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LONDON (Alliance News) - A negative close on Wall Street has led London to a flat to lower open Tuesday, despite strong earnings from Apple reported after the US market close.
UK GDP is due at 0930 BST.
In the FTSE 250, Alliance Trust said it has agreed to appoint two of the directors nominated to its board by activist shareholder Elliott Advisors, settling a spat between the two. The stock is up 1.2%.
Allied Minds leads FTSE 250 decliners, down 3.3%, after reporting a wider loss in 2014 and saying its founder will step down as chairman and later from the board.
Kier Group tops mid-cap risers, up 2.7%, after agreeing to buy UK-based infrastructure repair and maintenance services company Mouchel and announcing a rights issue of shares.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: down 0.3% at 7,080.27
FTSE 250: flat at 17,782.02
AIM ALL-SHARE: down 0.1% at 755.17
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Hang Seng: down 0.4% at 28,326.37
Nikkei 225: closed up 0.4% at 20,058.95
DJIA: closed down 0.2% at 18,037.97
S&P 500: closed down 0.4% at 2,108.92
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GBP: up at USD1.5235
EUR: up at USD1.0885
GOLD: up at USD1,201.13 per ounce
OIL (Brent): down at USD64.03 a barrel
(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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Tuesday's Key Economic Events still to come
(all times in BST)
09:30 UK Gross Domestic Product
09:30 UK Index of Services
09:30 UK BBA Mortgage Approvals
13:55 US Redbook index
14:00 US S&P/Case-Shiller Home Price Indices (YoY)
15:00 US Consumer Confidence
15:00 US Richmond Fed Manufacturing Index
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The Conservatives pushed into the lead in the daily YouGov survey ahead of the UK General Election and consolidated their lead in both the ICM and Ashcroft polls, as Labour kept pole position in the Populus poll and the Scottish National Party moved further into the lead in the latest TNS poll for Scotland.
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The total value of retail sales in Japan tumbled 9.7% on year in March, the Ministry of Economy, Trade and Industry said - coming in at JPY12.396 trillion. That missed forecasts for a decline of 7.5% following the 1.7% contraction in February.
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French unemployment rose to a record high in March, data released by the labor ministry revealed. The number of unemployed increased 15,400 or 0.4% from February to 3.51 million in March. The number of job seekers below 25 rose by 5,200 or 1% compared to February.
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The United Nations refugee agency said it is rushing critical supplies to Nepal in the wake of the devastating earthquake last week, while pledging to provide any further assistance needed. The agency is sending 11,000 plastic sheets and 4,000 solar lanterns from its warehouse in Damak, eastern Nepal, to the eastern hilly districts of Ramechhap, Okhaldhunga and Sindhuli. And later this afternoon, an additional 8,000 plastic sheets and 4,000 solar lamps are being flown to the Nepalese capital, Kathmandu, from Dubai via a cargo plane.
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Top EU officials met with Ukrainian leaders in Kiev in a bid to push the country's reform agenda forward. President Petro Poroshenko called for the implementation of a trade agreement between Ukraine and the EU as he welcomed EU President Donald Tusk and Commission President Jean-Claude Juncker outside his office. The talks came amid a surge in fighting in eastern Ukraine, including Shyrokyne, a town east of the port Mariupol, the Organization for Security and Co-operation in Europe said.
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A Saudi-led coalition carried out a new round of airstrikes on Yemeni rebels and allied military units in the south of the country, and on its Red Sea coast. In the key southern city of Aden, local residents said a coalition airstrike aimed at the mainly Shiite Houthi rebels missed its mark, hitting an apartment building and causing civilian casualties. The strike came amid ongoing clashes between Houthi forces and local fighters who have been resisting their presence in Aden, the former capital of once independent southern Yemen.
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UN Secretary General Ban Ki-moon boarded one of the ships engaged in Mediterranean Sea rescues to discuss Europe's migration crisis with Italian Prime Minister Matteo Renzi. EU foreign policy chief Federica Mogherini, a former Italian foreign minister, joined them on the San Giusto Italian Navy vessel. The EU is struggling to respond to a growing inflow of refugees in the central Mediterranean, the world's most dangerous sea migration route. Most are picked up by the Italian navy and coast guard, as well as by passing cargo ships. Ban said that the UN was ready to work with the EU to stop the flow of migrants that should begin with preventing human trafficking.
