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(Alliance News) - Stocks in London are expected to open lower on Monday, with markets seeing little reason to head higher in a quiet start to the week.
Inflation data will be in focus as the week progresses, with readings from China on Wednesday and the US on Thursday.
"This week's intensively watched inflation data, particularly the US CPI, will need to show that the previous month's drop was not a one-time event; otherwise, more Fed action might be needed to control it," SPI Asset Management analyst Stephen Innes commented.
In early economic news, UK house prices fell for the fourth consecutive month in July, according to Halifax data.
However, the mortgage lender noted the sector is showing some grit despite tough market conditions.
In early corporate news, recruitment firm PageGroup reported that its interim profit has plummeted by 45%. Meanwhile, Card Factory said it expects its annual results to be materially ahead of expectations.
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 0.4% at 7,537.2
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Hang Seng: down 0.3% at 19,490.61
Nikkei 225: closed up 0.2% at 32,254.56
S&P/ASX 200: down 0.2% at 7,309.20
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DJIA: closed down 150.27 points, or 0.4%, at 35,065.62
S&P 500: closed down 23.68 points, 0.5%, at 4,478.03
Nasdaq Composite: closed down 50.48 points, 0.4%, at 13,909.24
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EUR: down at USD1.0984 (USD1.1037)
GBP: down at USD1.2724 (USD1.2765)
USD: up at JPY142.19 (JPY141.82)
Gold: down at USD1,936.98 per ounce (USD1,940.94)
(Brent): up at USD86.08 a barrel (USD85.77)
(changes since previous London equities close)
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ECONOMICS
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Monday's key economic events still to come:
17:00 BST UK BoE virtual Q&A with Chief Economist Huw Pill
08:30 EDT US Federal Reserve Governor Michelle Bowman and FRB Atlanta President Raphael Bostic speak
10:00 EDT US employment trends index
15:00 EDT US consumer credit
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UK house prices fell for the fourth consecutive month in July, according to Halifax. The Halifax house price index fell 0.3% on-month in July, having fallen 0.1% in June. In June, the typical UK property cost GBP285,044, down from around GBP285,932 the month before. On an annual basis, prices fell 2.4% in July, easing from a 2.6% fall in June. "These figures add to the sense of a housing market which continues to display a degree of resilience in the face of tough economic headwinds," said Kim Kinnaird, Halifax Mortgages director.
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UK firms are hesitant to recruit new staff because of concerns over the economic outlook, research suggests. The Recruitment & Employment Confederation reported a fall in permanent staff appointments, blaming a weaker economic climate and reduced market confidence. A survey of 400 recruitment agencies found permanent staff appointments fell at the steepest pace for three years. There were frequent reports of redundancies and hiring freezes, while competition for skilled workers and the increased cost of living continued to place upward pressure on rates of starting pay during July, the REC found. Chief Executive Neil Carberry said: "The jobs market overall remains fairly robust, with vacancies and pay still rising and unemployment low, but there is a sense in today's report that the economy will need some growth soon to sustain this positive picture. Permanent hiring has been slowing all year. To some extent this is normalisation as the post-pandemic boom abates, but it is also driven by uncertainty."
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BROKER RATING CHANGES
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JPMorgan raises Rolls-Royce to 'neutral' (underweight) - price target 235 (90) pence
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RBC cuts Unite Group to 'sector perform' (outperform) - price target 1,100 pence
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COMPANIES - FTSE 100
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Sky News reported that Inflexion, which has backed companies such as Goals Soccer Centres and Mountain Warehouse, is on a list of bidders in talks with Haleon about buying the Nicotinell brand. In July, Bloomberg had reported that Haleon was exploring a potential divestment of some smoking cessation products, including the Nicotinell brand of nicotine gum, patches and lozenges. Bloomberg sources said the business is attracting interest from both investment firms and consumer companies and could be worth up to USD800 million in a sale, as Haleon reportedly seeks to offload non-core businesses. However, Sky News said that bidders were hoping to pay "substantially less" than the USD800 million price tag.
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COMPANIES - FTSE 250
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Clarkson reported that revenue in the six months ended June 30 rose to GBP321.1 million from GBP266.7 million a year earlier. The shipping services provider said its pretax profit rose to GBP52.2 million from GBP42.0 million. The company upped its interim dividend to 30p from 29p. Looking ahead, Clarkson's expectations for the year were left unchanged, with continued confidence in the medium-term outlook. It noted that current comparative strength in sterling outlook for the second half, compared to a much weaker sterling performance in the second half of 2022, is likely to be a headwind for the second half of 2023. Chief Executive Officer Andi Case said: "I have great confidence in the outlook for Clarksons, which has been built to maximise value from the global mega-trends of the green transition, digitalisation and ever more complex global trade dynamics."
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PageGroup said revenue in the first half of 2023 rose by 5.8% to GBP1.03 billion from GBP977.3 million a year earlier. However, the recruitment firm's pretax profit fell by 45% to GBP63.3 million from GBP114.5 million. PageGroup announced an interim dividend of 5.13p, up from 4.91p year-on-year, as well as a special dividend of 15.87p, down from 26.71p. Looking ahead, the company left its outlook unchanged, expecting full year operating profit in line with previous guidance. "[Europe, the Middle East and Africa] delivered the standout result, delivering record H1 gross profit against a particularly strong comparator across the region. However, tough market conditions continued in Asia, the UK and the US," said Nicholas Kirk.
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OTHER COMPANIES
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Card Factory noted the positive start to its financial year has continued. The Wakefield, England-based greeting cards retailer's financial year runs to the end of January. It said trading in the first six months, to July 31, was materially ahead of the board's expectations. It warned that the macro backdrop continues to be "uncertain", however it expects the full year results to be materially ahead of its previous expectations.
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By Sophie Rose, Alliance News reporter
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