LONDON (Alliance News) - Sainsbury's leads FTSE 100 gainers at the open Wednesday despite reporting its second consecutive decline in quarterly sales.
However, the overall market has opened lower, depressed by a group of ex-dividend stocks such as Vodafone and ahead of UK jobs figures due at 0930 BST.
Here is what you need to know at the UK market open:
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MARKETS
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FTSE 100: down 0.2% at 6,861.93
FTSE 250: down 0.5% at 16,125.51
AIM ALL-SHARE: down 0.1% at 802.41
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Hang Seng: down 0.2% at 23,261.35
Nikkei 225: closed up 0.5% at 15,069.48
DJIA: closed up 0.02% at 16,945.92
S&P 500: closed down 0.02% at 1,950.79
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GBP-USD: up at USD1.6765
EUR-USD: down at USD1.3536
GOLD: up at USD1,260.90 per ounce
OIL (Brent): up at USD109.89 a barrel
(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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Wednesday's Key Economic Events still to come
(all times British Summer Time)
09:30 UK Average Earnings, ILO Unemployment Rate, Claimant Count
12:00 US MBA Mortgage Applications
15:30 US EIA Crude Oil Stocks change
18:00 US 10-Year Note Auction
19:00 US Monthly Budget Statement
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The UK economy has surpassed the pre-recession peak it reached in January 2008, the National Institute of Economic and Social Research said in a report on Tuesday. For the three months ending May, the think tank forecasts 0.9% growth after estimating 1.1% expansion in three months through April. The latest estimate is approximately 0.2% above where it was in January 2008. The NIESR earlier projected 2.9% annual growth in 2014 and 2.4% in 2015. According to official estimate, the British economy expanded 0.8% in the first quarter of 2014 after growing 0.7% in the previous quarter.
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Global economic growth in 2014 is likely to be weaker than expected, with the poor weather in the US, financial market turbulence and the Ukrainian issue serving as drags, the World Bank said in its latest World Economic Prospects report released late Tuesday. The bank lowered its global economic growth forecast for 2014 to 2.8% from the 3.2% it estimated earlier. At the same time, the World Bank left its forecast for 2015 and 2016 broadly unchanged at 3.4% and 3.5%, respectively.
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Russia on Tuesday welcomed the creation of a safety corridor for civilians to escape fighting in eastern Ukraine, but warned that the country risked catastrophe if the Kiev government does not open dialogue with separatists. Ukrainian President Petro Poroshenko's announcement Tuesday of safe passage for civilians is "a step in the right direction," Foreign Minister Sergei Lavrov said in St Petersburg, according to Russian news agencies. Lavrov said that he expects the move is not just "a shrewd tactic to free the military's hands."
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A new round of energy talks between Russia and Ukraine has been delayed until Wednesday morning, the European Commission says. Energy ministers from the two countries, who are holding EU-mediated negotiations in a bid to settle a gas row, are scheduled to meet starting at 9:30 am (0730 GMT). The talks had been due to be held Tuesday evening. The commission attributed the delay to the late arrival of the Russian delegation in Brussels.
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Congressman Eric Cantor, leader of the Republican majority in the House of Representatives, was defeated Tuesday for the conservative party's nomination in his Virginia district. Cantor, 51, first elected in 2000, was the heir apparent to House Speaker John Boehner. David Brat, an economics professor, won the Republican primary with 56% to 44%, with more than 99% of the vote counted. The district around Richmond, Virginia, is considered solidly Republican, giving Brat the inside track to win the November general election. Larry Sabato, a leading political scientist at the University of Virginia, told the Richmond Times-Dispatch that the race was "one of the most stunning upsets in modern American political history."
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BROKER RATING CHANGES
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TRADERS: EXANE BNP RESUMES WHITBREAD WITH 'OUTPERFORM' - TARGET 5000 PENCE
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GOLDMAN RAISES PREMIER FOODS TO 'BUY' ('NEUTRAL') - TARGET 90 (75) PENCE
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COMPANIES - FTSE 100
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J Sainsbury PLC reported another drop in like-for-like sales, its second consecutive quarterly decline, after nine years of unbroken sales growth. The UK's third largest supermarket chain by market share posted a 1.1% decline in like-for-like retail sales including VAT but excluding fuel for the 12 weeks to June 7 from the same period a year earlier. Including fuel, like-for-like retail sales fell 2.4%. Total group sales in the period declined by 1% excluding fuel, and 0.3% including fuel. "Throughout the quarter we have continued to invest in reducing prices and improving quality, increasing the value of our offer," Chief Executive Justin King said in a statement.
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Rolls-Royce Holdings PLC said a decision by the Emirates airline to cancel an order for 70 Airbus A350 aircraft has knocked about 3.5%, or GBP2.6 billion, off its order book. The aircraft engine maker was due to provide its Trent XWB engines for the aircraft. In a statement, Rolls-Royce said it was disappointed with Emirates' decision, but was confident that the A350 delivery slots vacated by the Dubai-based airline would be taken up by other airlines.
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UK Energy regulator Ofgem has said the big energy suppliers in the UK must engage with customers over the impact of falling wholesale costs on energy prices or risk further undermining public confidence. In recent months, wholesale gas and electricity prices have dropped noticeably, with spot gas prices down 38% in early June compared with the previous year and forward prices for the coming winter down 16% for gas and 9% for electricity, according to Ofgem. Wholesale costs make up nearly half of a household energy bill and Ofgem said in a statement on Tuesday that "suppliers are yet to reduce their prices for existing customers to reflect the wholesale cost changes". The Big Six energy firms in the UK are British Gas, a subsidiary of Centrica PLC, E.ON, EDF, Npower, ScottishPower and SSE PLC.
