(Correcting that Sainsbury's sales rose 1.5%.)
LONDON (Alliance News) - Share were rising at the open Tuesday, extending gains seen in London on Monday and in US and Asian markets overnight. Inflation data from the UK and US will be the economic focus for the day ahead.
Amid a busy day of UK mid-cap company news, Kantar has released its grocery market survey results earlier than normal. The market research company said Tesco sales were down 2.5% in the 12 weeks to November 8, while Asda sales were down 3.5%, Sainsbury's sales up 1.5% and Morrisons sales down 1.7%. Sainsbury's again managed to gain market share to 16.6% to 16.4%.
Meanwhile, Citigroup upgraded Tesco, according to traders, while downgrading Sainsbury's and Morrisons. Sainsbury's shares were up 1.9% after the release of the survey results. Morrisons was down 0.4%, while Tesco was up 2.2%.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 1.0% at 6,208.30
FTSE 250: up 0.7% at 16,953.78
AIM ALL-SHARE: up 0.2% at 729.47
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Hang Seng: closed up 1.2% at 22,264.25
Nikkei 225: closed up 1.2% at 19,630.63
DJIA: closed up 1.4% at 17,483.01
S&P 500: closed up 1.5% at 2,053.19
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GBP: soft at USD1.5185 (USD1.5192)
EUR: down at USD1.0654 (USD1.0708)
GOLD: down at USD1,078.96 per ounce (USD1,085.41)
OIL (Brent): up at USD44.59 a barrel (USD43.30)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Tuesday's Key Economic Events still to come
(all times in GMT)
09:00 Italy Trade Balance
09:00 UK Inflation Report Hearings
09:30 UK Consumer, Retail and Producer Price Indices
10:00 Germany ZEW Survey
10:00 EU ZEW Survey
13:05 US Redbook index
13:30 US Consumer Price Index
14:15 US Industrial Production and Capacity Utilization
15:00 US NAHB Housing Market Index
20:30 US Fed's Tarullo speech
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In the wake of the terrorist attacks in Paris, the US and France will strengthen intelligence sharing to the fullest extent allowed by law. The G-20 meeting in Antalya, Turkey, that ended Monday was supposed to address the economy. But the terrorist attack on Paris last week changed that agenda, and US President Barack Obama pledged to redouble efforts against the Islamic State of Iraq and the Levant. Islamic State claimed responsibility for the attacks on Paris that killed 129 people and wounded more than 350 Friday. Monday, French aircraft bombed ISIL's quasi-capital city of Raqqa in Syria based on information the US was able to share with them. "We're working closely with our French partners as they pursue their investigations and track down suspects," Obama said during a news conference. "France is already a strong counter terrorism partner, and today we're announcing a new agreement. We're streamlining the process by which we share intelligence and operational military information with France," he told reporters.
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British Prime Minister David Cameron announced plans to spend an additional GBP2 billion to fund the country's anti-terrorism forces. The money will be used over the next five years to buy new weapons, vehicles, protective equipment, night-fighting gear and communications technology, Cameron said in a speech at the Lord Mayor of London's Banquet. Britain needs to "increase both its hard and soft power," he said, adding that "the reality is that there are times when you do need to be able to deploy military force." Earlier Monday, Cameron told BBC Radio that British police have stopped around seven planned terrorist attacks in the last six months.
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The world's biggest lenders must build additional financial buffers to protect against destabilizing financial crises under new regulations ratified by G20 leaders. The G20's Financial Stability Board, a banking watchdog agency, published the new regulations last week in Basel, Switzerland, to oblige the banks to keep at least 18% of their risk-weighted assets available to cover losses.
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Governments among the Group of 20 countries have implemented about half of the economic growth agenda adopted by the world's leading advanced and emerging economies one year ago, the International Monetary Fund said. IMF chief Christine Lagarde, attending the G20 summit in Antalya, Turkey, urged the countries to finish implementing growth-spurring reforms agreed when leaders from the 20 countries met last year in Brisbane, Australia.
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US President Obama arrived in the Philippines Tuesday to attend an international economic summit where terrorism and maritime disputes were expected to overshadow trade discussions.
Obama was scheduled to visit a Philippine Navy ship, the US State Department said, amid an escalating row over the South China Sea, which Beijing claims almost entirely as its sovereign territory.
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BROKER RATING CHANGES
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TRADERS: CITIGROUP CUTS SAINSBURY TO 'NEUTRAL' ('BUY')
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TRADERS: CITIGROUP CUTS MORRISON TO 'SELL' ('BUY')
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TRADERS: CITIGROUP RAISES TESCO TO 'BUY' ('NEUTRAL')
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TRADERS: CREDIT SUISSE RAISES OPHIR ENERGY TO 'NEUTRAL' ('UNDERPERFORM')
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TRADERS: MACQUARIE CUTS DRAX GROUP TO 'NEUTRAL' ('OUTPERFORM')
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TRADERS: CANACCORD RAISES PREMIER OIL TO 'HOLD' ('SELL')
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TRADERS: CITIGROUP CUTS SIG TO 'NEUTRAL' ('BUY')
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SOCGEN CUTS TALK TALK TELECOM TO 'SELL' ('HOLD') - TARGET 190 (320) PENCE
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COMPANIES - FTSE 100
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easyJet reported growth in profit in its recently-ended financial year as revenue rose and it carried more passengers than the prior year, while it said the long-term outlook for the business is positive. The low-cost airline said pretax profit in the year ended September 30 grew 18% to GBP686 million from GBP581 million the year before, as revenue rose 4% to GBP4.68 billion from GBP4.52 billion. easyJet said passengers increased 6% in the year to 68.6 million, with a record load factor in August of 94.4%. Annual load factor increased by 0.9 percentage point to 91.5%. easyJet will pay a total dividend of 55.2 pence per share for the year, a 22% increase on the 45.4p it paid the prior year.
