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(Alliance News) - The FTSE 100 is expected to open higher on Wednesday, amid rising commodity prices prompted by rising tension in the Middle East.
In early economic news, the UK's annual inflation rate remained unchanged at 6.7% in September, after market forecasts had predicted it would cool to 6.5%.
"Clearly the UK is not winning any races with this trajectory as inflation still remains incredibly elevated and much more so than peers," Marcus Brookes, chief investment officer at Quilter Investors.
"With geopolitical tensions rising, energy and petrol prices are once again on the way up and inflationary pressures risk hitting an economy that has gone through a painful cost of living crisis. For now, the higher for longer interest rate narrative will continue to persist," he added.
In early UK company news, Glencore said it was close on of Australia's largest copper mines. Qatar struck a 27-year gas supply deal with Shell. Kin & Carta accepted a private equity takeover offer at a hefty premium.
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 15.7 points, 0.2%, at 7,690.91
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Hang Seng: down 0.1% at 17,754.04
Nikkei 225: closed 1.96 points at 32,042.25
S&P/ASX 200: closed up 0.3% at 7,077.60
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DJIA: closed up 13.11 points at 33,997.65
S&P 500: closed down 0.43 of a point at 4,373.20
Nasdaq Composite: closed down 34.24 points, 0.3% at 13,533.75
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EUR: up at USD1.0589 (USD1.0581)
GBP: up at USD1.2203 (USD1.2191)
USD: down at JPY149.67 (JPY149.74)
GOLD: up at USD1,936.80 per ounce (USD1,924.08)
OIL (Brent): up sharply at USD91.61 a barrel (USD89.41)
(changes since previous London equities close)
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ECONOMICS
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Wednesday's key economic events still to come:
11:00 CEST EU CPI
09:30 BST UK house price index
07:00 EDT US MBA weekly mortgage applications survey
08:30 EDT US housing starts and building permits
12:30 EDT US Fed New York President John Williams speaks
13:00 EDT US Fed Richmond President Thomas Barkin and Federal Reserve Board Governor Michelle Bowman speak
14:00 EDT US Federal Reserve Beige Book
15:15 EDT US Fed Philadelphia President Patrick Harker speaks
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The Office for National Statistics said consumer prices rose 6.7% annually in September, matching the rate seen in August. Market forecasts, as cited by FXStreet, had expected the figure to cool to 6.5% last month. "Large downward effects from food and non-alcoholic beverages and furniture and household goods were largely offset by upward contributions from transport, and restaurants and hotels," the ONS explained. On a monthly basis, prices ticked up 0.5% in September, which was ahead of forecasts of 0.4%. It was also higher than the 0.3% monthly rise seen in August. Core consumer prices, which exclude energy, food, alcohol and tobacco, rose by 6.1% annually in September. This was cooler than the 6.2% rise in August, but higher than forecasts of 6.0%.
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Rishi Sunak could visit Israel as soon as Thursday, according to reports, amid growing concerns about the crisis in the Middle East. The UK prime minister could reportedly travel to the country as part of a wider trip to the region, including stops in Jordan and Egypt, Sky News reported. It would follow visits from US President Joe Biden and German Chancellor Olaf Scholz. Downing Street has said it will not comment on the Prime Minister's travel plans, but reports suggested he would travel to Israel in the coming days.
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BROKER RATING CHANGES
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Citigroup cuts Wizz Air to 'sell' (neutral) - price target 1,400 (3,100) pence
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Barclays cuts Jupiter Fund price target to 105 (130) pence - 'equal weight'
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COMPANIES - FTSE 100
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Glencore said it would close one of Australia's biggest copper mines as it reaches the end of its life after 60 years in operation. Glencore told the 1,200 workers at the underground copper mine at Mount Isa in northwest Queensland that production would end in the second half of 2025 as operations become unviable, the company said in a statement. Mount Isa Mines is one of the biggest copper producers in Australia and a major employer in the Outback town of the same name, home to more than 22,000 people. Glencore said its other metal assets in Mount Isa would continue operating, including a copper smelter, zinc-lead concentrator and lead smelter.
