter. This does not affect the new corporate strategy and E.ON is planning to spin off a majority of Uniper with its businesses power generation in and outside Europe and global energy trading in 2016 to its shareholders.
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Thursday's Scheduled AGMs/EGMs

Datatec
Acorn Minerals
Dixons Carphone
Carpetright
Darty
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By Tom Waite; thomaslwaite@alliancenews.com; @thomaslwaite

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