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(Alliance News) - Stocks in London are set to open marginally lower on Tuesday, amid of a slew of economic data across the globe.
On Tuesday's economic calendar, there is a slew of manufacturing purchasing managers' index readings, including the eurozone at 0900 BST, the UK at 0930 BST and the US at 1545 BST.
In early UK economic news, house prices fell at the fastest annual rate in 14 years in July, according to Nationwide.
Meanwhile, the Reserve Bank of Australia left its key interest rate unchanged Tuesday, with the central bank saying previous hikes were "working" but the outlook was uncertain.
The pause is the second in a row, following a string of rises aimed at taming runaway prices. The central bank left the cash rate target at 4.10% and the interest rate paid on exchange settlement balances unchanged at 4.00%.
In corporate news, BP revealed that profit fell in its second quarter but still launched a new share buyback.
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 7.5 points, 0.1% at 7,691.91
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Hang Seng: down 0.7% at 19,936.98
Nikkei 225: closed up 0.9% at 33,476.58
S&P/ASX 200: closed up 0.5% at 7,450.70
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DJIA: closed up 100.24 points, or 0.3%, at 35,559.53
S&P 500: closed up 6.73 points, or 0.2%, at 4,588.96
Nasdaq Composite: closed up 29.37 points, 0.2%, to 14,346.02
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EUR: down at USD1.0997 (USD1.1027)
GBP: down at USD1.2834 (USD1.2860)
USD: up at JPY142.59 (JPY142.12)
Gold: down at USD1,957.85 per ounce (USD1,969.90)
(Brent): flat at USD85.08 a barrel (USD85.08)
(changes since previous London equities close)
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ECONOMICS
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Tuesday's key economic events still to come:
Switzerland Swiss National Day: financial markets closed
09:30 EDT Canada manufacturing PMI
10:00 CEST EU manufacturing PMI
11:00 CEST EU unemployment
09:50 CEST France manufacturing PMI
09:55 CEST Germany unemployment
09:55 CEST Germany manufacturing PMI
09:30 BST UK manufacturing PMI
08:55 EDT US Johnson Redbook retail sales index
09:45 EDT US manufacturing PMI
10:00 EDT US ISM PMI
10:00 EDT US job openings and labor turnover survey
16:30 EDT US API weekly statistical bulletin
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The factory sector in Ireland worsened further in July, with companies cutting back production at a historically rapid pace, according to survey results released by S&P Global. More positively, both input costs and output charges continued to be reduced last month, with the drop in input costs the quickest since April 2020, during the pandemic, S&P Global said. The AIB manufacturing purchasing managers' index declined to 47.0 points in July from 47.3 in June, remaining below the neutral 50-point mark and representing the sharpest decline since May 2020. "The ongoing contraction in Irish manufacturing activity is in line with the trend in most other economies, amid a global downturn in the sector, especially in Europe," noted AIB Chief Economist Oliver Mangan.
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The average UK house price fell at the fastest annual rate in 14 years in July, according to an index. Property values declined by 3.8% on average annually in July, marking the weakest reading since July 2009, Nationwide Building Society said. In June, prices had fallen 3.5% annually. House prices dropped by 0.2% month-on-month in July, to reach GBP260,828 on average, after rising 0.1% in June. The price of a typical home is now 4.5% below the August 2022 peak, Nationwide said. Robert Gardner, Nationwide's chief economist, said: "Investors' views about the likely path of UK interest rates have been volatile in recent months." He added: "There has been a slight tempering of expectations in recent weeks but longer-term interest rates, which underpin mortgage pricing, remain elevated."
