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(Alliance News) - The FTSE 100 is set to open lower on Thursday, as investors nervously look ahead to a key interest rate decision from the European Central Bank, and US economic growth data.
The ECB announces its latest rate decision at 1315 BST on Thursday. A press conference with President Christine Lagarde follows half an hour later.
Ebury analyst Matthew Ryan commented: "We expect the ECB to deliver a 'dovish hold' on Thursday, whereby it keeps rates unchanged and warns that mounting risks to the outlook warrants a greater degree of caution."
Overnight, stocks have been shaky in Asia, as equity markets struggled following a US tech sell-off and rising Treasury yields.
Meanwhile, Wall Street closed lower on Wednesday. It was the Nasdaq's worst day since February, while the S&P hit its lowest level since June.
In UK company news, Restaurant Group confirmed Wednesday's Sky News reports that the Pizza Express owner is thinking of making a takeover offer. In the FTSE 100, Unilever reaffirmed its full-year outlook, despite seeing a drop in quarterly turnover.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: called down 0.5% at 7,379.90
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Hang Seng: virtually flat at 17,086.67
Nikkei 225: down 2.1% at 30,601.78
S&P/ASX 200: down 0.6% at 6,812.30
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DJIA: closed down 105.45 points, or 0.3%, at 33,035.93
S&P 500: closed down 60.91 points, or 1.4%, at 4,186.77
Nasdaq Composite: closed down 318.65 points, or 2.4%, at 12,821.22
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EUR: down at USD1.0543 (USD1.0590)
GBP: down at USD1.2080 (USD1.2143)
USD: up at JPY150.60 (JPY149.93)
Gold: up at USD1,985.92 per ounce (USD1,982.33)
Oil (Brent): up at USD88.36 a barrel (USD87.71)
(changes since previous London equities close)
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ECONOMICS
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Thursday's key economic events still to come:
US BoE Deputy Governor Jon Cunliffe speaks at Economics of Payments conference
08:30 EDT Canada payroll employment, earnings and hours
14:15 CEST EU ECB interest rate announcement
09:30 BST UK capital issuance statistics
11:00 BST UK CBI distributive trades survey
08:30 EDT US advance economic indicators report
08:30 EDT US unemployment insurance weekly claims report
08:30 EDT US GDP
10:00 EDT US spending home sales index
16:30 EDT US foreign central bank holdings
16:30 EDT US federal discount window borrowings
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The number of cars built in the UK increased by almost 40% last month, driven by a rise in exports, figures show. A total of 88,230 vehicles left UK factories, 25,105 more than September last year and the best September figure for three years, said the Society of Motor Manufacturers & Traders. Exports increased by a third, with almost six in 10 cars going to the EU. Electrified vehicle production increased by 42%, but the SMMT said urgent action is needed to ensure UK and EU trade remains competitive next year. Car production has reached almost 660,000 so far this year, around 15% above the same period in 2022. The SMMT said there had been notable growth in deliveries to the US, China and Turkey, although the EU continues to be Britain's leading trading partner "by some distance", with 37,563 UK-built cars shipped to the bloc last month.
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BROKER RATING CHANGES
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JPMorgan cuts Lloyds Banking price target to 41 (42) pence - 'underweight'
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Barclays cuts Reckitt Benckiser price target to 7,100 (7,400) pence - 'overweight'
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Narclays raises B&M European Value Retail price target to 630 (620) pence - 'overweight'
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COMPANIES - FTSE 100
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Standard Chartered reported a sharp drop in profit in the third quarter, taking a hit from its exposure to Chinese banking and real estate, but the firm backed its annual targets. The Asia-focused lender said operating income rose 4.5% to USD4.52 billion from USD4.33 billion a year before. However, pretax profit dropped 54% to USD633 million from USD1.39 billion, well below the USD1.41 billion pencilled in by analysts, according to company-compiled consensus. The bottom-line hit came as credit impairments increased to USD292 million from UD227 million, which included further charges related to the Chinese commercial real estate sector. The firm also booked an impairment of around USD700 million related to the reduction in the carrying value of its holding in China Bohai Bank. At the end of September, StanChart's CET1 ratio was 13.9%, up compared to 13.7% a year before, but down from 14.0% at the end of June.
