LONDON (Alliance News) - Oil prices are under pressure early Tuesday, after Iran and six major powers have reached a comprehensive agreement to end concerns over Tehran's controversial nuclear programme, a Western diplomat said. The deal will see Western sanctions against the major oil producer lifted.
Meanwhile, EU finance ministers meet again Tuesday to discuss their new EUR80 billion bailout of Greece, whose leader, Prime Minister Alexis Tsipras, now faces the difficult task of selling the harsh terms of the deal back home.
Stock prices in London are having a soft open, weighed down by oil shares. The market's attention will shift to UK inflation numbers at 0930 BST, with most economists expecting the consumer price index to fall to zero in June from a 0.1% rise in May.
Chinese stock markets look set to end their short run of gains, with the Hang Seng reading down 0.6% and the Shanghai Composite down 1.2%.
Here is what you need to know at the London market open:
----------
MARKETS
----------
FTSE 100: down 0.1% at 6,730.45
FTSE 250: down 0.1% at 17,693.97
AIM ALL-SHARE: up 0.1% at 752.73
----------
Hang Seng: down 0.6% at 25,073.20
Nikkei 225: closed up 1.5% at 20,385.33
DJIA: closed up 1.2% at 17,977.68
S&P 500: closed up 1.1% at 2,099.60
----------
GBP: down at USD1.5457
EUR: down at USD1.0972
GOLD: down at USD1,153.40 per ounce
OIL (Brent): down at USD56.66 a barrel
(changes since end of previous GMT day)
----------
ECONOMICS AND GENERAL
----------
Tuesday's Key Economic Events still to come
(all times in BST)
EU EcoFin Meeting
09:00 Italy Consumer Price Index
09:30 UK Consumer, Retail and Producer Price indices
10:00 Germany ZEW Survey
10:00 EU ZEW Survey
10:00 EU Industrial Production
13:30 US Import and Export Price indices
13:30 US Retail Sales
13:55 US Redbook index
14:00 US NFIB Business Optimism Index
15:00 US Business Inventories
----------
Athens is being asked to implement some reforms by Wednesday in an effort to restore trust between Greece and its creditors following five months of fraught bailout negotiations. Further reform pledges must follow. Defence Minister Panos Kammenos, who leads the junior partner in Tsipras' governing coalition, said the prime minister faced a "coup" after being "blackmailed by the [prospect of a] collapse of banks and a total haircut on deposits." Kammenos said his party, Independent Greeks (ANEL), supported the premier's efforts, but would decide Tuesday whether to back the bailout deal. Their opposition would likely not block its passage through parliament but would create a rift in the coalition. If the Greek Parliament delivers, other national legislatures will be asked for their approval of the deal, a process that Eurogroup chief Jeroen Dijsselbloem hoped to complete by the end of the week.
----------
Greece's arrears to the International Monetary Fund has reached about EUR2 billion after the country missed another payment of about EUR456 million, the Washington-based crisis lender says. IMF spokesman Gerry Rice says that the latest payment due Monday "was not received," and the fund's executive board has been informed. The board will discuss a previous Greek request for an extension on the country's June 30 missed payment "in the coming weeks."
----------
The total value of like-for-like sales in the UK was up 1.8% on year in June, the British Retail Consortium said. That topped forecasts for an increase of 0.5% following the flat reading in May. Overall sales were up 2.9% on year, the BRC said. "We saw welcome signs of growing consumer confidence, with people more willing to 'trade-up' and spend a bit more on big-ticket purchases, likely boosted by the growth in the supply of credit and other factors such as low inflation and rising real incomes," BRC Director General Helen Dickinson said.
----------
UK Prime Minister David Cameron is set on Tuesday to outline his plan to close the gender pay gap in the UK, including requiring companies in the UK to publish the difference between the average pay of their male and female employees. Cameron will say that the new National Living Wage, announced in the Summer Budget last week, will primarily help women, who tend to be in lower paid jobs and will aid his push to close the gender pay gap. Alll British companies with more than 250 employees will have to publish the difference in pay for their male and female employees.
