(Alliance News) - Stocks in London opened lower on Tuesday, following mixed trading in Asia and the US.
"Markets continue to square dance around a dozen variables, including a busy week of earnings reports, the start of the typical 'end-of-month' data mash, debt ceiling concerns, a possible Bank of Japan market-moving event, and the US Federal Reserve and the European Central Bank next week," said Stephen Innes, managing partner at SPI Asset Management.
The dollar will be in focus in the coming days, with a US gross domestic product reading due at the end of the week.
In the final three months of 2022, US GDP expanded by 2.6% from the preceding quarter in the final three months of 2022. Markets are expecting GDP growth to slow to 2.0% in the first quarter of 2023, according to FXStreet.
Early Tuesday in London, Premier Inn-owner Whitbread reported a strong set of results, boosted by a rebound in demand.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: down 33.07 points, or 0.4%, at 7,881.06
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Hang Seng: closed down 1.8% at 19,611.63
Nikkei 225: closed up 0.1% at 28,620.07
Financial markets in Sydney closed for Anzac Day holiday
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DJIA: closed up 66.44 points, 0.2%, at 33,875.402
S&P 500: closed up 0.1% at 4,137.04
Nasdaq Composite: closed down 0.3% at 12,037.20
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EUR: higher at USD1.1051 (USD1.1026)
GBP: higher at USD1.2478 (USD1.2457)
USD: lower at JPY134.20 (JPY134.38)
Gold: higher at USD1,994.71 per ounce (USD1,982.78)
(Brent): higher at USD82.60 a barrel (USD82.10)
(changes since previous London equities close)
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ECONOMICS
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Tuesday's key economic events still to come:
11:00 BST UK CBI industrial trends survey
08:55 EDT US Johnson Redbook retail sales index
09:00 EDT US house price index
10:00 EDT US new residential sales
10:00 EDT US Richmond Fed business activity survey
10:00 EDT US consumer confidence index
16:30 EDT US API weekly statistical bulletin
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UK public sector net borrowing totalled GBP20.71 billion in March. Public sector net borrowing, excluding public sector banks, totalled GBP21.5 billion, GBP16.3 billion more than in March last year. According to the Office for National Statistics, this was the second-highest March borrowing since monthly records began in 1993. In March, the UK central government received GBP81.0 billion in taxes and other income, 2.0% more than in March 2022. However, over the same period, spending increased by 17% to GBP104.7 billion. The ONS said this, in part, reflected the cost of the combined energy support schemes provided to households and businesses in March.
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BROKER RATING CHANGES
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JPMorgan raises Smith & Nephew price target to 1,557 (1,243) pence - 'neutral'
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Goldman raises Aston Martin price target to 212 (211) pence - 'neutral'
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JPMorgan raises Ryanair price target to 22.50 (22) EUR - 'overweight'
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COMPANIES - FTSE 100
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Associated British Foods reported "very good" retail footfall and a better-than-expected margin at Primark in the 24 weeks ended March 4. During the half, pretax profit climbed to GBP644 million from GBP635 million the year prior. Revenue from continuing operations jumped 21% to GBP9.56 billion from GBP7.88 billion. Chief Executive George Weston said the period was marked by "extreme and volatile" inflation in all its business. He noted the company has taken "considerable" action to mitigate these costs, however, through operational cost savings and pricing. Looking forward, AB Foods said the continued recovery from customers of its rising input costs remains a "priority". For the full-year, the company continues to expect adjusted operating profit and adjusted earnings per share to be "broadly" in line with the year prior. AB Foods declared an interim dividend of 14.2 pence per share.
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Whitbread delivered a "fantastic" set of results as market demand recovered, Chief Executive Dominic Paul said. In the financial year that ended March 2, pretax profit totalled GBP374.9 million, multiplied from GBP58.2 million the year before. Whitbread said this was above pre-pandemic levels, driven primarily by its Premier Inn UK division. Revenue surged to GBP2.63 billion from GBP1.70 billion. The company recommended a final dividend of 49.8 pence per share. It also announced a GBP300 million share buyback programme. Whitbread said its current trading remains strong, despite macroeconomic uncertainty.
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COMPANIES - FTSE 250
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IWG reported record quarterly revenue in the first quarter of 2023. The flexible workspace provider posted revenue of GBP760 million, up 20% from GBP609 million the previous year in constant currency. IWG said the growth was driven by continuing global demand for hybrid working solutions and by the acquisition of Instant Group in March 2022. IWG signed a total of 170 new centre deals in the quarter, compared to 51 the year prior. It expects most of these to open through the course of 2023 and to then contribute to earnings before interest, tax, depreciation and amortisation "gradually" as centre revenue builds. Looking forward, IWG said: "Whilst we continue to see higher demand for hybrid working solutions globally with companies reducing their real estate costs and responding to the needs of their employees, there are also macroeconomic headwinds which can impact demand...We remain cautiously optimistic about the outlook for 2023 and do not change our financial outlook from our statement at the full-year results on 7 March 2023. We are confident that Ebitda will remain in line with management's expectations with net debt falling during the year."
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Quilter reported asset under management and administration at the end of March stood at GBP101.9 billion, up 2% from the end of December. This reflect net inflows and a "modest" pick-up in equity market and "slightly" lower bond yields in the quarter, the wealth manager explained. Net inflows totalled GBP313 million, below the prior year's GBP1.05 billion. Quilter said the annual comparison reflected the period prior to the start of the conflict in Ukraine. It noted that first quarter net inflows were nearly double the level in the final quarter of 2022. Chief Executive Steven Levin said: "From a low base around the end of the year, each subsequent month has demonstrated an improvement on the prior period. There is good momentum in our business. In-flows in the Quilter channel remain strong, with continued double digit net flows as a percentage of opening AuMA in both our High Net Worth and Affluent segments."
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OTHER COMPANIES
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Coca-Cola Europacific Partners noted an "encouraging" start the year, with "solid" top-line growth which it said should set the company up "really well" for the rest of the year. Revenue totalled EUR4.15 billion in the first quarter of 2023, up 12% against the year prior. Revenue per unit case stood at EUR5.50. Coca-Cola EP kept its full-year guidance unchanged, expecting comparable revenue growth between 6% and 8% in 2023. Guidance for cost of sales per unit case comparable growth was also unchanged at around 8%. The company declared a interim dividend of EUR0.67 per share.
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By Heather Rydings, Alliance News senior economics reporter
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