(Alliance News) - Stocks in London are expected to add to Tuesday's gains at Wednesday's market open, having snapped a seven-day losing streak.
Recent optimism on Wall Street was challenged on Tuesday, as S&P Global downgraded the credit ratings of several US banks, which sent shares in the banking sector lower. Citigroup shed 2.5%, JPMorgan fell 2.1% and Wells Fargo fell 2.3%.
However, sentiment was more resilient in Asia, as the latest PMI data pointed to accelerating private sector growth in Japan. The au Jibun Bank flash composite purchasing managers' index rose to 52.6 points this month, from the final reading of 52.2 in July.
The expansion was led by services, with the sector's flash PMI rising to 54.3 from 53.8, as new orders continued to improve.
However, manufacturing remained in contraction with a reading of 49.7, edging up from 49.6. Rates of reduction in output and new orders were less marked than the prior month, however.
In early UK company news, Reckitt Benckiser named its new finance chief. Ithaca Energy reported a drop in interim profit and revenue. Costain said it was considering resuming interim dividends.
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 14.3 points, 0.2%, at 7,285.06
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Hang Seng: up 0.4% at 17,864.47
Nikkei 225: closed up 0.5% at 32,010.26
S&P/ASX 200: closed up 0.4% at 7,148.40
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DJIA: closed down 174.86 points, or 0.5%, at 34,288.83
S&P 500: closed down 12.22 points, or 0.3%, at 4,387.55
Nasdaq Composite: closed up 8.28 points, or 0.1%, at 13,505.87
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EUR: up at USD1.0862 (USD1.0851)
GBP: up at USD1.2752 (USD1.2734)
USD: flat at JPY145.67 (JPY145.79)
Gold: up at USD1,902.67 per ounce (USD1,897.80)
Oil (Brent): down at USD84.16 a barrel (USD84.25)
(changes since previous London equities close)
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ECONOMICS
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Wednesday's key economic events still to come:
10:00 CEST EU flash PMI
16:00 CEST EU FCCI flash consumer confidence indicator
09:30 CEST Germany flash PMI
09:30 BST UK flash PMI
07:00 EDT US MBA weekly mortgage applications survey
09:45 EDT US flash manufacturing PMI
09:45 EDT US flash services PMI
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BROKER RATING CHANGES
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RBC cuts Pennon Group price target to 825 (975) pence - 'sector perform'
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Berenberg raises Hochschild Mining price target to 130 (100) pence - 'buy'
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RBC cuts SSE price target to 1,950 (2,050) pence - 'outperform'
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COMPANIES - FTSE 100
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Reckitt Benckiser said its Chief Financial Officer Jeff Carr intends to retire next March. The consumer goods company has named Shannon Eisenhardt as his replacement, and said she will join on October 17 as CFO designate. Eisenhardt will join from Nike's Consumer, Brand & Marketplace, where she is currently CFO. Prior to joining Nike in 2015, she spent two decades at Proctor & Gamble in a range of finance roles. "Shannon brings extensive experience across consumer and retail, having worked with some of the most globally recognised brands, and an impressive and highly relevant international background," said Chair Chris Sinclair.
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Shell and BP are among 12 oil firms who have been accused of greenwashing over the amount of renewable and low-carbon energy they produce. Research commissioned by Greenpeace analysed the annual reports of the British fossil fuel giants for 2022, alongside 10 other European companies. The report compared the amount of renewable electricity generated by the companies (wind, solar, geothermal and hydro) with the amount of energy they provide through their own oil and gas production. Shell and BP generated just 0.02% and 0.17% of energy from renewable sources in 2022 respectively, the analysis claimed. Meanwhile, the companies' investment in green energy was a fraction of that in fossil fuels over the year, it found.
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COMPANIES - FTSE 250
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Ithaca Energy said revenue in the first half fell to USD1.25 billion from USD1.34 billion a year before. Production rose to 75,755 barrels of oil equivalent per day from 66,685. The North Sea oil and gas firm's pretax profit dropped sharply to USD248.7 million from USD1.74 billion. It affirmed its annual production guidance of between 68,000 to 74,000 boe per day, but narrowed its operating cost guidance towards the lower end of its previous range. It declared a second interim dividend of USD0.1321 per share, unchanged from the previous quarter. "Until the fiscal regime is improved, as a direct result of the Energy Profits Levy, investment across our operated and non-operated portfolio has and will reduce, including the deferral and cancellation of certain 2023 and 2024 projects, impacting medium-term production outlook, with production in 2024 expected to be lower than 2023 levels," Ithaca said.
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OTHER COMPANIES
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Costain said it is progressing the resumption of dividend payments, as the construction and engineering firm reported its interim results. Revenue edged down year-on-year to GBP664.4 million from GBP665.2 million, while pretax profit fell to GBP8.5 million from GBP11.2 million. "The increase in operating performance and the positive outcomes regarding the pension review and refinancing, enables the board to consider the resumption of dividend payments, including the payment of an interim dividend in respect of the period to 30 June 2023," said CEO Alex Vaughan. He also went on to note a positive outlook across the firm's markets, but recognised the "short-term rephasing" of the government's transport spending. It left its expectations for 2023 unchanged, citing good visibility on future revenue.
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Bradda Head Lithium reported assay results from the latest two drill holes at the Basin East Extension 2023 drill programme, which have returned the "highest single interval grade so far" of 2,791 parts per million lithium over 0.4 metres, and a separated sample of 641ppm molybdenum over 1.2 metres. Drilling is now complete and Bradda is working on its upgraded mineral resource estimate, which it expects to finish in mid-September. "The programme has continued to encounter better-than-expected thicknesses of clay, further confirming that lithium-bearing clays continue and appear to thicken to the north into the company's Basin North claims, and likely west into Basin West claims. These positive indicators are expected to lead to significant resource expansion for the company this year," it explained.
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By Elizabeth Winter, Alliance News senior markets reporter
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