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(Alliance News) - Stocks in London were called flat on Thursday as markets grappled with a deepening property crisis in China and the prospect of interest rates staying higher for longer.
Embattled property developer China Evergrande suspended trading of its shares on the Hong Kong stock exchange on Thursday, according to notices posted by the bourse.
The halt in trading comes a day after a Bloomberg report that Evergrande's billionaire boss Xi Jiayin was being held by police under "residential surveillance".
Evergrande had only just resumed trading a month ago after the company was suspended for 17 months for not publishing its financial results.
Oil was close to the USD100-a-barrel mark amid concerns about growing demand and waning supplies.
Oil prices have risen 30% since June after some of the world's biggest producers, including Saudi Arabia and Russia, announced a series of supply cuts to last until the end of this year.
The rise has fuelled concerns over persistent inflation adding to the narrative that interest rates will have to stay higher, for longer.
In early UK corporate news, William Hill-owner 888 Holdings said its performance so far in 2023 has been "mixed" with annual revenue now expected to be lower year-on-year.
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 just 0.48 of a point at 7,593.70
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Hang Seng: down 1.4% at 17,357.41
Nikkei 225: closed down 1.5% at 31,872.52
S&P/ASX 200: closed down 0.1% at 7,024.80
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DJIA: closed down 68.91 points, 0.2%, at 33,550.27
S&P 500: closed little changed at 4,274.51
Nasdaq Composite: closed up 0.2% at 13,092.85.
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EUR: lower at USD1.0504 (USD1.0517)
GBP: lower at USD1.2135 (USD1.2140)
USD: flat at JPY149.41 (JPY149.42)
Gold: lower at USD1,874.09 per ounce (USD1,880.42)
(Brent): lower at USD94.87 a barrel (USD95.52)
(changes since previous London equities close)
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ECONOMICS
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Thursday's key economic events still to come:
EU ECB General Council meeting
08:30 EDT Canada payroll employment, earnings and job vacancies
10:00 CEST EU ECB Economic Bulletin
11:00 CEST EU economic sentiment indicator
10:00 CEST Germany Ifo economic forecast
14:00 CEST Germany CPI
10:00 CEST Italy business and consumer confidence survey
11:00 CEST Italy PPI
09:00 CEST Spain retail sales
08:30 EDT US unemployment insurance weekly claims report
08:30 EDT US GDP
09:00 EDT US Fed Chicago President Austan Goolsbee delivers Peterson Institute policy speech
10:00 EDT US pending home sales index
16:00 EDT US Federal Reserve Board Chair Jerome Powell hosts a town hall
16:30 EDT US foreign central bank holdings
16:30 EDT US federal discount window borrowings
19:00 EDT US Fed Richmond President Thomas Barkin speaks at Money Marketeers event
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The UK's ruling Conservatives gather this weekend for their annual conference, with Prime Minister Rishi Sunak bidding to revive the party's flagging fortunes with an apparent reset. The four-day event from Sunday in Manchester, northwest England, comes with a general election expected next year that Sunak's Tories – in power since 2010 – look set to lose to the main Labour opposition. The UK leader, whose keynote speech next Wednesday will close the conference, appears to be shifting his beleaguered party onto an election footing by trying to refocus attention onto a broader policy agenda. This year's get-together is being held under the slogan "long-term decisions for a brighter future", with Sunak arguing in a recent speech that it is "time to address the bigger, longer term questions we face".
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BROKER RATING CHANGES
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Barclays cuts United Utilities to 'equal weight' (overweight) - price target 1,290 (1,310) pence
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Barclays raises Severn Trent 'overweight' (equal weight) - price target 3,360 (3,400) pence
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Barclays reinitiates National Grid with 'overweight' - price target 1,300 pence
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COMPANIES - FTSE 100
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Diageo kept its expectations for its financial 2024 year unchanged from those given at the release of its annual results in August. The Guinness and Smirnoff owner said that it expects operating environment challenges to persist but adds that it will move "with speed and agility" to invest in marketing and innovation. Chief Executive Debra Crew adds that the firm remains well-positioned to deliver its medium-term guidance for financial 2023 to financial 2025 of organic net sales growth consistently in the range of 5% to 7% and organic operating profit growth in the range of 6% to 9%.
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COMPANIES - FTSE 250
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William Hill-owner 888 Holdings said its performance so far in 2023 has been "mixed" with overall revenue for the third quarter expected to be 10% to around GBP400 million. The company said the main drivers behind this decline with the ongoing impact of compliance changes in dotcom markets, the ongoing impact of safer gambling changes in the UK, the short-term impact of a change in marketing approach and customer friendly sports hitting margin in both the UK and international markets. Looking forward, 888 expects revenue in the final quarter of the year to be higher than in the third but lower year-on-year by a mid-single digit. It expects to return to revenue growth in 2024.
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Mitchells & Butlers said trading in the final quarter of its financial year ended September 23 was "strong", reporting like-for-like sales growth of 9.7%. In the financial year as a whole, like-for-like sales growth totalled 9.1%. Looking forward, M&B said cost headwinds were abating and remain at the bottom end of the range previously expected It added that it remains "mindful" of the challenging macroeconomic environment and pressures on the consumer but is nonetheless confident that the current financial year will be at the top end of consensus expectations.
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Babcock International said trading since the start of its financial year has been "encouraging", noting good organic revenue growth, an improved operational performance and high cash flow compared to the same period in the year prior. The aerospace and defence company added that underlying profit has increased year-on-year thanks to revenue growth and continued operational improvement. Looking forward, Babcock said new programme wins, contract renewals and progress on its pipeline remain strong, thus supporting its unchanged expectations for another year of organic revenue growth and further underlying margin expansion.
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OTHER COMPANIES
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Deliveroo proposed to return up to GBP250 million to its shareholders through a tender offer at a price between 115 pence and 135p per share. The online food delivery service said the tender offer price represents a 6% to 24% premium to its closing price on Wednesday. The tender offer is subject to shareholder approval and its expected to open on Friday. The offer is expected to close on October 27, with proceeds anticipated to be despatched in early November.
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Yellow Cake announced that 18.7 million shares have been placed with existing and new institutional investors at a fixed price of GBP5.50 per share via an accelerated bookbuild, raising GBP103 million. The placing was announced on Wednesday. The placing shares being issued represent approximately 9.4% of the company's share capital. It has a market capitalisation of GBP1.15 billion. Chief Executive Andre Liebenberg adds: "The recent positive momentum in the uranium price is indicative of the themes we have consistently set out, with supply demand fundamentals and a wider acceptance of the critical role nuclear energy will play in supporting our net zero ambitions both acting as long-term drivers. Looking ahead, we remain confident that spot and term prices will need to increase further to reach an incentive price which supports the construction of the new greenfield mines that are needed to meet mid and long-term uranium demand expectations."
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By Heather Rydings, Alliance News senior economics reporter
Comments and questions to newsroom@alliancenews.com
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