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Engineer Smiths Group said it has a resilient first quarter as the diversity of its operations helped to offset some tough trading in the oil and gas markets, which dragged on revenue in its John Crane energy services business. The company, which has operations spanning energy services, medical devices and security sensors, said underlying, constant currency revenue declined 4.0% in the first quarter to the end of October, though its group operating margin was broadly flat year-on-year.
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British Land Co reported that its net asset value, measured on the European Public Real Estate Association basis, grew by 7.5% in the first half of its financial year against the corresponding period the prior year, as UK property markets remained strong amid low interest rates and unemployment. The real estate investment trust's EPRA NAV per share amounted to 891 pence per share as of September 30, compared with 829p at the equivalent stage the year prior, which the company said was due to the strength of the markets in which it is invested, as well as its actions to improve and manage its portfolio. British Land will pay 14.18 pence per share, up from 13.84p a year before.
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Mining giant BHP Billiton said that it is reviewing the operating structure of mining joint ventures with companies including Glencore and Anglo American in the wake of the deadly Brazil mine disaster. The mining giant also said it is reviewing Samarco Mineracao, its joint iron ore operation with Vale in Brazil's Minas Gerais state, after a tailings dams burst November 5, sending a torrent into a valley below and killing at least nine people. BHP Chief Executive Officer Andrew Mackenzie told investors Monday on a conference call that the company will also assess its Antamina copper operation in Peru and its Cerrejon coal venture in Colombia.
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COMPANIES - FTSE 250
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Television and film production company Entertainment One said its pretax profit surged higher in the first half thanks to a sharp decline in financing costs, as the group said it remains confident on the second half and is on track to double the size of the business by 2020. Entertainment One said its pretax profit in the first half to the end of September rose to GBP18.1 million, up from GBP2.4 million a year earlier, as its financing costs halved and as it good a boost to its profit from its joint ventures. The company said pretax profit was up 42% to GBP39.9 million on an adjusted basis. Revenue rose to GBP337.1 million from GBP330.5 million and the group paid a 1.1 pence dividend, up from 1.0p.
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B&M European Value Retail said it swung to a profit in the first half of its financial year while growth in revenue was boosted by new store openings. The discount retailer said it made a GBP66.7 million pretax profit in the 26 weeks ended September 26, having suffered a GBP16.5 million pretax loss in the same period the year before as it was hit by higher finance costs which did not repeat in the current year. Revenue rose by more than a quarter to GBP930.3 million from GBP739.8 million. B&M will pay an interim dividend of 1.6 pence per share, a 78% increase on the 0.9p it paid the prior year.
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Oil and gas explorer Tullow Oil said the Emesek-1 exploration well in northern Kenya has reached total depth but did not find any commercial levels of hydrocarbons. The well, located in the North Lokichar basin in Block 13T, was drilled by the PR Marriott 46 Rig. The rig will now move to the South Lokichar basin to drill the Etom-2 well, which will spud in late November, Tullow said.
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A deal has been reached for US cable company Liberty Global to acquire Cable & Wireless Communications in a deal that values the London-listed telecommunications company at about GBP3.60 billion, according to a statement late Monday. The GBP3.60 billion value ascribed to Cable & Wireless, which has operations in the Caribbean and Central America, takes into account a 3.0 pence special dividend to be paid to the company's shareholders. The deal, which comes after the two companies in October confirmed they were in takeover talks, values Cable & Wireless at 81.04p per share. Shares in Cable & Wireless closed up 0.1% at 73.54p on Monday in London.
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COMPANIES - LONDON MAIN MARKET AND AIM
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The US's Ebix late Monday entered the battle to acquire Xchanging, a London-listed business processing, procurement and technology services provider, throwing its name into a hat already containing rival offers from FTSE 100 outsourcer Capita and New York-listed consultancy Computer Sciences Corp. The potential offer from Atlanta-based Ebix, a supplier of on-demand software and e-commerce services to the insurance, financial and healthcare industries, values Xchanging at 175 pence per share, equivalent to GBP450.0 million. In response, Xchanging confirmed it has begun talks with Ebix. Ebix's potential offer is higher than Capita's bid of 160p per share and Computer Sciences Corp's proposal of 170p per share. Shares in Xchanging closed up 7.1% at 180.50p on Monday.
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The restaurant group founded by designer Terence Conran is close to launching a public flotation in London which would value the group at around GBP100.0 million, Sky News reported. LDC, the private equity owner of D&D Restaurants, is to kick off a roadshow this week, run by Zeus Capital, to gauge investor appetite for a float of the business. D&D owns the Bluebird, Coq d'Argent and Skylon restaurants in London.
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COMPANIES - INTERNATIONAL
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Icahn Associates, the fund run by billionaire activist investor Carl Icahn, sold its remaining EBay stake at the same time as it revealed a 3.8% holding in the Internet auction company's spun off payments unit PayPal Holdings.
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Tuesday's Scheduled AGMs/EGMs
Eagle Eye Solutions
Animalcare Group
JPMorgan Emerging Markets Investment Trust
Smiths Group
New World Oil & Gas
Madagascar Oil
Craneware
Global Petroleum
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By Tom Waite; thomaslwaite@alliancenews.com; @thomaslwaite
Copyright 2015 Alliance News Limited. All Rights Reserved.
