Last checked at 
(Alliance News) - Stocks in London were called to open higher on Wednesday, as investors take their cue from a rally on Wall Street.
"Another hawkish speech from the Federal Reserve Chair Jerome Powell turned into a risk rally yesterday. Equities gained, and the bond yields fell," said Swissquote Bank's Ipek Ozkardeskaya.
Powell, speaking at The Economic Club of Washington, reasserted that the US central bank will need to keep raising interest rates.
"We think that we'll need to do further rate increases and we think we will need to hold policy at a restricted level for some time," Powell said, echoing his language at a press conference last week.
Last Wednesday, the US central bank lifted interest rates by 25 basis points, taking the target range for the federal funds rate to 4.50% to 4.75% from a previous range of 4.25% to 4.50%.
When asked on Tuesday whether the US Federal Reserve would have still lifted rates by 25 basis points had members known about Friday's strong US jobs data, Powell said: "We didn't expect it to be this strong but I would say it kind of shows you why we think this will be a process that takes a significant period of time."
Ozkardeskaya commented: "Investors focused on the fact that he appeared just as hawkish as he has always been, that he didn't promise a 50bp hike at next meeting, and that he said that the Fed won't actively shrink its balance sheet for at least a few years."
In early UK corporate news, Barratt Developments reported double-digit interim revenue and profit growth but warned of lower a house reservation rate at the start of 2023, while JD Sports Fashion completed some disposals to fellow retailer Frasers Group.
Here is what you need to know at the London market open:
----------
MARKETS
----------
FTSE 100: called up 42.0 points, 0.5%, at 7,906.71
----------
Hang Seng: down 0.1% at 21,272.67
Nikkei 225: closed down 0.3% at 27,606.46
S&P/ASX 200: closed up 0.4% at 7,530.10
----------
DJIA: closed up 265.67 points, or 0.8%, at 34,156.69
S&P 500: closed up 52.92 points, or 1.3%, at 4,164.00
Nasdaq Composite: closed up 226.34 points, or 1.9%, at 12,113.79
----------
EUR: up at USD1.0736 (USD1.0700)
GBP: up at USD1.2053 (USD1.2015)
USD: flat at JPY131.16 (JPY131.17)
GOLD: up at USD1,877.99 per ounce (USD1,875.35)
OIL (Brent): up at USD83.75 a barrel (USD82.75)
----------
ECONOMICS
----------
Wednesday's key economic events still to come:
07:00 EST US MBA mortgage applications survey
US Fed New York President John Williams speaks
----------
Inflation is set to add GBP18.2 billion to UK non-food retail sales this year, a report said. Sales values are expected to hit GBP249 billion in 2023, but the 2.6% increase – or an additional GBP18.2 billion of spending on last year – will be driven entirely by rising consumer prices, according to the Ecommerce Delivery Benchmark Report by Auctane and the consultancy Retail Economics. UK retail sales volumes are set to fall by 4.9% on last year due to shoppers having to spend more to get less for their money, with retail inflation expected to hit 7.5% over the year ahead.
----------
The UK will narrowly avoid a recession this year, but there will be little respite for under-pressure families – with around seven million households expected to struggle to pay energy and food bills, according to an economic think tank. The National Institute of Economic & Social Research has forecast that the UK will swerve a technical recession – as defined by two or more quarters of falling gross domestic product in a row – not just in the final three months of 2022, but also throughout 2023.
----------
BROKER RATING CHANGES
----------
JPMorgan raises Trustpilot to 'overweight' (neutral) - price target 150 (100) pence
----------
JMPorgan places Kerry Group on 'positive catalyst watch'
----------
COMPANIES - FTSE 100
----------
Housebuilder Barratt Developments reported strong growth in its half-year ended December 31, with revenue rising 24% year-on-year to GBP2.78 billion from GBP2.25 billion. Pretax profit rose 16% to GBP501.5 million from GBP432.6 million, despite operating margin narrowing to 17.8% from 19.3%. Total home completions rose 6.9% to 8,626. Barratt said the strong half-year was due to its "significant" forward order book at the end of June. However, it has seen lower reservation rates for future sales in the new financial year, particular in the second quarter. "Whilst we have seen some early signs of improvement in current trading during January, we will need to see continued momentum over the coming months before we can be confident that these challenging trading conditions are easing," Barratt said. The housebuilder scaled back payouts in line with its planned reduction in dividend cover, with the interim dividend falling 10.2 pence, a 8.9% decrease from 11.2p a year before. Barratt expects to complete 16,500 to 17,000 homes in all of financial 2023.
----------
JD Sports said it has completed the divestment of some brands to Frasers Group, namely, the businesses which trade as Tessuti (including Xile), Scotts, Choice, Giulio and Cricket. The transactions were in line with the terms announced in December. However, the sports clothing retailer said that Rascal Clothing Ltd will no longer be part of the transaction, given that one of its founders exercised a pre-emption right. "The group expects to complete the divestment of the business which trades as Topgrade Sportswear in due course," JD said.
----------
Severn Trent said there have been "no material changes" to its business performance in the current year since its interim results back in November. Its guidance remains unchanged. The water utility announced its green power business's acquisition of Andigestion, which operates two food waste anaerobic digestion plants in southwest England. It expects the purchase to add another 45 gigawatt hours per year to its energy generation.
----------
DCC said profit in its financial third quarter, which ended on December 31, was in line with expectations and ahead of the previous year. DCC expects operating profit growth in the year to March 31 to be in line with current market consensus.
----------
COMPANIES - FTSE 250
----------
PZ Cussons shared strong interim results. In the six months to December 3, the consumer goods and healthcare products firm said revenue rose 19% to GBP336.9 million from GBP283.7 million a year before, led by the Childs Farm acquisition. Pretax profit surged 72% to GBP40.5 million from GBP23.5 million. The interim dividend was unchanged at 2.67p. "We remain mindful of significant macro-economic uncertainty, including the continued depreciation of the Nigerian naira, but expect to report FY23 adjusted profit before tax in line with current market estimates," PZ said.
----------
International Distributions Services' Royal Mail unveiled the first postage stamps to feature the image of King Charles III, following his ascension to the throne last September. The new so-called "definitive stamp" – intended for everyday use and consisting solely of the monarch's head, the stamp's value and a barcode – will go on general sale from April 4. Retailers will continue to sell their existing stamps featuring the late queen, and be supplied with the new ones when current Royal Mail stocks have run out. The image shows the King wearing no crown.
----------
OTHER COMPANIES
----------
Online-focused clothing retailer Sosandar announced a proposed share placing to raise a minimum of GBP4 million. It will place no fewer than 18.2 million shares at 22 pence each. There will also be a retail offer for around GBP500,000. The firm will use the funds to invest in stock to further its omni-channel strategy. This increase the provision of its in-store product range with partners such as Sainsbury's.
----------
By Elizabeth Winter, Alliance News senior markets reporter
Comments and questions to newsroom@alliancenews.com
Copyright 2023 Alliance News Ltd. All Rights Reserved.