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The Maryland National Guard started moving into Baltimore Monday night to help control city-wide rioting, looting and arson. Up to 5,000 armed troops will be deployed, in addition to 500 regional police officers from around Maryland, state officials said in a broadcast news conference. At the request of the city of Baltimore, Governor Larry Hogan declared the state of emergency that enabled calling up the National Guard.
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BROKER RATING CHANGES
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SOCGEN STARTS IAG WITH 'BUY' - PRICE TARGET 750 PENCE
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COMMERZBANK RAISES IAG TO 'BUY' ('HOLD') - PRICE TARGET 10 (8) EUR
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TRADERS: GOLDMAN RAISES MICHAEL PAGE TO 'BUY' ('NEUTRAL')
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TRADERS: CITIGROUP INITIATES CARPETRIGHT WITH 'BUY' - TARGET 600 PENCE
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COMPANIES - FTSE 100
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BP said its pretax profit for the first quarter of 2015 was substantially lower than a year ago after its upstream division was hit by the lowest quarterly oil price since the start of 2009, and reduced activity, partially offset by the downstream division which experienced a lift in earnings. The oil and gas major reported a pretax profit of USD2.27 billion in the first quarter of 2015, significantly down from USD5.27 billion a year earlier as revenue tumbled to USD54.92 billion from USD92.98 billion as its upstream division took a substantial hit, partially due to lower oil prices and reduced activity. BP said its quarterly dividend will be 10.00 cents per share. "The dividend is the first priority within our financial framework, and the board is committed to maintaining it, as we have today," said BP Group Chief Executive Bob Dudley.
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Royal Dutch Shell and French rival Total have delayed multi-billion dollar offshore oil projects in western Africa as part of a bid to rein in costs and shore up cash flows following the plunge in the oil price, the Financial Times reported. Shell has postponed a final investment decision on the offshore Bonga South West project in Nigeria to next year. The project is estimated to require around USD12 billion of spending by the Anglo-Dutch oil giant.
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Whitbread said its pretax profit rose in its recently-ended financial year as sales in both its Premier Inn and Costa Coffee chains continued to rise, and it has started looking for a new chief executive as Andy Harrison told the board he will retire by the end of the current financial year. Separately, home goods retailer Dunelm Group said Harrison will become chairman on July 7 when Geoff Cooper retires. Harrison is already a non-executive director on the company's board. Whitbread reported pretax profit for the year ended February 26 of GBP463.8 million, up from GBP347 million the year before, as revenue increased 14% to GBP2.6 billion from GBP2.3 billion. Sales at Premier Inn grew 15% while Costa Coffee revenue rose 18%. The company will pay a total dividend of 82.2 pence, up 19% from 68.8p the year before.
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St James's Place reported an increase in funds under management in the first quarter of its financial year, after taking in GBP1.30 billion of net inflows, boosted by higher limits for individual savings accounts and greater flexibility for people saving for retirement in the UK. In a statement, the British wealth management and financial advice company said its funds under management increased by 7% to GBP55.8 billion over the quarter ended March 31.
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COMPANIES - FTSE 250
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Allied Minds reported a wider loss for 2014 as it spent more on research and development, but its key value measure rose strongly. The US-focused science and technology development and commercialisation company reported a net loss of USD45.5 million for 2014, compared with a loss of USD34.5 million a year earlier, as a rise in both R&D and selling, general and administrative expenses more than offset a rise in revenue to USD7.7 million from USD2.9 million. Allied Minds also said that Peter Dolan will become its non-executive chairman from its annual general meeting on May 28, replacing founder Mark Pritchard who will remain on the board in an executive role until he steps down late in the year.
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Henderson Group reported a 10% increase in assets under management in the first quarter of 2015, driven by what it said were record quarterly net inflows of GBP3.6 billion, and it also agreed to sell its 40% stake in TH Real Estate to TIAA-CREF for GBP80 million, giving its cash position a boost. In a statement, the fund manager said its assets under management increased to GBP89.4 billion from GBP81.2 billion in the three months ended March 31. Retail net inflows amounted to GBP2.90 billion, while institutional net inflows amounted to GBP656 million.