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Pharmaceuticals company AstraZeneca PLC said 43 abstracts reporting results of the company's research and development in diabetes have been accepted for presentation at the 74th Scientific Sessions of the American Diabetes Association in San Francisco next week. In a statement, the company said it will present clinical data from studies evaluating several approved products, including Forxiga, Bydureon, Onglyza, as well as investigational combination of saxagliptin and dapagliflozin. The sessions take place between June 13 and June 17.
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Media buying giant WPP PLC said its marketing communications agency JWT has bought a majority stake in South African creative agency The Hardy Boys, a further move to increase revenue from digital media. It didn't give any financial details of the deal. The Hardy Boys' revenues for the year ended February 28, 2014 were approximately ZAR55 million, it said. The South African agency's clients include Unilever, Diageo, SA Home Loans, ADvTECH and RCL Foods, amongst others.
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COMPANIES - FTSE 250
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Online betting company Betfair Group PLC reported higher profits and revenues in its last financial year, prompting the company to raise its dividend by 54%. For the year ended April 30, the company reported a pretax profit of GBP61.1 million, compared with a GBP49.4 million pretax loss the prior year, when it booked GBP104.5 million in exceptional expenses and charges. On a underlying basis, which strips out exceptional costs, earnings before interest, taxes, amortisation and depreciation were GBP91.1 million, up 24% from GBP73.3 million the prior year. Betfair said the underlying EBITDA growth was driven primarily by cost savings. The group declared a full-year dividend of 20.0 pence per share, a 54% increase on the 13.0 pence dividend it paid out a year earlier.
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Exhibitions company ITE Group PLC said it has agreed a binding contract to buy a 50% stake in Indonesian exhibitions company PT Debindo Unggul Buana Makmur from that company's founders. It didn't give any financial details for the buy, but said it expects the acquisition to boost earnings in the first full year of ownership. It added that it will finance the deal out of its existing balance sheet.
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WH Smith Q3 High Street Total Sales Down 4%, Like-For-Like Sales Down 4%; Q3 Travel Total Sales Up 4%, Like-For-Like Sales Flat; Financial Position In Line With Market Expectations, Balance Sheet Strong; Remain Confident In Full Year Outcome; Agrees New 5-Year Revolving Credit Working Capital Facility Of GBP93.3M
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Evraz On Track To Meet 2014 Cost Cutting Guidance Of USD400M
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COMPANIES - ALL-SHARE AND AIM
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Nighthawk Energy PLC said it has achieved strong production rates at its Smoky Hill and Jolly ranch projects in Colorado, allowing its net monthly revenue to exceed USD5 million for the first time. The US-focused oil development and production company said it achieved an average gross oil production from the wells of 2,141 barrels per day during May, compared with 1,998 barrels a day during April, with rates reaching 2,326 barrels per day in early May.
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Design and engineering consultancy Hyder Consulting PLC reported a fall in pretax profit as it was beset by contract delays in Australia and a "poor year" in Germany. The company - which helped design Ski Dubai, the first snow centre in the Middle East - posted pretax profit of GBP5.4 million for the full-year ended March 31, down from GBP16.6 million a year earlier, while revenue dipped to GBP296.8 million from GBP298.1 million.
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Scapa Group PLC said it has decided to remain listed on the AIM market, rather than moving to the London Stock Exchange's main market. Scapa had been mulling a move to the main market, but said it had decided to stay on the junior AIM market after consulting with shareholders.
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Nyota Minerals Ltd said it has entered a deal with KEFI Minerals PLC to sell its remaining 25% in the Tulu Kapi Gold project in Ethiopia for GBP1.5 million in cash and shares, after failing to fund its cash calls for the site. The gold exploration company said the sale values KEFI Ethiopia, which owns 100% of Tulu Kapi, at GBP6 million, the same price as when Nyota sold 75% of the site to KEFI in December 2013 for GBP4.5 million.
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LiDCO Group Expects To Meet FY Market Expectations
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Flybe FY Group Pretax Profit GBP8.1M Vs GBP41.1M Loss; Revenue GBP620.5 Vs GBP614.3M; CEO: On Target To Deliver GBP24M In Cost Savings This Year
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Getech Wins New Contract Worth USD2M
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Tritax Big Box REIT Buys Next Group Distribution Warehouse In Doncaster For GBP60M Net, For 6.07% Yield; Agrees GBP16.4M Senior Debt Financing From Barclays Secured On Next Warehouse
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M&C Saatchi Says 2014 Has Started Well With Trading In Line With Expectations
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AfriAg Raises GBP400K Gross From Placing Of 100M Shares At 0.4p
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John Lewis Of Hungerford Trading Ahead Of Volumes Seen Last Year; Says Forward Order Book At May 31 Was GBP6.3M; Says Difficult To Extrapolate A Meaningful FY Forecast
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Wednesday's Scheduled AGMs/EGMs
PPHE Hotel Group
EMED Mining Public Limited
Anglo Pacific Group
Songbird Estates
Lidco Group
M&C Saatchi
Graphite Enterprise Trust
Falkland Oil and Gas
Compass Group
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By Tom Waite; thomaslwaite@alliancenews.com; @thomaslwaite
Copyright 2014 Alliance News Limited. All Rights Reserved.
12 Aug 2014 11:03
