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(Alliance News) - Stocks in London are expected to rise on Thursday, while US financial markets will be closed for Thanksgiving.
"Thanksgiving is one of the calmest trading days of the year. Expect thin trading volumes and higher volatility," said Ipek Ozkardeskata, Swissquote Bank senior analyst.
There will be European flash PMI prints over the morning, while investors also chew on the implications of the latest fiscal measures taken in the UK. Following his autumn statement, Chancellor Jeremy Hunt appeared to hint that more tax cuts are in the works in the run-up to the next election.
Investors will also be watching developments in the oil market closely. Prices had retreated after Opec+ postponed its meeting planned for Sunday until the end of the month, without providing a reason.
Over in Hong Kong, Chinese property stocks were leading gains, amid reports of more government financial support for the sector.
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 17.7 points, 0.2%, at 7,487.21
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Hang Seng: up 0.8% at 17,876.76
Nikkei 225: financial markets in Japan closed for holiday
S&P/ASX 200: closed down 0.6% at 7,029.20
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DJIA: closed up 184.74 points, 0.5%, at 35,272.03
S&P 500: closed up 0.4% at 4,556.62
Nasdaq Composite: closed up 0.5% at 14,265.86
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EUR: up at USD1.0908 (USD1.0864)
GBP: up at USD1.2511 (USD1.2458)
USD: down at JPY149.05 (JPY149.72)
Gold: up at USD1,996.20 per ounce (USD1,993.04)
Oil (Brent): up at USD80.95 a barrel (USD79.36)
(changes since previous London equities close)
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ECONOMICS
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Thursday's key economic events still to come:
Japan Labor Thanksgiving Day: financial markets closed
US Thanksgiving Day: financial markets closed
10:00 CET EU flash PMI
13:30 CET EU ECB meeting minutes
09:30 CET Germany flash PMI
10:30 CET Germany financial stability review
11:00 GMT Ireland labour force survey
09:30 GMT UK flash PMI
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The average household energy bill will rise by GBP94 a year from January after Ofgem increased its price cap in response to rising wholesale prices. The regulator announced it is raising its price cap from the current GBP1,834 for a typical dual fuel household to GBP1,928 from January 1, driven almost entirely by rising costs in the international wholesale energy market due to market instability and global events, particularly the conflict in Ukraine.
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In interviews after his autumn statement, Jeremy Hunt said taxes had risen to pay for Covid-19 pandemic support and Government intervention to help the public through the spike in energy prices triggered by the war in Ukraine. But the chancellor said the UK economy had since "turned a corner", a result he argued had provided him with the opportunity to "lighten the tax burden" with national insurance reductions and savings for businesses. The senior Conservative told Sky News: "We have made a start. I don't pretend (and) I've never pretended that we were going to get there in one go. Hunt said he would entertain a cut to income tax in the spring budget "if it is responsible to do so".
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Shares in heavily indebted Chinese developer Country Garden soared more than 17% on Thursday as signs emerged that Chinese officials are planning more concrete support for the troubled sector. One of the biggest players in China's property industry, Country Garden has racked up debts estimated in June at CNY1.36 trillion, or USD191 billion. It is just one of many companies, including Evergrande, caught up in a sector-wide crisis that has seen a string of debt-laden builders either defaulting or threatening to do so, fuelling fears of a spillover into the wider economy. Bloomberg News reported on Wednesday that Country Garden, which is listed in Hong Kong, was on a draft list of 50 developers that would be eligible for more financial support, citing sources with knowledge of the matter.
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BROKER RATING CHANGES
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UBS cuts Auto Trader Group to 'sell' (neutral) - price target 613 (640) pence
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UBS reinitiates Rightmove with 'buy' - price target 688 pence - 'top pick'
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UBS starts Deliveroo with 'buy' - price target 215 pence
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COMPANIES - FTSE 100
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Intertek confirmed its annual outlook as it updated on its year-to-date trading. In 2023 so far, it said revenue grew 8.3% in constant currency, or 5.1% at actual rates. Constant currency growth was led by strong performances in Corporate Assurance, Health & Safety, Industry & Infrastructure and World of Energy, which helped to offset only a slight rise in Consumer Products. It maintains its outlook for mid-single digit like-for-like revenue growth at constant currency, and still expects margin progression and "strong" free cash flow. "We have seen margin progression driven by our pricing initiatives, good operating leverage and our disciplined cost approach. Our strong free cash flow combined with our robust balance sheet enables us to invest in growth and accelerate performance," said CEO Andre Lacroix.
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COMPANIES - FTSE 250
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Virgin Money UK reported modest topline growth in its financial year ended September 30, but a sharp fall in profit alongside a lower dividend. The banking and financial services firm said net interest income rose to GBP1.69 billion from GBP1.58 billion a year before, while non-interest income was unchanged at GBP140 million. Net interest margin improved to 1.91% from 1.85%. However, pretax profit dropped to GBP345 million from GBP595 million, mostly due to higher credit impairment losses, which climbed to GBP309 million from GBP52 million. It declared a final dividend of 2 pence, down from 7.5p a year before, bringing the annual total to 5.3p, just over half of the 10p payout in the prior year. Virgin Money also announced a further GBP150 million share buyback programme, which brings total shareholder distributions for the year to GBP272 million, up around 2% from the prior year. "With the momentum we carry into 2024, we are confident in the outlook for our business and we expect to deliver around GBP800 million in distributions to our investors by the end of the three-year period ending in 2024," Virgin Money said. Looking ahead, it expects a net interest margin of 190-195 basis points in financial 2024, and expects to deliver an underlying return on tangible equity of around 10% or a statutory RoTE of around 8%.
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OTHER COMPANIES
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Airline and package holiday company Jet2 reported strong progress in its interim period. In the half-year to September 30, revenue rose 24% year-on-year to GBP4.41 billion from GBP3.57 billion. Pretax profit jumped 47% to GBP660.5 million from GBP450.7 million. However, it noted around GBP14.0 million of lost profitability due to the National Air Traffic Services failure, Rhodes wildfires and flooding in Skiathos. The company said it is on track to delivery pretax profit before currency revaluation in line with its previous guidance for the financial year. Current seat capacity for Summer 2024 is around 12% higher than 2024, with bookings and pricing "encouraging". It raised its interim dividend to 4.0p from 3.0p.
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By Elizabeth Winter, deputy news editor
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