(Alliance News) - Stocks in London are expected to edge higher on Friday, as investors reflect on an eventful year and look ahead to what's in store for 2024.
The FTSE 100 index is on course to record a 2.2% rise in 2023, well short of gains seen in US equities this year.
In early UK economic news, house prices continued to fall on an annual basis in December, but remained unchanged from the prior month. Nationwide noted that 2023 had been the year of the cash buyer, as elevated mortgage rates stretched housing affordability for many potential buyers.
However, Capital Economics predicts prospects for mortgaged buyers could improve from next year.
"Falls in interest swap rates mean our measure of the average quoted mortgage rate is on course to fall from 5% in November to about 4.2% in the new year, which would be the lowest since September 2022, before the mini budget. That will support a recovery in demand from mortgaged buyers in the new year, and suggests the housing market is on course to better expectations again in 2024," said Capital Economics senior property economist Andrew Wishart.
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 3.3 points at 7,726.04
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Hang Seng: down 0.1% at 17,026.00
Nikkei 225: closed down 0.2% at 33,464.17
S&P/ASX 200: closed down 0.3% at 7,590.80
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DJIA: closed up 53.58 points, 0.1%, at 37,710.10
S&P 500: closed marginally higher at 4,783.35
Nasdaq Composite: closed marginally down at 15,095.14
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EUR: down at USD1.1066 (USD1.1078)
GBP: up slightly at USD1.2748 (USD1.2741)
USD: up at JPY141.46 (JPY141.08)
Gold: down at USD2,070.38 per ounce (USD2,075.46)
Oil (Brent): down at USD77.57 a barrel (USD78.70)
(changes since previous London equities close)
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ECONOMICS
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Friday's key economic events still to come:
09:30 GMT UK capital issuance statistics
08:30 EST US export sales
09:45 EST US ISM-Chicago business survey
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UK house prices were unchanged on a monthly basis in December, according to figures from Nationwide. The Nationwide house price index showed no change in seasonally-adjusted UK house prices in the final month of the year, after a 0.2% rise in November from October. December's reading was in line with FXStreet-cited market consensus. In December, the average UK house price stood at GBP257,443, down slightly from GBP258,557 the prior month, without seasonal adjustment. Annually, non-seasonally adjusted prices fell 1.8% in December, softening from a 2.0% fall in November. However, December's decline was slightly steeper than the 1.4% pencilled in by the market. Compared to their all-time high in late summer 2022, house prices were 4.5% lower.
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Thousands of homes in the UK remained without power early Friday as the post-storm clean-up begins in the wake of Storm Gerrit. Around 1,500 homes in Scotland experienced their second night without power in Scotland while a lightning strike hit supplies in Wales on Thursday. Power company Scottish and Southern Electricity Networks said it had restored supply to more than 46,000 properties that lost power due to the storm, with people in the north east and Shetland worst affected. They said the remaining homes should be reconnected on Friday with welfare vans serving hot food and drink to affected customers.
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COMPANY NEWS
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Huawei Technologies said it "weathered the storm" of US sanctions as it announced a rise of almost 9% in revenue in 2023, a year that saw it shock Washington with the release of a high-end smartphone. Shenzhen-based Huawei has been at the centre of an intense stand-off between China and the US, with Washington warning its equipment could be used for state espionage, an allegation the company denies. Sanctions since 2019 have cut the firm off from access to US-made components and technologies, forcing it to diversify its growth sources. For 2023, the group expects revenue of more than CNY700 billion, about USD99.2 billion, Hu said – an increase of nearly 9% from last year. But the revenue remains much lower than the CNY891.4 billion it earned in 2020, the year before the company announced a sharp decline in turnover due to US sanctions.
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Duke Royalty said it expects recurring cash revenue of GBP6.3 million in its third quarter ending December 31, which would be a 12% increase year-on-year. It would also be a slightly increase from GBP6.2 million in its second quarter. "We are pleased to report that despite the ongoing macroeconomic uncertainties, we continue to deliver revenue growth, with Q3 FY24 on course to maintain this upward trend, underpinning our stable dividend which at the current share price, represents an approximate 9% yield," said CEO Neil Johnson.
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West Africa and India-focused gold explorer and developer Panthera Resources said pretax loss narrowed to USD1.0 million in the six months to September from USD1.4 million a year before, mostly owing to lower exploration expenses. It recorded no revenue in either period. Panthera said its focus has shifted to pursuing a claim against India for breaches of its obligations under the Australia-India Bilateral Investment Treaty. It has secured USD13.6 million in litigation financing to this end.
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e-Drive system maker Saietta Group reported a "challenging" first half of its financial year, but noted "significant strides" have been made towards its transition to a full-scale production manufacturer from a research & development company. In the six months to September 30, revenue rose to GBP977,229 from GBP753,517 a year before, while its pretax loss narrowed to GBP7.9 million from GBP9.4 million. "Saietta and its Indian [joint venture], Saietta VNA, have secured high volume [original equipment manufacturer] relationships in India and the US which are set to utilise the production capacity they have developed in Delhi and Sunderland. The group is therefore ready to enter the next stage of its evolution as a large-scale manufacturer," the firm said.
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By Elizabeth Winter, Alliance News deputy news editor
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