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(Alliance News) - Stocks in London are called to open lower on Monday, amid political deadlock across the Channel in France.
The left-wing New Popular Front said it has a mandate to govern after it pulled off a surprise win in the second round of the French parliamentary elections on Sunday, with the far right falling to third place, according to initial projections.
The NFP, a new alliance that has brought together Jean-Luc Melenchon's hard-left La France Insoumise (France Unbowed), the Socialist Party, the Communist Party, the Ecologists and several smaller left-leaning groups, is projected to gain 177 to 198 of the 577 seats in the lower house, or National Assembly.
In early corporate news, brewer Carlsberg is looking to buy Britvic in a sweetened GBP3.3 billion deal.
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 0.3% at 8,183.00
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Hang Seng: down 1.8% at 17,487.79
Nikkei 225: closed down 0.3% at 40,780.70
S&P/ASX 200: closed down 0.8% at 7,763.20
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DJIA: closed up 67.87 points, 0.2%, at 39,375.87
S&P 500: closed up 0.5% at 5,567.19
Nasdaq Composite: closed up 0.9% at 18,352.76
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EUR: lower at USD1.0826 (USD1.0828)
GBP: higher at USD1.2807 (USD1.2806)
USD: lower at JPY160.61 (JPY161.70)
GOLD: lower at USD2,382.50 per ounce (USD2,385.01)
OIL (Brent): lower at USD86.27 a barrel (USD87.85)
(changes since previous London equities close)
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ECONOMICS
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Monday's key economic events still to come:
1815 SAT UK Bank of England MPC external member Jonathan Haskel speaks
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Construction activity in Ireland continued to decline in June amid a fall in commercial property building, data published by S&P Global showed Monday. The headline seasonally adjusted BNP Paribas Real Estate Ireland construction total activity index fell to 47.5 points in June from 49.8 in May. Falling further from the 50-point mark separating growth from contraction, it indicates the slowdown in construction activity accelerated. "Underlying data suggested that a renewed fall in commercial activity was a key factor behind the latest reduction in total activity. Work on commercial projects decreased sharply, ending a three month sequence of growth. A rapid fall in civil engineering activity was also recorded in June," S&P Global said. The commercial activity index declined sharply to 43.3 points in June from 51.4 in May. The housing activity index, however, improved to 52.4 points in June from 52.0 in May. The new orders index declined to 51.8 points in June from 52.9 in May.
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Germany's trade surplus improved in May, with imports declining faster than exports, according to figures from Destatis on Monday. Germany's trade surplus stood at EUR24.9 billion in May, widened from EUR22.2 billion in April and EUR16.8 billion a year ago. On month, exports fell by 3.6% in May, having risen by 1.7% in April from March. Imports fell by 6.6% in May from April, after edging up 1.2% a month earlier.
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BROKER RATING CHANGES
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RBC raises Melrose Industries to 'outperform' (sector perform) - price target 650 pence
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UBS cuts GSK to 'neutral' (buy) - price target 1,580 (2,040) pence
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COMPANIES - FTSE 100
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Unite said that demand for its accommodation remains "strong". Across the company's portfolio, 94% of rooms are now reserved for the 2024/25 academic year, which it said is ahead of its typical leasing pace, but slightly below the record reservation rates last year of 98%. Looking ahead, Unite said it is confident in delivering 98% to 99% occupancy in financial 2025. Chief Executive Joe Lister said: "Student demand remains strong from both domestic and international students, reflecting the continued appeal of UK higher education, our fixed-priced, all-inclusive offer and the growing shortage of high-quality student homes."
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Ocado and AEON announced the continued expansion of their partnership, with plans to construct a third customer fulfilment centre in Kuki-Miyashiro, the Saitama prefecture of Japan. Ocado entered an exclusive partnership with AEON in 2019 to develop the online operations of the AEON NEXT grocery business using the Ocado Smart Platform. The new facility is expected to go live in 2027.
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Burberry Group is mulling job cuts, with hundreds of roles possibly on the chopping block, the Telegraph reported. The luxury fashion firm has begun a 45-day consultation period, in a sign that hundreds of roles could be cut. The Telegraph reported employees are concerned that up to 400 jobs could go, largely in UK offices. Burberry employs around 9,000 workers across the globe. The stock is down 56% over the past year and is around 37% lower so far in 2024. Its share price slide has meant it is the smallest FTSE 100 stock by market capitalisation, putting its status in the blue-chip index under threat. Burberry has a market value of GBP3.15 billion.
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COMPANIES - FTSE 250
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Carlsberg to buy Britvic for GBP3.3 billion, as Britvic hails a very positive trading update and outlook. Britvic, which is a Hemel Hempstead, England-based soft drinks maker, behind brands such as Robinsons squash, said Britvic shareholders will be entitled to receive 1,315 pence for each share. This includes a special dividend of 25p per Britvic share and represents a 36% premium to Britvic's closing price of 970p on June 19, being the closing price on the day prior to speculation around a possible offer. Britvic Non-Executive Chair Ian Durant said: "The proposed transaction creates an enlarged international group that is well-placed to capture the growth opportunities in multiple drinks sectors. Crucially, to remain competitive at a time when the market is being shaped by the trend of increasing consolidation among bottling partners, Carlsberg's agreement with PepsiCo provides the combined group with a strong platform for continued success." The board is recommending shareholders to vote for the offer. In a separate announcement, Britvic said that revenue in its third quarter, ended June 30, rose 6.3% annually to GBP502.9 million. CEO Simon Litherland said: "Demand for our brands remains strong, as we enter the key summer trading period. We have an exciting programme of marketing campaigns, giving us confidence that we will deliver an excellent full year performance."
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OTHER COMPANIES
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Marston's announced the sale of its remaining non-core brewing assets to create a business entirely focused on pubs. It said it will sell its 40% interest in Carlsberg Marston's to a subsidiary of Carlsberg for GBP206 million. It said this will establish a purely focused pub business with a "strong position in the UK market and significant opportunities for further growth." CEO Justin Platt commented: "Today's announcement represents a significant milestone for Marston's as we realise our stake in CMBC. In my first six months with the business, it has become very clear to me that our core capability and key opportunity to unlock value for shareholders is in driving a focused and successful pub business." Carlsberg expects the transaction to close in the third quarter of 2024.
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By Sophie Rose, Alliance News senior reporter
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