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(Alliance News) - London's FTSE 100 is called to open higher on Thursday, shaking off a miserable session for US tech shares overnight.
"Despite the somewhat improved situation in the Middle East, stocks wobbled against the backdrop of Fed policy uncertainty," SPI Asset Management analyst Stephen Innes commented.
New York tech stocks will be back in the spotlight again later on Thursday, as streaming service Netflix reports following the closing bell.
Thursday's economic calendar is light, with focus on the latest US initial jobless claims reading later.
In early UK corporate news, Rentokil and Deliveroo maintained guidance, with Hipgnosis Songs Fund agreed to a USD1.40 billion takeover.
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 0.5% at 7,866.49
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Hang Seng: up 1.3% at 16,467.46
Nikkei 225: up 0.3% at 38,079.70
S&P/ASX 200: up 0.5% at 7,642.10
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DJIA: closed down 45.66 points, 0.1%, to 37,753.31
S&P 500: closed down 0.6% at 5,022.21
Nasdaq Composite: closed down 1.2% at 15,683.37
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EUR: up at USD1.0688 (USD1.0637)
GBP: up at USD1.2477 (USD1.2447)
USD: down at JPY154.21 (JPY154.67)
GOLD: down at USD2,377.86 per ounce (USD2,383.47)
(Brent): down at USD87.35 a barrel (USD88.68)
(changes since previous London equities close)
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ECONOMICS
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Thursday's key economic events still to come:
08:15 BST eurozone ECB Vice-President Luis de Guindos speaks
10:00 BST eurozone construction orders
13:30 BST US initial jobless claims
15:00 BST US existing home sales
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The UK needs to boost its economic defences to counter the "security risks" of globalisation, the deputy prime minister is set to warn. In a speech on Thursday, Oliver Dowden is expected to set out plans to bolster the UK's ability to deal with "economic security shocks" such as the rise in energy prices following Russia's invasion of Ukraine. He is expected to tell the Chatham House think tank that, "while the financial crash exposed the economic risks of globalisation, today's rising geopolitical competition is demonstrating the security risks behind such integration". Dowden will add: "We must be clear-eyed that one of the great strengths of our system is its openness, but that also brings vulnerabilities. "Covid and Russia's war on Ukraine both laid bare the interconnectedness of global supply chains and the extent to which they can be exploited, such as Russia driving up the price of gas, and Chinese acts of economic coercion." He is expected to set out a review of export controls of emerging technologies and the risks from UK businesses investing overseas.
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BROKER RATING CHANGES
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HSBC starts Haleon with 'buy' - price target 370 pence
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UBS cuts SSP to 'neutral' (buy) - price target 225 (230) pence
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COMPANIES - FTSE 100
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Rentokil said it made a "positive start" to 2024, hailing early results from a growth plan in North America. The pest control and hygiene firm said revenue in the three months to March 31 grew 0.9% to GBP1.27 billion from GBP1.26 billion a year earlier. "We have made a positive overall start to 2024. The group has performed well and our 'right was 2' plan has delivered a stabilising performance in North America. With the key trading period for the business ahead of us, we remain confident in delivering on our guidance of 2-4% organic revenue growth in the region," it added. Its North America outturn "has stabilised". It noted organic revenue there grew 1.5% on-year in the first-quarter. In addition to expecting North America organic revenue growth of 2% to 4% for 2024, it also still predicts "modest margin projection".
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easyJet reported a "positive outlook" for the remainder of its financial year, and said its "seasonal" losses eased in the first half. In the six months to March 31, revenue surged 22% to GBP3.27 billion from GBP2.69 billion. Its headline pretax loss slimmed to GBP350 million from GBP411 million. "Easter demand was particularly strong, benefitting March due to its early timing. Operational performance was good with peak daily flights broadly in line with summer levels," it said. "Bookings for summer 2024 continue to build well, with an increase in volume and pricing compared to the same period last year, underpinned by strong demand for easyJet's primary airport network." Chief Executive Johan Lundgren said the firm is "well set up operationally" for the upcoming summer season.