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Qatar has agreed to supply British firm Shell with natural gas for 27 years, the Gulf emirate's state-owned energy company announced on Wednesday. Since Moscow's invasion of Ukraine last year, European countries have scrambled to replace lost deliveries of natural gas from Russia. Qatar will supply 3.5 million tonnes of gas a year under the deal, QatarEnergy said, following two agreements with Shell for a share of the Gulf state's huge North Field gas expansion project. "We are delighted to sign these two long-term LNG sale and purchase agreements with Shell that will further enhance our decades-long relationship and strategic partnership in Qatar and around the world," Qatari Energy Minister Saad al-Kaabi said.
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A tweet for Sky Bet, which is owned by Flutter Entertainment, featuring Gary Neville has been banned after a watchdog found the former footballer's strong appeal among under-18s broke gambling ad rules. The promoted tweet on February 9 contained an embedded video clip from The Overlap football podcast, which showed Neville discussing which team might win the Premier League. The UK's Advertising Standards Authority concluded that the ad was irresponsible, adding: "We told Sky Bet not to include a person or character who had strong appeal to those under 18 years of age in their advertising in future."
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COMPANIES - FTSE 250
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Bodycote named Jim Fairbairn as its new chief executive, who will succeed Stephen Harris upon his retirement. Fairbairn will join the heat treatments and specialist thermal processing services firm next March, and take the helm from May. He joins from test and measurement specialist Megger Group in Dover, where he joined as CEO back in 2017. "His track record in leading and developing specialist global industrial businesses and teams is outstanding and will enable him to contribute rapidly," said Chair Daniel Dayan.
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OTHER COMPANIES
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Just Eat Takeaway.com said it expects to achieve positive adjusted earnings before interest, tax, depreciation and amortisation of EUR310 million for the full year, raised from previous guidance of EUR275 million. Adjusted Ebitda amounted to just EUR19 million in 2022. In the third quarter of the year, gross transaction value was EUR6.47 billion, down 7% from EUR6.92 billion a year before and down 3% at constant currency. For all of 2023, Just Eat said it now expects GTV to be down by 4% at constant exchange rates, compared to previous guidance from between negative 4% and positive 2% on a reported basis. The company also announced the launch of a new share buyback worth EUR150 million.
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London-based business consultancy Kin & Carta said it has accepted a takeover offer from Kelvin UK Bidco, a newly formed company owned indirectly by funds advised by UK private equity firm Apax Partners. Kin & Carta will receive 110 pence in cash for each share, which constitutes a 41% premium to its closing price of 78p on Tuesday. The offer values the company at around GBP203 million on a fully diluted basis. "The changing economic backdrop has highlighted the importance of scale and diversification in the [Digital Transformation] sector. Apax believes that as a private company Kin & Carta will be better placed to make the investments necessary to position the business for long-term success," the firms said. Kin & Carta said its directors believe the offer to be "fair and reasonable", having taken advice from Citigroup. They unanimously recommend shareholders vote in favour of the deal at an upcoming general meeting.
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BHP Group maintained its annual production guidance for its 2024 financial year, though production at its diverse operations fell across the board in the first quarter. In a separate statement, BHP also announced it has agreed to sell the Blackwater and Daunia mines to two wholly owned subsidiaries of Whitehaven Coal for USD4.1 billion in cash. In an operational review, BHP reported that copper production declined by 4% to 457,000 tonnes for the first three months to September 30, from 476,200 tonnes in the fourth quarter that ended June 30, citing planned maintenance. Quarter-on-quarter, iron ore production was down 3%, metallurgical coal production slumped by 34%, energy coal production dropped by 24%, and nickel production was 6% lower.
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ASML said profit rose in the third quarter in line with net sales, as it confirmed its expectations for full-year net sales growth. In the three months that ended October 1, the Veldhoven, Netherlands-based supplier to the semiconductor industry said net income rose 11% to EUR1.89 billion from EUR1.70 billion a year earlier. Diluted earnings per share rose 12% to EUR4.81 from EUR4.29. This was because total net sales rose 15% to EUR6.67 billion from EUR5.78 billion. Looking ahead, ASML said it expects fourth-quarter net sales of between EUR6.7 billion and EUR7.1 billion at a gross margin of 50% to 51%, while confirming its expectation to grow net sales by up to 30% in 2023 and a slight improvement in gross margin compared to 2022.
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By Elizabeth Winter, Alliance News senior markets reporter
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