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(Alliance News) - Stocks in London were set to open flat on Thursday, with market sentiment cautious amid fears that interest rates have further to rise across the globe.
Risk appetite had been damped on Wednesday as a slump in Chinese exports caused concern about a global economic slowdown and another central bank enacted a surprise interest rate.
The Bank of Canada defied expectations and lifted its benchmark rate, following in the footsteps of the Reserve Bank of Australia earlier this week.
"With the Federal Reserve, ECB, and Bank of Japan due next week and this week's hikes pointing to further interest rate pain, bets about a Fed pause next week are being taken off the table over concern the Fed may well follow suit," said CMC Markets' Michael Hewson.
In early UK company news Thursday, M&G celebrated strong net inflows from its Wholesale Asset Management division in the first quarter, and Pershing Square announced a USD100.0 million share buyback. Wizz Air hailed its recently concluded year of "significant growth", expecting to return to net profit in the current financial year.
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 6.8 points, 0.1%, at 7,631.14
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Hang Seng: up 7.7 points at 19,259.65
Nikkei 225: closed down 0.9% at 31,641.27
S&P/ASX 200: closed down 0.3% at 7,099.70
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DJIA: closed up 0.3%, at 33,665.02
S&P 500: closed down 0.4% at 4,267.52
Nasdaq Composite: closed down 1.3% at 13,104.90
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EUR: up at USD1.0736 (USD1.0705)
GBP: flat at USD1.2457 (USD1.2459)
USD: down at JPY139.75 (JPY139.85)
Gold: down at USD1,947.04 per ounce (USD1,954.11)
Oil (Brent): down at USD76.95 a barrel (USD77.24)
(changes since previous London equities close)
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ECONOMICS
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Thursday's key economic events still to come:
US President Joe Biden hosts UK PM Rishi Sunak at White House
11:00 CEST EU gross domestic product
11:00 IST Ireland consumer price index
08:30 EDT US unemployment insurance weekly claims report
16:30 EDT US foreign central bank holdings
16:30 EDT US federal discount window borrowings
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UK Prime Minister Rishi Sunak will meet President Joe Biden at the White House on Thursday for talks during which he will also voice unstinting support for Ukraine, as the young Conservative leader wages an often uphill battle to show the UK's post-Brexit relevance. Opening his two-day trip, Sunak announced that Britain would hold the world's first summit on artificial intelligence in the second half of the year. The Ukraine war is expected to dominate his conversations with Biden, with Britain joining the US in championing robust military support to Kyiv. The visit comes as Russia and Ukraine trade accusations over who blew up the large Kakhovka dam, triggering devastating floods. The US and Britain have not yet identified a culprit.
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The UK Financial Conduct Authority said it will introduce some "tough" new rules for marketing cryptoassets. The new advertising rules will come into play on October 8. They will mean crypto firms must ensure that people have the appropriate knowledge and experience to invest in crypto. Those promoting crypto must also put in place clear risk warnings and ensure adverts are clear, fair and not misleading. As part of these measures, the UK watchdog said that "refer a friend" bonuses will be banned.
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BROKER RATING CHANGES
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Citigroup raises Rio Tinto to 'buy' (neutral) - price target 6,000 pence
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JPMorgan places Lloyds Banking on 'negative catalyst watch'
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JPMorgan places NatWest on 'positive catalyst watch'
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COMPANIES - FTSE 100
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London-based investment manager M&G said it started 2023 with strong momentum carried over from the previous year. At the end of March, its assets under management and administration edged up to GBP344 billion from GBP342 billion at the end of 2022. It saw net client outflows of GBP1.1 billion during the quarter. Excluding heritage, it saw net inflows of GBP400 million, which was down from GBP1.6 billion a year before. "I am particularly encouraged by the GBP1.0 billion net client inflows achieved in Wholesale Asset Management in just three months. Thanks to this success, we more than offset the expected redemptions from institutional clients and drove inflows into high-margin propositions," said CEO Andea Rossi.
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Bill Ackman's Pershing Square announced a share buyback programme for USD100.0 million of its shares on the London Stock Exchange and Euronext Amsterdam. "The program is expected to be accretive to NAV per share and will reduce PSH's capital," the investment company said.
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COMPANIES - FTSE 250
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Budget airline Wizz Air said its recent financial year ended March 31 was one of "significant growth", despite the hit from higher fuel prices and structural capacity issues at airports. Revenue more than doubled to EUR3.90 billion from EUR1.66 billion, as pretax loss narrowed to EUR5674.6 million from EUR641.5 million. Passengers increased 88% to 51.07 billion, while load factor improved to 87.8% from 78.1%. "As we look ahead, we are optimistic for the current financial year and our focus continues to be on returning to net profit in [financial 2024]," said CEO Jozsef Varadi. Trading in the first financial quarter has been strong, with load factors above 90% and "attractive" pricing, he added. Net profit is expected between EUR350 and EUR450 million in the whole year, subject to revenue performance over the summer and the second half. Wizz, like most airlines, has limited visibility for the second half, Varadi noted.
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OTHER COMPANIES
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PetroTal said vessels that provide services to the company are being affected by an "illegal and violent" river blockade by indigenous activists in Puinahua Canal in Peru. The Indigenous Association for Development & Conservation of Bajo Puinahua has been engaging in a blockade since Saturday, blocking all ships providing services to the firm - including barges that transport oil and vessels carrying critical camp supplies. "Aidecobap is using aggressive actions which are endangering the lives of vessel crew and local residents. The blockade ignores the recently signed agreements," the Alberta, Canada-based oil and gas company said. The indigenous rights group had instituted a blockade late last year, and had reportedly taken hostage the crew of a barge travelling to Brazil with crude oil bought from PetrolTal.
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Environmental campaigners will go to the UK High Court to challenge plans to begin gas drilling in rural Surrey. Campaigners from the group Protect Dunsfold and Waverley Borough Council are bringing legal action over a government decision to allow an exploratory oil and gas well to be dug near the village of Dunsfold in Surrey. UK Housing Minister Stuart Andrew approved the plans for UK Oil & Gas to explore a site in Dunsfold in June 2022. The proposed site is located in the Surrey Hills, in an area of great landscape value, and sits on the border of an area of outstanding natural beauty.
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By Elizabeth Winter, Alliance News senior markets reporter
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