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(Alliance News) - Stock prices in London were expected to open flat on Tuesday, as UK and US markets return from a long bank holiday weekend.
In Washington, Republican and Democratic leaders scrambled to secure Congressional support for a bill aimed at avoiding a catastrophic US debt default – with just one week left before the government starts running out of money.
The bill, finalized on Sunday by US President Joe Biden and House Speaker Kevin McCarthy after weeks of frantic negotiations, faces opposition from the progressive and hard-right wings of their respective parties.
In the UK, shop price inflation accelerated in May to a new peak, although food inflation decelerated despite remaining at an elevated level.
According to the latest British Retail Consortium-NielsenIQ tracker, shop price inflation increased to 9.0% in May, on an annual basis, up slightly from 8.8% in April. This is above the 3-month average rate of 8.9% and takes shop price growth to a fresh high.
In early UK company news, an offer for RHI Magnesita shares valued that company at GBP1.34 billion, almost 40% above the stock's close on Friday.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: called flat at 7,627.6 points
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Hang Seng: up 0.1% at 18,561.73
Nikkei 225: closed up 0.3% at 31,328.16
S&P/ASX 200: closed down 0.1% at 7,209.30
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DJIA: closed up 328.69 points on Friday, or 1.0%, to 33,093.34
S&P 500: closed up 54.17 points, 1.3%, to 4,205.45
Nasdaq Composite: closed up 277.59 points, 2.2%, at 12,975.69
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EUR: down at USD1.0694 (USD1.0703)
GBP: up at USD1.2338 (USD1.2325)
USD: down at JPY140.56 (JPY140.65)
Gold: down at USD1,936.42 per ounce (USD1,939.81)
(Brent): flat at USD76.64 a barrel (USD76.63)
(changes since previous London equities close)
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ECONOMICS
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Tuesday's key economic events still to come:
10:00 CEST EU monetary developments
11:00 CEST EU economic sentiment indicator
09:30 BST UK capital issuance statistics
09:00 EDT US house price index
10:00 EDT US consumer confidence index
13:00 EDT US Fed Richmond President Thomas Barkin speaks at NABE monetary policy & outlook webinar
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UK pubs, bars and restaurants revealed their average bills have surged 81% over the past year as firms make further pleas to the government for support. Industry bodies have revealed that less than a third of hospitality businesses are optimistic about their future after swallowing mammoth energy price increases, as well as more expensive food and wage bills. Data collected by CGA by NielsenIQ on behalf of the British Institute of Innkeeping, UKHospitality, the British Beer and Pub Association and Hospitality Ulster revealed the extent of the current turmoil facing the industry. The research showed that 29% of hospitality businesses said they feel optimistic about the next 12 months.
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Japan's unemployment rate fell to 2.6% in April, according to the country's statistics bureau. In March, the jobless rate had been 2.8%. Market consensus, according to FXStreet, was expecting a reduction to 2.7%, indicating the labour market is tighter than anticipated.
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BROKER RATING CHANGES
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Bernstein cuts Johnson Matthey price target to 1,900 (2,000) pence - market-perform
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RBC cuts Dr Martens to 'sector perform' (outperform) - price target 180 (230) pence
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RBC raises Pets at Home price target to 280 (265) pence - 'underperform'
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COMPANIES - FTSE 100
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Bunzl said it has agreed to buy safety businesses in Brazil and Spain. This month, Bunzl signed an agreement to acquire Leal Equipamentos de Protecao, a specialised safety distributor in Brazil. In April, Bunzl acquired Irudek, a distributor of safety and personal protective equipment, specialising in fall protection equipment in Spain. Bunzl said it has reached a "significant milestone", making 200 acquisitions since 2004. "I am very pleased to welcome these two businesses to the Bunzl family, both of which expand our offering within the safety sector, have strong own brand portfolios, and are margin accretive to the group. Leal meaningfully increases our exposure to the attractive industrial sector in Brazil, whilst Irudek broadens our specialism in Spain to include fall protection," said CEO Frank van Zanten.
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Hiscox named Jonathan Bloomer as chair designate. Bloomer will join the board as chair designate on June 1, succeeding Robert Childs, who will retire on July 1. Bloomer joined Prudential in 1995, initially as chief financial officer and then as CEO from 2000 to 2005. He is currently chair of Morgan Stanley International, DWF Group and SDL Group. CEO Aki Hussain said: "I am very much looking forward to working with Jonathan. His deep experience in driving international growth and managing complexity across a range of financial services companies and other businesses will be extremely valuable to us."
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COMPANIES - FTSE 250
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Ignite Luxembourg Holdings, a company indirectly managed by Rhone Holdings VI, offered to buy a 20% stake in RHI Magnesita at GBP28.5 per share in cash, a 39% premium to the stock's close on Friday. Rhone said it aims to buy a non-controlling minority stake in Vienna-based supplier of refractory products. The offer values all of RHI Magnesita at GBP1.34 billion, or at GBP1.38 billion including a dividend recently declared by RHI Magnesita.
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Home REIT gave an update on its investigation of allegations made in a report by short-seller Viceroy. The information reviewed by A&M indicates that some arrangements with the company's corporate tenants and developers relating to the cost of refurbishment of properties were not brought to the attention of the board by the investment adviser, so that the board was unable to consider whether a release of a developer's liabilities for refurbishment of properties was appropriate. "The board is still considering the conclusions and implications of the A&M report with its advisers, and what actions it may take in response to the matters raised by the A&M report," Home REIT said.
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OTHER COMPANIES
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Hunting said its Asia Pacific operating segment has won a significant new oil country tubular goods contract with Cairn Oil & Gas, Vedanta, for its operations in Rajasthan, India. The contract is worth up to USD91 million and is for an estimated 100 wells. With this order, Hunting's sales order book now is about USD575 million. Based on the timing of the first deliveries of this order, Hunting now expects 2023 full year earnings before interest, tax, depreciation and amortisation to be in the range of USD92 million to USD94 million.
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Hollywood Bowl said revenue in the six months ended March 31 was up to GBP110.2 million from GBP100.2 million a year earlier. However, pretax profit fell to GBP26.7 million from GBP33.4 million. It noted the year earlier period included a VAT benefit. Hollywood Bowl upped its interim dividend by 9.0% to 3.27p from 3.00p. Looking ahead, Hollywood Bowl sees its full-year results to be in line with bpard expectations. It added that it is on track to meet its target of 15 to 20 new centre openings by the end of financial 2025.
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By Sophie Rose, Alliance News reporter
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