(Alliance News) - Share prices in London are set to open lower on Thursday, ahead of the UK government's autumn budget statement.
Chancellor Jeremy Hunt is widely expected to announce billion of pounds worth of spending cuts and tax rises.
The UK government ordered a Chinese-owned company to divest most of Britain's biggest semiconductor maker, in a move likely to antagonise Beijing.
Business Secretary Grant Shapps is blocking the full takeover of Newport Wafer Fab by Nexperia following a "detailed national security assessment", a government spokesperson said in a statement.
Shapps is requiring Nexperia to sell at least 86% of the Wales-based chip fabricator "to prevent against potential national security risks," the spokesperson said.
In the US, Republicans took control of the House of Representatives from Democrats, television networks said, narrowly securing a legislative base to oppose President Joe Biden's agenda for the final two years of his term - and leaving power in Congress split.
Recent signs of easing inflation pressures and a slowing US economy could allow the central bank to dial back the pace of interest rate hikes, Federal Reserve Governor Christopher Waller said Wednesday.
The US Federal Reserve has embarked on an aggressive campaign to rein in surging inflation this year, raising its benchmark lending rate six times, including four consecutive mammoth moves of 0.75 of a percentage point.
But positive developments in the latest data, "have made me more comfortable considering stepping down to a 50-basis-point hike" in December, Waller said in a speech, although he stressed that more rate increases are still needed to bring inflation down.
Here is what you need to know ahead of the London market open:
----------
MARKETS
----------
FTSE 100: called down 0.1% at 7,343.40
----------
Hang Seng: down 0.9% at 7343.4
Nikkei 225: closed down 0.4% at 27,930.57
S&P/ASX 200: closed up 0.2% at 7,135.70
----------
DJIA: closed down 39.09 points, 0.1%, at 33,553.83
S&P 500: closed down 0.8% at 3,958.79
Nasdaq Composite: closed down 1.5% at 11,183.66
----------
EUR: lower at USD1.0375 (USD1.0405)
GBP: higher at USD1.1906 (USD1.1883)
USD: higher at JPY139.55 (JPY139.43)
Gold: lower at USD1,766.30 per ounce (USD1,777.45)
Oil (Brent): higher at USD92.22 a barrel (USD91.89)
(changes since previous London equities close)
----------
ECONOMICS
----------
Thursday's key economic events still to come:
11:00 CET EU harmonised consumer price index
12:30 GMT UK autumn statement and OBR economic forecast
12:30 GMT UK BoE chief economist speaks at Bristol Festival of Economics
07:00 CST US Fed St Louis President James Bullard speaks
07:30 EST US Fed Atlanta President Raphael Bostic speaks
09:40 EST US Fed Cleveland President Loretta Mester speaks
12:45 CST US Fed Minneapolis President Neel Kashkari speaks
15:00 CST US Fed Chicago event celebrating President Charles Evans
08:30 EST US housing starts and building permits
08:30 EST US Philadelphia Fed business outlook survey
08:30 EST US unemployment insurance claims report
08:30 EST US export sales
16:30 EST US Foreign Central Bank holdings
16:30 EST US federal discount window borrowings
----------
Motorists are being warned to stay off the roads in the UK, as cars have become stuck in flood water caused by downpours and the country prepares to suffer "miserable conditions" over the next two days. The Met Office issued weather alerts as a band of rain, which arrived in Cornwall on Wednesday afternoon, travels across the country before passing over Scotland's east coast on Friday. Conditions may be "atrocious" for much of the UK, while the Scottish highlands could see some snow, the forecaster said as it put out a yellow warning for rain.