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Alliance Trust said it has agreed to appoint two of the directors nominated to its board by activist shareholder Elliott Advisors, a move that marks a compromise in their disagreement ahead of the trust's annual meeting of shareholders. In a statement, Alliance Trust said that it has agreed "certain mutual non-disparagement undertakings" with Elliott and that the shareholder will not call a general meeting or "seek to agitate" against the company, board or management in public until after the trust's 2016 annual meeting at the earliest. The trust said it has agreed to appoint Anthony Brooke, the former SG Warburg executive, and Rory Macnamara, previously of Morgan Grenfell, to its board. Elliott had also proposed the appointment of Peter Chambers, the former chief executive of Legal & General Investment Management, but he has agreed to stand aside as a candidate.
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Property and construction services company Kier Group said it has struck a deal to acquire UK-based infrastructure repair and maintenance services company Mouchel. Kier said it will pay GBP265 million in cash to MRBL, the holding company for the Mouchel business, with the deal to be backed by a GBP340 million fully-underwritten rights issue. Kier will offer shares at 858 pence per share on the basis of five new shares for every seven existing shares held.
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COMPANIES - LONDON MAIN MARKET AND AIM
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Pinnacle Technology Group said it had raised about GBP0.9 million by placing 13.2 million new shares at 6.5 pence each, a placing that was done to facilitate a strategic investment by MXC Capital. MXC said it subscribed for 5.9 million of the placing shares, which gives it a 10% stake in Pinnacle's enlarged share capital. It said it has also been granted seven-year warrants over a further 5% of Pinnacle's share capital.
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COMPANIES - INTERNATIONAL
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Apple said its second quarter profit rose 33% from last year, driven by strong sales of iPhone and Mac as well as all-time record performance of the App Store. The company's quarterly earnings per share also breezed past Wall Street expectations as did its quarterly sales. "We are thrilled by the continued strength of iPhone, Mac and the App Store, which drove our best March quarter results ever," said Tim Cook, Apple's CEO. "We're seeing a higher rate of people switching to iPhone than we've experienced in previous cycles, and we're off to an exciting start to the June quarter with the launch of Apple Watch." Apple also said its board has authorized an increase of more than 50% to the company's program to return capital to shareholders. Under the expanded program, Apple plans to utilize a cumulative total of USD200 billion of cash by the end of March 2017.
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German lender Commerzbank reported that preliminary net profit for the first quarter of 2015 improved to EUR366 million from last year's EUR200 million. It plans to sell EUR1.4 billion of shares in an accelerated offering to boost capital.
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Spanish lender Banco Santander said its attributable profit climbed 32% in the first quarter to EUR1.717 billion from EUR1.303 billion last year. The profit growth would have been 22% without exchange rate effects.
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Dutch consumer electronics company Koninklijke Philips reported its net income for the first quarter slid to EUR100 million from EUR137 million last year, mainly due to higher restructuring and acquisition-related charges and other items. For the quarter, group sales totalled EUR5.339 billion, compared to EUR4.692 billion a year ago. The group said its sales grew 2% on a comparable basis, driven by Western Europe and growth geographies.
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Honda Motor Co reported its net income for the first-quarter of 2015 declined 43% to JPY97.8 billion from JPY170.5 billion in the prior year. But net sales for the quarter grew 8.3% to JPY3.354 trillion from last year's JPY3.097 trillion.
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French oil and gas giant Total reported that first-quarter net income group share decreased 20% to USD2.66 billion from USD3.34 billion in the prior-year quarter. Sales for the quarter decreased 30% to USD42.31 billion from USD60.69 billion in the previous year.
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Tuesday's Scheduled AGMs/EGMs
Greencoat UK Wind
Foreign & Colonial Investment Trust
Murray International Trust
Servelec
Rexam
JPMorgan Senior Secured Loan Fund
Maintel
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By Tom Waite; thomaslwaite@alliancenews.com; @thomaslwaite
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