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(Alliance News) - Stocks in London are called to open higher, as investors shake off nerves ahead of a key US inflation reading.
Wednesday's economic calendar has the US inflation reading and Fed minutes at 1330 BST and 1900 BST.
Wednesday's US inflation data is expected to show the rate of year-on-year consumer price growth picked up to 3.4% last month, from 3.2% in February, according to FXStreet cited consensus.
If the rate of consumer price inflation picks up by more than expected, it could mean the Federal Reserve will re-think its interest rate outlook. In its last set of economic projections, the dot-plot showed three rate cuts were still the best bet for 2023.
In early corporate news, Tesco reported a surge in annual profit. Meanwhile, Direct Line named Jane Poole as its new chief financial officer.
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 0.6% at 7,979.50
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Hang Seng: up 1.8% at 17,130.02
Nikkei 225: closed down 0.5% at 39,581.81
S&P/ASX 200: closed up 0.3% at 7,848.50
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DJIA: closed down 9.13 points at 38,883.67
S&P 500: closed up 7.52 points, or 0.1%, at 5,209.91
Nasdaq Composite: closed up 52.68 points, or 0.3%, at 16,306.64
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EUR: down at USD1.0852 (USD1.0856)
GBP: up at USD1.2674 (USD1.2672)
USD: up at JPY151.80 (JPY151.65)
Gold: up at USD2,357.11 per ounce (USD2,347.44)
(Brent): down at USD89.47 a barrel (USD89.82)
(changes since previous London equities close)
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ECONOMICS
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Wednesday's key economic events still to come:
08:30 EDT Canada building permits
09:45 EDT Canada interest rate decision
08:30 EDT US CPI
10:00 EDT US wholesale inventories
10:30 EDT US EIA crude oil stocks
14:00 EDT US FOMC meeting minutes
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The UK will not suspend arms exports to Israel following the killing of seven aid workers in an air strike last week, the foreign secretary has confirmed. David Cameron said he had reviewed the most recent legal advice about the situation in Gaza, and this left the UK's position on export licences "unchanged". Speaking at a press conference in Washington DC, he said: "This is consistent with the advice that I and other ministers have received, and as ever we will keep the position under review." But, he added, the UK continued to have "grave concerns" about humanitarian access to Gaza, saying Israeli promises to "flood Gaza with aid … now need to be turned into reality".
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BROKER RATING CHANGES
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JPMorgan raises Phoenix Group price target to 525 (445) pence - 'underweight'
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JPMorgan cuts M&G price target to 225 (235) pence - 'neutral'
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Barclays raises Lloyds price target to 70 (65) pence - 'overweight'
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COMPANIES - FTSE 100
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Tesco reported that revenue increased by 4.4% to GBP68.19 billion in the 52 weeks ended February 24, from GBP65.32 billion a year earlier. Pretax profit shot up to GBP2.29 billion from GBP882 million. On the back of the results, Tesco upped its dividend by 11% to 12.10p from 10.90p. Chief Executive Ken Murphy said: "Inflationary pressures have lessened substantially, however we are conscious that things are still difficult for many customers, so we have worked hard to reduce prices and have now been the cheapest full-line grocer for well over a year. We have continued to invest in helping customers where it matters most, cutting prices on more than 4,000 products and doubling down on our powerful combination of Aldi Price Match, Low Everyday Prices and Clubcard Prices." Tesco added it expects to generate retail free cash flow within its guidance range of GBP1.4 billion to GBP1.8 billion for the current financial year 2025.
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DG Fuels has chosen Johnson Matthey and BP technology's co-developed Fischer Tropsch CANS technology for its first sustainable aviation fuel plant. The plant is located in Louisiana, US. "The plant would be the largest deployment of FT CANS to date, seven times larger than any previously announced project using this technology," Johnson Matthey said. It added that DG Fuels is an "emerging leader" in renewable hydrogen and biogenic based, synthetic SAF and diesel fuel.
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COMPANIES - FTSE 250
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Direct Line named Jane Poole as its new chief financial officer. Poole will join in October, succeeding Neil Manser who has been in post since January 2021. Manser has been with Direct Line since 2011, having been "instrumental" with the company's initial public offering in 2012. Since 2021, Poole has been CFO for Aviva's UK and Ireland General Insurance business. Chair Danuta Gray said: "Jane has impressive experience in the UK general insurance market and an enviable record of success in leading teams in personal and commercial lines insurance. The board conducted an extensive search to secure such a high calibre appointee and I am confident that Jane Poole will be a great asset to our organisation."
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Vistry said it has been appointed by Homes England to deliver the regeneration of City Hospital in Birmingham. To secure the contract, it said it has worked closely with Birmingham City Council and Sandwell and West Birmingham Hospitals NHS Trust. The site has outline planning permission for 750 homes, of which more than 50% will be affordable or private rent tenures, with the remaining homes for open market sale. A second partnership deal in Hardingstone, Northamptonshire, will see the company deliver 250 mixed tenure homes with more than 50% presold. CEO Greg Fitzgerald said: "These deals further evidence the benefit of our long-term strategic partnership with Homes England, enabling the group to deliver a significant number of mixed tenure homes in the Midlands. Furthermore, the unique capabilities of Vistry Works will allow us to utilise timber frame manufacturing at scale across both sites, speeding up housing delivery whilst reducing carbon emissions."
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OTHER COMPANIES
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THG reported that revenue in 2023 fell to GBP2.05 billion from GBP2.24 billion a year earlier. Pretax loss narrowed to GBP252.0 million from GBP549.7 million. Cost of sales decreased to GBP1.21 billion from GBP1.36 billion, while administrative costs decreased to GBP709.0 million from GBP972.8 million. Looking ahead, THG said revenue trends "continue to improve", with notable momentum in Beauty following the strategic changes made during 2023. "In 2023, we made material progress against our strategic priorities, delivering significant profit growth following the support for our consumers through the cost-of-living crisis in 2022. This focus led to the Group delivering record EBITDA after cash-adjusting items in 2023, higher than at the peak of the pandemic," said CEO Matthew Moulding.
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UK air traffic controller National Air Traffic Services said it has hired former Rolls-Royce CEO Warren East as non-executive chair. He takes up his position on September 1 and succeeds Paul Golby, who has served in the role for the last 10 years. East served as CEO of Rolls-Royce between 2015 and 2022 and prior to this, spent almost 20 years with ARM Holdings. In March, an independent review into the August bank holiday air traffic control meltdown in the UK, which affected nearly 750,000 passengers, highlighted a "significant lack of pre-planning". Flights were grounded across UK airports on August 28 last year, after NATS suffered a technical glitch while processing a flight plan.
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By Sophie Rose, Alliance News senior reporter
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