----------
Italy's newly elected far-right Prime Minister Giorgia Meloni met Chinese President Xi Jinping on the sidelines of the G20 summit and accepted his invitation to visit China, her government said. The meeting on the Indonesian resort island of Bali was the first between the Chinese leader and the only woman to have ruled Italy, on what was Xi's second foreign visit since the start of the Covid-19 pandemic. Meloni stressed Rome's desire to promote "mutual economic interests" and to increase Italian exports to China, said an Italian government statement released late Wednesday. Relations between the EU and China were also discussed, "with the hope that they will be revived", it said. Meloni also "insisted on the importance of relaunching all communication channels, including on human rights". Xi invited her to visit China at the end of the meeting and she accepted, the statement said. The talks lasted about an hour, according to Italian media.
----------
BROKER RATING CHANGES
----------
RBC cuts Hargreaves Lansdown to 'sector perform' ('outperform') - price target 1,050 (1,650) pence
----------
RBC cuts Rathbones to 'sector perform' ('outperform') - price target 2,100 (1,950) pence
----------
RBC cuts Water Intelligence price target to 1,300 (1,560) pence - 'outperform'
----------
COMPANIES - FTSE 100
----------
Luxury clothing and accessories retailer Burberry reported a strong rise in interim profit and revenue, but maintained its near-term guidance amid a "challenging" economic environment. For the six months that ended October 1, Burberry posted a pretax profit of GBP251 million, up 31% from GBP191 million in the six months to September 25 last year. Revenue rose by 12% to GBP1.35 billion from GBP1.21 billion. Given the potential impact of continued Covid-19-related disruption in China, as well as recessionary risk in Europe and the Americas, Burberry said it has decided to maintain its near-term guidance through to financial 2024. It declared an interim dividend of 16.5 pence, up from 11.6p a year ago.
----------
Safety equipment maker Halma said it is on-track for the full-year after reporting record revenue in the six months that ended September 30. In the half-year, revenue totalled GBP875.5 million, up from GBP737.2 million the previous year. Pretax profit, however, dropped to GBP145.5 million from GBP167.5 million. Halma said this drop was due to a gain on disposal of GBP34.0 million in the first half of its last financial year, which wasn't repeated. Excluding this gain, it noted, pretax profit was up 9%. "We saw strong demand for our companies' products and services in the period. Our order book is exceptionally strong, having grown from the record level seen at the start of the year. Order intake remained ahead of both revenue and the very strong order intake in the comparable period last year," said Chief Executive Andrew Williams.
----------
COMPANIES - FTSE 250
----------
International Distributions Services, formerly known as Royal Mail, swung to a GBP127 million pretax loss in the six months that ended September 25 from a profit of GBP315 million a year before, as revenue slipped by 3.9% to GBP5.84 billion from GBP6.07 billion. Revenue at Royal Mail, its UK arm, was down 10.5%, while it was up 9.5% in sterling terms at international business GLS. IDS declared no interim dividend but said it may pay a final dividend from earnings in GLS.
----------
Residential landlord Grainger reported a "very successful year" in which it delivered record net rental income growth and record occupancy. In the year that ended September 30, Grainger said pretax profit nearly doubled to GBP298.6 million from GBP152.1 million. It said the profit figure included a GBP81.2 million valuation uplift from one-off transfers from a trading property to an investment property in the year. Net rental income jumped 22% year-on-year to GBP86.3 million from GBP70.6 million. In the year, rent collection averaged at 98% and occupancy held above 90%. The landlord declared a total dividend of 5.97 pence, up 16% against the previous year.
----------
OTHER COMPANIES
----------
Geotechnical contractor Keller said trading since its half-year results has continued at record levels, despite a challenging macro environment. As a result, the company remains on track to deliver a full-year performance in-line with expectations, aided by a FX tailwind. Keller added that its order book remains at a high level, and it said it is seeing a performance recovery in its North American foundations business. These factors, it explained, was giving it confidence for for the short and medium term. In addition, the company recommended a further 5% increase in its final dividend to 24.5 pence, which would bring its total payout to 37.7p, up from 35.9p the previous year.
----------
By Heather Rydings; heatherrydings@alliancenews.com
Copyright 2022 Alliance News Limited. All Rights Reserved.