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COMPANIES - FTSE 250
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Hipgnosis Songs Fund agreed to a USD1.40 billion takeover from music rights acquirer Alchemy Copyrights, which trades as Concord. Concord will pay USD1.16, or GBP0.932, in cash per Hipgnosis share. The price is a 32% premium to its Wednesday closing level. Concord said Higpnosis Songs Fund shareholders will stand to receive an extra USD25 million in total, if the investment adviser deal with Hipgnosis Song Management is ended. HSM is chaired by Merck Mercuriadis, who also founded Hipgnosis Songs Fund. Hipgnosis Songs Fund has at loggerheads with Mercuriadis. The dispute was sparked by an arrangement, later rejected by Hipgnosis Songs Fund shareholders, to sell part of the fund's portfolio to a joint-venture between Hipgnosis Songs Management and private equity firm Blackstone. Hipgnosis Songs Fund Chair Robert Naylor said: "The acquisition represents an attractive opportunity for our shareholders to immediately realise their holding at a premium, mitigating the risks we see ahead to achieving a material improvement in the share price. At the same time, the board is confident that Concord, one of the world's leading independent music companies, is the right owner to take on the Hipgnosis catalogue and manage it in the interests of composers and performers." Naylor added the firm will now "encourage" Hipgnosis Song Management, as well as Blackstone, HSM's majority owner, "to agree an orderly termination of the investment advisory agreement". Naylor said: "This would enable the payment of a larger consideration under the agreed transaction with Concord and bring to an end a period of uncertainty for all Hipgnosis stakeholders."
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Homewares retailer Dunelm expects annual profit in line with market expectations, as it reported third-quarter sales growth but noted tough market conditions. Total sales in the 13 weeks to March 30 rose 3% year-on-year to GBP435 million. For the year to date, sales are 4% higher at GBP1.31 billion. Dunelm said: "Total sales increased by 3% to GBP435 million, despite both the homewares and furniture markets remaining challenging. As has been widely reported, trading conditions have continued to be volatile with March in particular seeing softer levels of demand. However against this backdrop, our offer continues to resonate with customers and our volume-driven sales performance is underpinned by growth across both store and digital channels. We therefore believe we have continued to gain further market share in the period." It expects full-year pretax profit to be "broadly in line with market expectations", citing consensus of GBP202 million, which would be up 4.7% from GBP193 million in financial 2023.
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OTHER COMPANIES
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Miner BHP shared strong copper production figures in its nine-month operational review, but cut guidance for metallurgical coal output following weather challenges. For the third quarter ended March 31, copper production rose 15% year-on-year to 465,900 tonnes, bringing the year-to-date 10% ahead of the same period of financial 2023. Iron ore output increased 3% annually to 61.5 million tonnes, though the year-to-date was 1% behind the prior year. Energy coal was up 5% at 4.1 million tonnes, and 23% ahead of the prior year for the nine-month period. However, metallurgical coal production from BHP Mitsubishi Alliance - its coal joint venture with Mitsubishi Development in Queensland - dropped 13% annually to 6.0 million tonnes in the third quarter, with nine-month production lagging the prior year by 16%. The company said it was cutting guidance once again for BMA. It now expects annual metallurgical coal production to be in a range between 21.5 to 22.5 million tonnes for the full year. This compares with prior guidance of 23 to 25 million tonnes, which had been cut from 28 to 31 million previously. In financial 2023, it produced 29.0 million tonnes.
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Food delivery service Deliveroo said first quarter revenue was largely unchanged on-year, with growth in the UK & Ireland segment offset by falls elsewhere. Group revenue in the first-quarter of 2024 edged up 0.4% to GBP514 million from GBP512 million a year earlier. Revenue rose 2.3% in the UK & Ireland unit, but fell 2.3% in its International arm. It also operates in nations including France, Italy and Singapore. First-quarter gross transaction value rose 4.8% to GBP1.83 billion, a rise of 6% at constant currency. Orders were 1.9% higher at 73.5 million. Looking ahead, it still expects full-year adjusted earnings before interest, tax, depreciation and amortisation between GBP110 million to GBP130 million, and constant currency GTV growth between 5% and 9%. It expects to be free cash flow expected to be positive for the full year.
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By Eric Cunha, Alliance News news editor
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