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BROKER RATING CHANGES
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LBBW raises Vodafone to 'buy' (hold) - price target 100 pence
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Barclays cuts NatWest price target to 340 (360) pence - 'equal weight'
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Barclays raises Pearson price target to 900 (880) pence - 'equal weight'
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COMPANIES - FTSE 100
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BP said second quarter attributable profit came in at USD1.79 billion, down considerably from USD9.26 billion a year earlier and from USD8.22 billion in the first quarter of 2023. Underlying replacement cost profit in the quarter fell to USD2.59 billion, down from USD8.45 billion year-on-year and USD4.96b in quarter one. The oil major declared a dividend of 13.88 US cents, up from 11.466 cents a year ago. BP said the second quarter was resilient with good cash delivery amid turnaround activity and weak refining margins. It also announced that a new share buyback programme will be completed before reporting third quarter results. The buyback will be for a further USD1.5 billion shares, down slightly from the USD1.75 billion share buyback just completed. Looking ahead, BP kept its guidance unchanged, with USD4.0 billion per annum in buybacks.
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HSBC reported "broad-based profit generation" across its global operations in the first half, revising its annual guidance upwards slightly and announcing another quarterly dividend and share buyback. The Asia-focused lender said pretax profit jumped to USD21.66 billion from USD8.78 billion a year before. This included a USD2.1 billion reversal of an impairment related to the sale of its retail banking operations in France, and a USD1.5 billion provisional gain on acquiring the UK arm of Silicon Valley Bank. Back in March, HSBC bought the UK arm of the failed Silicon Valley Bank for the nominal price of GBP1. Thanks to the higher interest rate environment globally, net interest income rose to USD18.26 billion from USD13.39 billion. This helped to bring overall revenue to USD36.88 billion from USD24.55 billion. The bank announced a second interim dividend of USD0.10 per share, as well as its second share buyback of the year for up to USD2 billion.
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COMPANIES - FTSE 250
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AG Barr said that its Chief Executive Roger White has agreed with the board that he will, at a mutually agreed date in the next 12 months, step down from his role as CEO. The soft drinks maker will immediately commence a formal succession process including an external search to ensure a smooth leadership transition. Chair Mark Allen said: "Roger has served the shareholders, board, wider business and industry for over 21 years - this makes him one of the longest serving CEO's in the UK public market." AG Barr also said that revenue in the 26 weeks ended July 30 is expected to be GBP210 million, up 33% annually from GBP15.9 million. As anticipated, first half margins remained under pressure but are in line with its expectations, it added. Looking ahead, AG Barr said it currently expect its full year profit performance to be marginally above the top end of analyst expectations.
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Bakery chain Greggs said that revenue in the 26 weeks ended July 1 rose to GBP844.0 million from GBP694.5 million a year earlier. Pretax profit climbed to GBP80.0 million from GBP55.8 million. On the back of the results, Greggs announced a 16.0p interim dividend, up from 15.0p a year ago. "The strong trading momentum of the first half has continued into the second half of the year, with good sales reflecting the exceptional value that Greggs offers to customers who need food and drink on-the-go. The rate of cost inflation has started to ease and we expect this trend to continue through the second half," Greggs said. It added that it is keeping its expectations for the full year unchanged.
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OTHER COMPANIES
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James Halstead said that sales demand in the year ended June 30, has on the whole proved positive, with the UK, the Americas, Australia, New Zealand and Malaysia all reporting increased demand, although Central Europe sales were lower than last year. The flooring manufacturer added that it has kept its expectations for the full year unchanged. "2023 was a year of contrast, with the earlier months of the financial year having faced escalating energy costs, severe difficulties as a result of the lack of timely availability of international shipping and increased transportation costs. However, the latter months of the year were much more positive with the easing of electricity costs and a great improvement in shipping and transportation costs," the company said.
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Greencoat Renewables continues Spanish expansion with its acquisition of a 50 megawatts Andella wind farm in Valladolid, Spain. The wind farm will be the company's third acquisition in the Spanish market, as it continues to deliver on its European expansion strategy. The Dublin-based owner and operator of renewable energy infrastructure assets did not disclose how much it will be paying for the windfarm.
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By Sophie Rose, Alliance News reporter
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