----------
Iran and six major powers have reached a comprehensive agreement to end concerns over Tehran's controversial nuclear programme, a Western diplomat said. The pact will significantly reduce the size of Iran's civilian nuclear programme and place it under years of strict inspections to guarantee that it cannot be used to make atomic weapons, according to the outlines of the pact agreed to in April. Sanctions targeting Iran's economy will be lifted in return.
----------
Germany's inflation slowed as initially estimated in June due to falling energy prices, final data from Destatis showed. Inflation eased to 0.3% in June from 0.7% in May. The inflation rate as measured by the consumer price index decreased after four months of uninterrupted increase.
----------
BROKER RATING CHANGES
---------
TRADERS: MORGAN STANLEY RAISES RELX TO 'OVERWEIGHT' ('EQUAL-WEIGHT')
----------
TRADERS: MORGAN STANLEY CUTS PEARSON TO 'EQUAL-WEIGHT' ('OVERWEIGHT')
----------
TRADERS: DEUTSCHE BANK RAISES SKY PLC TO 'BUY' ('HOLD')
----------
COMPANIES - FTSE 100
----------
AstraZeneca said the US Food and Drug Administration has approved Iressa (gefitinib) as a first-line treatment in patients with metastatic non-small cell lung cancer whose tumors harbor specific types of epidermal growth factor receptor gene mutations, as detected by an FDA-approved test.
----------
COMPANIES - FTSE 250
----------
Dairy Crest Group said its Cheese and Spreads businesses have performed in line with company expectations during the first quarter of its financial year and said its outlook for the full year remains unchanged. Dairy Crest said that it expects sales in its key brands to perform strongly as the year progresses, although it repeated that the combined performance of the Cheese and Spreads businesses will be weighted towards the second half. Dairy Crest is holding its annual general meeting later on Tuesday.
----------
Business information publisher Euromoney Institutional Investor said it has struck a deal to acquire a 10% stake in financial estimates platform Estimize for USD3.6 million in cash. The purchase of the stake was made as part of a USD6 million Series B funding found for Estimize. The company sources estimates from hedge fund, brokerage and independent analysts to provide consensus market expectations. As part of the investment, Euromoney's BCA Research business will partner with Estimize on building new datasets.
----------
International Public Partnerships said the Bazalgette Consortium, of which it is a part, has been named preferred bidder for the GBP4.2 billion Thames Tideway Tunnel Project in London. The FTSE 250-listed infrastructure investment company said it will invest GBP210 million in the project, with the rest of the risk capital to be funded by the other partners in the consortium.
----------
Recruitment company Michael Page International said its gross profit increased in the first half of 2015, even as its results were held back by currency translation effects in Europe. Michael Page said its gross profit in the first half to the end of June was up by 6.6%, though it rose by 10.8% in constant currencies. The greatest currency translation drag for the company came in its Europe, Middle East and Africa business, where its reported gross profit rose by only 1.6%, but was up by 11.8% in constant currencies. The UK was the strongest performer for the company in the half, with gross profit rising by 12%. Permanent placing gross profit in the half was up by 7.3%, while temporary placing gross profit rose 4.1%.
----------
Construction and facilities management company Carillion said it performed in line with its expectations in the first half of 2015 and said its forecasts for the full year remain unchanged. Carillion added its order book and pipeline of opportunities remain strong, despite the impact the UK General Election had on public sector contract awards made in the first half. Carillion also said it has won a GBP80 million contract with BP to build the operational base and accommodation complex for the Khazzan gas project in Oman.
----------
Public transport company FirstGroup said it traded in line with its expectations in the first quarter of its current financial year, with continued growth in its UK rail business, but some more challenging conditions seen in its other units. FirstGroup said it continued to see strong passenger revenue growth in its UK rail business in the quarter to the end of June, but said its UK bus arm has seen continued commercial passenger revenue growth offset by concessionary revenue, though it is making progress on its cost efficiency programme in the latter business. Elsewhere, the group said its Greyhound business in the US is still facing challenges from cheaper fuel, which is pushing people to use their own cars rather than coach services.
