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(Alliance News) - Stocks in London are set to fall at Monday's open, as concerns over US inflation trends curb risk appetite, and damp hopes of interest rate cuts from the Federal Reserve.
Sentiment in New York suffered on Friday amid another set of surprise inflation data. US producer prices rose sharper than expected in January, data from the US Bureau of Labor Statistics showed on Friday. The figures followed hot consumer prices index data earlier last week.
US financial markets will be closed on Monday to celebrate Washington's birthday.
In contrast, markets in mainland China opened the week in the green, after the Lunar New Year break. This follows upbeat official data on last week's holiday spending, which surged past pre-pandemic levels in 2019.
"In summary, the week starts with good news from China, bad news for the Fed doves, and mounting worries that even if the impact of rising energy and shipping costs due to the Red Sea tensions remain limited on inflation, a powerful Chinese comeback may not," said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
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 14.1 points, 0.2%, at 7,697.61
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Hang Seng: down 0.9% at 16,189.33
Nikkei 225: closed slightly lower at 38,470.38
S&P/ASX 200: closed up 0.1% at 7,665.10
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DJIA: closed down 145.13 points, 0.4%, at 38,627.99
S&P 500: closed down 0.5% at 5,005.97
Nasdaq Composite: closed down 0.8% to 15,775.65
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EUR: up at USD1.0787 (USD1.0775)
GBP: up at USD1.2626 (USD1.2582)
USD: down at JPY149.05 (JPY150.13)
Gold: up at USD2,021.79 per ounce (USD2,009.01)
Oil (Brent): flat at USD82.89 a barrel (USD82.88)
(changes since previous London equities close)
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ECONOMICS
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Monday's key economic events still to come:
US Washington's Birthday. Financial markets closed.
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The average price tag on a UK home jumped by more than GBP3,000 month-on-month in February, according to a property website. Across Britain, the average new seller asking price increased by 0.9% or GBP3,091 this month to GBP362,839, Rightmove said. The website said the increase is in line with the seasonal rise it would expect in February. In signs of growing market momentum, the average asking price is also up by 0.1% compared with a year earlier, following a period of annual falls in every month since August 2023. The number of sales agreed in the first six weeks of this year is also 16% higher than in the same period last year, Rightmove said.
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A Conservative minister has defended UK Prime Minister Rishi Sunak and the party after two by-election defeats, saying they were set against a "very difficult backdrop". The losses to Labour in Wellingborough and Kingswood, as well as increased support for the emboldened Reform UK party, were the latest blow to the prime minister. The Conservative government has endured more by-election losses than any administration since the 1960s, surpassing the eight defeats suffered by John Major in the run-up to Tony Blair's 1997 landslide victory. However, Tory illegal migration minister Michael Tomlinson told the BBC's Sunday With Laura Kuenssberg programme: "There's no doubt that these by-elections were set against a very difficult backdrop."
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Opposition leader Keir Starmer has said Labour would seek a new security pact with the EU if it wins the next election. It comes amid renewed concerns across the continent about the impact a Donald Trump return to the White House may have on Nato and European security. The Labour leader, who travelled to Munich to meet world leaders at a major security conference, was careful to avoid explicit criticism of the potential next US president. But in setting out his plans for a new security arrangement, he affirmed his party's "unshakeable commitment" to Nato. In a lengthy statement as he left the German gathering, he said: "The UK and EU face the same threats: not just growing Russian aggression, but instability in the Middle East, a climate emergency and global health crises."
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Foreign Secretary David Cameron signalled that there could be fresh sanctions against Russia officials, following the death of Alexei Navalny. Cameron joined other G7 ministers at the Munich Security Conference in calling on Russia to "fully clarify" how the jailed opposition leader died, amid pressure on Western leaders to respond. According to the Times, Cameron used the German gathering to repeat the UK's call for countries to seize Russian central bank assets currently held in the West as one way of financing the reconstruction of Ukraine. Labour has said it would back any government response in the wake of Navalny's death.
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BROKER RATING CHANGES
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UBS cuts Howden Joinery Group to 'neutral' (buy) - price target 852 (782) pence
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Jefferies raises SSE to 'buy' (hold) - price target 1,850 (1,620) pence
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Jefferies cuts Drax Group price target to 580 (660) pence - 'buy'
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COMPANIES - FTSE 100
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AstraZeneca reported positive analysis from its Laura phase III trial for Tagrisso in lung cancer. The treatment showed "statistically significant and highly clinically meaningful improvement in progression-free survival for patients with unresectable, Stage III epidermal growth factor receptor-mutated non-small cell lung cancer after chemoradiotherapy (CRT) compared to placebo after CRT," the pharmaceutical company said. Overall survival data showed a "favourable trend" for Tagrisso, but Astra noted the data "were not mature" at the time of the analysis. The trial will continue to assess overall survival as a secondary endpoint. Separately, the firm announced Tagrisso with chemotherapy received US approval for use in locally advanced or metastatic epidermal growth factor receptor-mutated non-small cell lung cancer. Further, Astra noted its biologics license application for datopotamab deruxtecan has been accepted by the US Food & Administration. The application, made alongside Japanese firm Daiichi Sankyo, concerned the drug's use in the treatment of adult patients with locally advanced or metastatic nonsquamous non-small cell lung cancer who have received prior systemic therapy.
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COMPANIES - FTSE 250
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MoneySupermarket.com said "exceptional trading" in Insurance helped to drive double-digit topline growth in 2023, despite "no material revenue" from energy switching. The price comparison website said annual revenue grew 11% year-on-year to GBP432.1 million from GBP387.6 million. Pretax profit increased 8.1% to GBP92.1 million from GBP85.2 million. The firm lifted its final dividend slightly to 8.9 pence per share from 8.6p a year prior. Looking ahead, the firm said it expects no increase in energy switching revenue in 2024, with comparatives in Insurance to become "tougher", especially into the second half. "However, our trading performance and momentum in our strategic execution, gives the board confidence that group [earnings before interest, tax, depreciation and amortisation] will be within the current market consensus range," the firm said. It cited the consensus range as GBP133.8 million to GBP146.2 million. This would represent an increase from 2023's GBP131.9 million.
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Currys said it rebuffed a takeover attempt from US activist investor Elliott Investment Management, believing the bid undervalues the electricals retailer. Currys said it received an unsolicited proposal worth around GBP702.8 million from Elliott, or 62 pence per share. Currys said the sum "significantly undervalued the company and its future prospects". Shares in Currys fell 0.6% to 47.08p each in London on Friday, giving it a market capitalisation of GBP533.7 million. Elliott already has a presence in the UK retail sector. It owns bookseller Waterstones. According to City rules, it has until March 16 to announce if it plans to make an offer for Currys.
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OTHER COMPANIES
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Point of care pharmacogenetic testing firm Genedrive noted the opening of the NICE Early Value Assessment evidence generation funding call, supported by the National Institute for Health & Care Research. The Real World Evidence Programme is backed by GBP10 million in UK government funding, it noted. The firm said: "Genedrive confirms that it is in the process of submitting an application for funding to address the NICE EVA evidence generation recommendations of the Genedrive MT-RNR1 ID Kit, which are required for progressing the NICE conditional recommendation into a full recommendation."
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By Elizabeth Winter, Alliance News deputy news editor
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