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(Alliance News) - Stocks in London were set for a higher open on Tuesday, with investors feeling cautiously optimistic as the dust settles from the recent turmoil in the banking sector.
"A relief ripple is helping stocks make some gains amid hopes that the volatility, which has wracked the banking sector, has eased off," said Hargreaves Lansdown's Susannah Streeter.
Due to speak about Silicon Valley Bank is Bank of England Governor Andrew Bailey, who will address the UK's Treasury Committee at 0945 BST, after talking to the London School of Economics on Monday evening.
"Governor Andrew Bailey stressed in his speech in London last night that interest rates may have to move higher if there were signs of persistent inflationary pressure," noted HL's Streeter.
A new report on Tuesday showed UK shop price inflation reached a record high this month, led by surging food prices.
In early corporate news, Ocado reported an improved first quarter except for falling basket sizes. Diageo's CEO is set to depart after 10 years. Robin Barr will depart AG Barr after 62 years.
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 41.0 points, 0.6%, at 7,512.77
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Hang Seng: up 1.2% at 19,799.50
Nikkei 225: closed up 0.2% at 27,518.25
S&P/ASX 200: closed up 1.0% at 7,034.10
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DJIA: closed up 194.55 points, 0.6%, at 32,432.08
S&P 500: closed up 0.2% at 3,977.53
Nasdaq Composite: closed down 0.5% at 11,768.84
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EUR: up at USD1.0814 (USD1.0782)
GBP: up at USD1.2319 (USD1.2268)
USD: down at JPY130.62 (JPY131.50)
GOLD: up at USD1,960.11 per ounce (USD1,956.69)
OIL (Brent): up at USD77.73 a barrel (USD75.91)
(changes since previous London equities close)
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ECONOMICS
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Tuesday's key economic events still to come:
11:00 IST Ireland retail sales
09:45 BST UK Treasury Committee evidence session on Silicon Valley Bank with BoE Governor Andrew Bailey
08:30 EDT US advance economic indicators report
08:55 EDT US Johnson Redbook retail sales index
09:00 EDT US house price index
10:00 EDT US Richmond Fed business activity survey
10:00 EDT US consumer confidence survey
16:30 EDT US API weekly statistical bulletin
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UK shop price inflation intensified in March, figures showed, with food costs jumping at record pace. According to the latest British Retail Consortium-NielsenIQ tracker, UK shop price inflation accelerated to 8.9% in March, from 8.4% in February. It takes the inflation rate to a new high, the BRC said. Non-food price inflation quickened to 5.9% in March, from 5.3% last month. Food price inflation picked up to 15% in March from 14.5% in February. Fresh food price inflation accelerated to 17% from 16.3%. They were the highest-ever rates of price inflation for food and fresh food in the UK, the BRC said.
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King Charles III will begin his first state visit when he travels to Germany on Wednesday, having postponed a trip to France due to widespread political protests. Charles will arrive in Berlin and undertake engagements there and in Brandenburg before heading to Hamburg during the three-day tour. The decision to visit close neighbours first is widely seen as an attempt to build post-Brexit bridges, with German President Frank-Walter Steinmeier calling it "an important European gesture". "This visit early on underlines the close and heartfelt friendship between our countries and our citizens," he added.
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BROKER RATING CHANGES
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Peel Hunt raises Boohoo to 'buy'
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Redburn raises International Consolidated Airlines to 'buy' (neutral)
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COMPANIES - FTSE 100
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Ocado gave an update on its first quarter. In the 13 weeks to February 26, the online grocer and warehouse technology firm said retail revenue was up 3.4% year-on-year to GBP583.7 million, as average selling prices rose 8.3% to GBP2.75. Average customer numbers grew 14% to 951,000, while average basket values edged up 0.2% to GBP124, but average basket sizes fell 7.5% to 45. Ocado left guidance unchanged from the end of February, expecting mid-single digit growth in revenue, and "marginally" positive earnings before interest, tax, depreciation and amortisation. "While the trading environment remains challenging, we expect to build momentum through the second half of the year, as we improve our proposition, grow our customer base, and no longer lap Covid shopping behaviours. This solid 2023 performance will enable us to return to sales growth and profitability," said CEO Hannah Gibson.
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Alcohol beverage maker Diageo said that, after 10 years in post, CEO Ivan Menezes has decided to retire from June 30. The firm's chief operating officer, Debra Crew, will become its new CEO from July 1. Crew is the former CEO of Reynolds American, after holding other senior roles at the cigarette maker. She hold spent five years at snacks and soft drinks maker PepsiCo where she served in positions including president of North America Nutrition.
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Sky News reported late Monday that high-street clothing and homewares retailer Next is in talks to acquire vintage brand Cath Kidston. Citing "banking sources", Sky said the deal is thought to be "likely but not certain" and could conclude as soon as Tuesday.
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COMPANIES - FTSE 250
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Three gambling businesses owned by William Hill will pay a total of GBP19.2 million for "widespread and alarming" social responsibility and anti-money laundering failures, the Gambling Commission has announced. The settlement is the largest in the Gambling Commission's history. WHG (International) Ltd, which runs williamhill.com, will pay GBP12.5 million; Mr Green Ltd, which runs mrgreen.com, will pay GBP3.7 million; and William Hill Organisation Ltd, which operates 1,344 gambling premises across Britain, will pay GBP3 million. A spokesperson for 888 Holdings, which owns William Hill, said: "The settlement relates to the period when William Hill was under the previous ownership and management. After William Hill was acquired, the company quickly addressed the identified issues with the implementation of a rigorous action plan." The previous largest case was a GBP17 million action taken against Entain in August last year.
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Drinks maker AG Barr said annual revenue rose 18% in 2022 to GBP317.6 million from GBP268.6 million in 2021. Pretax profit rose 5.2% to GBP44.4 million from GBP42.2 million. The Rubicon and Irn-Bru maker declared a final dividend of 10.6 pence, bringing the annual total to 13.1p, which is up 9.2% from the payout in 2021. "We are now in an investment phase, designed to capitalise on the strategic growth opportunities ahead," said CEO Roger White. In 2023, AG Barr expects operating margins to be hit by its investments, as well as cost inflation, and the "initial dilutive impact" from the Boost acquisition. "This growth and investment phase will support the rebuilding of our operating margin over the medium term and the creation of a stronger and more sustainable business," CEO White added. Separately, the firm said Robin Barr will not seek re-election at its annual general meeting. Barr has been with the company for 62 years, having previously been chair for 31 years until 2009.
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OTHER COMPANIES
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Team17 said its CEO is set to depart, as it reported earnings. The video games and educational apps firm said CEO Debbie Bestwick will leave "once a suitable successor can be found". The search has begun, and will include internal and external candidates. In 2022, Team17 said revenue jumped 52% to GBP137.4 million from GBP90.5 million in 2021, but pretax profit slipped 1.4% to GBP28.7 million from GBP29.1 million. Team17 noted GBP9.2 million in one-off acquisition-related costs. Looking ahead, it said it is mindful of global macro-economic pressures, but will focus on the areas it can control.
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By Elizabeth Winter, Alliance News senior markets reporter
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