----------
Polymetal International said gold equivalent production in the second quarter remained flat from a year earlier but was significantly up quarter-on-quarter, as it reaffirmed its full-year production guidance. The precious metals producer operating in Russia and Kazakhstan said gold equivalent production in the second quarter totalled 334,000 ounces, flat from a year earlier but up from 299,000 ounces in the previous quarter.
----------
Shaftesbury noted the announcement that Orosi (UK) Ltd and PEL (UK) Ltd, entities ultimately beneficially owned by Mr Samuel Tak Lee, intend to acquire up to 25.87 million ordinary Shaftesbury shares through a tender offer at 888 pence per Shaftesbury share. The stock closed Monday at 903.50p. The tender offer has not been solicited by the Shaftesbury board. The Shaftesbury board will review the tender offer and update shareholders if appropriate. Shareholders are urged to take no action, Shaftesbury said.
----------
COMPANIES - LONDON MAIN MARKET AND AIM
----------
Regional newspaper publisher Johnston Press said its trading has remained challenging in the first half of 2015 and said it currently expects its full-year profit will fall below market forecasts. The company said the second quarter of the year, following on from a solid first quarter, was hit by a slowdown in trading and weakness in the run up to and immediately after the General Election in the UK. Johnston said it expects revenue for the 26 weeks to July 4 to be down by around 5.5% year-on-year, with total advertising revenue to fall by 5% and circulation revenue to fall by around 5.5%, even as circulation volumes show a slight slowdown in the decline rate.
----------
Italian chocolate maker Ferrero International said its GBP111.9 million takeover of London-listed Thorntons has become wholly unconditional after it received valid acceptances of 72.1% of Thorntons' share capital. Ferrero, which makes confectionary brands including Ferrero Rocher, Raffaello, Kinder, Nutella and Tic Tac mints, said that it now owns, has agreed to acquire, has received valid acceptances or irrevocable undertakings for 79.6% of Thorntons' issued share capital.
----------
COMPANIES - INTERNATIONAL
----------
China's largest state-owned chip maker Tsinghua Unigroup has made a USD23 billion bid to buy US memory chip maker Micron Technology, the Wall Street Journal reported, citing people familiar with the matter. According to the WSJ report, Tsinghua Unigroup has offered to acquire Micron Technology for USD21 per share, representing a 19.3% premium to Micron's closing stock price of USD17.61 on Monday. Tsinghua Unigroup has reportedly presented a letter to Micron, outlining its bid.
----------
Package delivery giant FedEx is in talks to acquire at least 25 more 767 freighters from Boeing Co, Bloomberg reported, citing people familiar with the matter. The planes' list value would be about USD5 billion. FedEx's directors reportedly met in the Seattle area over the weekend, where the deal was on the agenda.
----------
Royal Bank of Canada said it has entered into a definitive agreement to sell Royal Bank of Canada (Suisse) SA, its Switzerland-based private banking business, to SYZ Group. The transaction is expected to close in the third quarter of calendar year 2015. Financial terms of the deal were not disclosed. Headquartered in Geneva, RBC Suisse provides private banking and wealth management services to high net worth clients globally, with a special focus on emerging markets. It had about CHF10 billion in total assets under management as at October 31, 2014. SYZ is a family-owned private bank and institutional asset management firm, with 19 offices globally, and is also based in Geneva.
----------
Delta Air Lines has decided to offer to invest in Japan's bankrupt Skymark Airlines in a move with the potential to fuel competition in Japan's closed market for domestic flights, Nikkei Asian Review reported. The US carrier has agreed to participate in leading Skymark creditor Intrepid Aviation's proposed restructuring plan, under which Delta would take a roughly 20% stake in the Japanese budget carrier, the report said.
----------
Tuesday's Scheduled AGMs/EGMs
Dairy Crest Group
Rurelec
N Brown
TwentyFour Select Monthly Income Fund
Aberdeen Japan Investment Trust
Development Securities
Newriver Retail
Prospex Oil and Gas
Summit Therapeutices
----------
By Tom Waite; thomaslwaite@alliancenews.com; @thomaslwaite
Copyright 2015 Alliance News Limited. All Rights Reserved.
3 Feb 2016 12:10