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Unilever reported that in the third quarter of 2023 turnover fell 3.8% annually to EUR15.2 billion. Looking ahead, the consumer goods maker left its outlook for 2023 unchanged, predicting underlying sales growth of 5%. It also expects a "modest" improvement in underlying operating margins. In a separate announcement, Unilever promoted Fernando Fernandez to chief financial officer, after a thorough internal and external search process. Fernandez is currently president of Unilever's Beauty & Wellbeing Business group, and will replace Graeme Pitkethly, who announced his decision to retire from the company earlier this year. Fernandez's appointment is effective from January 1. Chief Executive Hein Schumacher said: "Fernando has had a very impressive track record throughout his Unilever career, in a variety of financial, marketing and general management roles. His deep financial and business experience, strategic acumen and leadership qualities will be critical in helping to drive the step-up in Unilever's performance that we are all determined to deliver"
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COMPANIES - FTSE 250
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HarbourVest Global Private Equity reported its results for the six months ended July 31. In the period, the investment firm's net asset value per share grew 3.3% to USD50.12 from USD48.52 at January 31. Looking ahead HarbourVest noted signs of an "improving outlook." It noted encouraging macroeconomic datapoints, with inflation broadly falling and interest rates stabilising. Further, HarbourVest said it has recently conducted a review of the case for share buybacks. Following this, the company said it will conduct another share buyback and intends to repurchase USD25 million of shares. "The board plans to discuss with shareholders and non-holders to explore the possibility of distributing to shareholders on a regular basis some of the cash generated by realisations of HVPE's net assets, thereby enabling direct participation in NAV growth," it added.
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OTHER COMPANIES
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Morgan Stanley announced its co-President Edward Pick will become its new CEO, as James Gorman prepares to leave the role after almost 14 years. The move was announced at the company's 2023 annual general meeting, and will take effect from the beginning of 2024. At this point, Gorman will transition to an executive chair role. "Over James' 14 years as CEO, Morgan Stanley has been transformed into a strong and balanced financial institution with a long-term sustainable business model. We are grateful for the tremendous impact he has had on our Firm and are thankful that as executive chairman we will continue to benefit from his experience and critical insight," said Tom Glocer, lead director of the board. Pick has been co-president of the bank for the past two years, heading up its Institutional Securities Group, and co-heading Firm Strategy.
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BNP Paribas reported third-quarter revenue growth, shaking off a tricky three months in its fixed income and real estate. The lender said revenue in the three months ended September 30 increased 4.0% on-year to EUR11.58 billion from EUR11.14 billion. Pretax profit increased 6.0% to EUR3.81 billion from EUR3.60 billion. Operating income was 11% higher at EUR3.75 billion from EUR3.38 billion. Chief Executive Officer Jean-Laurent Bonnafe said: "The group's good performance in the third quarter demonstrates the solidity of our model and our long-term commitment to support our clients in all phases of the economic cycle."
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Restaurant Group confirmed that it has received a diligence request from the PizzaExpress owner, Wheel Topco. On Wednesday, Sky News reported that the restaurant chain is at the preliminary stages of evaluating whether to make a rival offer for Restaurant Group, which this month agreed to be bought by Apollo Global Management for just over GBP500 million. The owner of Wagamama said that Wheel Topco is evaluating a possible offer for the company. "No written or verbal indicative proposal relating to a possible offer, including as to terms, price or form of consideration, has been made to the board of TRG by Wheel Topco," it added. Restaurant Group said that if an offer is made then it will carefully consider its terms, but it noted that there is no certainty that an offer will be made for the company.
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By Sophie Rose, Alliance News reporter
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