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(Alliance News) - London stocks rose at the open on Tuesday, as the UK market caught up to Europe and US after the three-day holiday weekend.
The shortened week will start slowly with focus on a Bank of England policy announcement on Thursday and the April jobs report for the US on Friday.
Also on Thursday is a trading update from retailer Next and, on Friday, first-quarter results for British Airways-owner IAG and Holiday Inn-owner IHG.
Both IAG and IHG are desperate for business travel to resume as the virus pandemic lifts, according to Richard Hunter, head of Markets at interactive investor.
"For both, this was a lucrative line of business but the ability to be able to justify costly international travel for business following the clear success of virtual meetings during the pandemic is an obvious overhang on their recovery prospects."
Hunter added: "As an investment destination, the UK continues to benefit from a warming of sentiment from international investors and is still seen as something of a value play compared to many of its overseas peers. In particular, the influence of the banks, oils and miners within the premier index are seeing the benefit of an increasing move towards cyclicals, as evidenced by some recent updates suggesting that an inflection point in their fortunes may have been reached."
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.6% at 7,013.68
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Hang Seng: up 0.6% at 28,536.09
Nikkei 225: Tokyo market closed for holiday.
DJIA: closed up 238.38 points, 0.7%, at 34,113.23
S&P 500: closed up 0.3% at 4,192.66
Nasdaq Composite: closed down 0.5% at 13,895.12
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EUR: down at USD1.2035 (USD1.2064)
GBP: down at USD1.3885 (USD1.3907)
USD: up at JPY109.33 (JPY109.09)
GOLD: down at USD1,786.42 per ounce (USD1,791.90)
OIL (Brent): soft at USD67.40 a barrel (USD67.50)
(changes since New York equities close Monday)
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ECONOMICS AND GENERAL
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Tuesday's Key Economic Events still to come
China Labour Day holiday. Financial markets closed.
Japan Greenery Day, aka Nature Day - part of Golden Week. Financial markets closed.
0930 BST UK monetary & financial statistics
0930 BST UK CIPS-Markit manufacturing purchasing managers' index
0830 EDT US international trade in goods & services
0855 EDT US Johnson Redbook retail sales index
0945 EDT US ISM-NY report on business
1000 EDT US manufacturers' shipments, inventories & orders (M3)
1000 EDT US IBD/TIPP Economic Optimism Index
1630 EDT US API weekly statistical bulletin
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Reserve Bank of Australia policymakers decided to keep the cash lending rate unchanged amid an improving outlook for the local economy. At the central bank's meeting on Tuesday, RBA kept Australia's key interest rate at 0.1%. In addition, the board maintained the yield on the three-year Australian government bond, as well as the parameters of the term funding facility and the government bond purchase program. The Reserve Bank's central scenario for gross domestic product growth in Australia was revised up further, with growth of 4.75% expected over 2021 and 3.5% over 2022.
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BROKER RATING CHANGES
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JPMORGAN RAISES IAG TO 'OVERWEIGHT' (NEUTRAL) - PRICE TARGET 2.85 (1.66) EUR
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BERENBERG STARTS TRUSTPILOT WITH 'BUY' - PRICE TARGET 385 PENCE
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JPMORGAN INITIATES TRUSTPILOT WITH 'OVERWEIGHT' - TARGET 350 PENCE
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COMPANIES - FTSE 100
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NatWest Group said it has completed the transfer of the major part of the banking business of Ulster Bank in Northern Ireland to National Westminster Bank. It said the move, first announced back in November, was done to simplify its business in Northern Ireland.
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COMPANIES - FTSE 250
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Centamin has awarded contracts to build a solar power plant at its Sukari gold mine in the Egyptian desert. Centamin said it awarded engineering, procurement and construction contracts for the 36 megawatt solar farm and 7.5mw battery-energy storage system at Sukari to juwi and Giza Systems. Centamin said the Sukari solar plant is expected to reduce diesel fuel consumption at Sukari by an estimated 22 million litres per annum and lower carbon emissions by an estimated 60,000 tonnes carbon dioxide equivalent per annum. The project is scheduled to be commissioned late in the first half of 2022. "Centamin's decision to integrate sustainable solar power at Sukari is fully aligned with our commitment to responsible mining," said Chief Executive Officer Martin Horgan.
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Domino's Pizza Group said the sale of its entire shareholding in Swedish business PPS Foods AB completed on Sunday. Earlier this year, the pizza delivery chain had said it would sell the loss-making business for EUR2 million to a company controlled by Birgir Bieltvedt, the indirect owner of another Domino's franchiser, DP Norway.
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Provident Financial said the operational review of its Consumer Credit Division is nearing completion and the outcome will be announced with the full year results, to be published on Monday. Over the weekend, The Mail on Sunday reported Provident would close its its doorstep lending business and online lending business, Satsuma, leaving Provident to focus on its credit card business, Vanquis Bank, and its car finance operation, Moneybarn.
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Babcock International is preparing to put its rail business and parts of its aerial emergency services operation up for sale, the Financial Times reported, citing "two people familiar with the situation". Its training division, which provides engineering apprenticeships, also is being considered for sale. The moves are intended to improved Babock's finances, the newspaper said.
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COMPANIES - MAIN MARKET AND AIM
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Martin Sorrell's S4 Capital said the strong rebound in global economic growth in 2021 and 2022 will drive 20% per annum growth in digital advertising, as the pandemic accelerates digital transformation. The advertising firm also said it delivered a strong first-quarter performance. For the first quarter to March 31, revenue rose 71% to GBP122 million from GBP71 million in the first quarter of 2020. Gross profit also increased 71% to GBP104 million from GBP60.7 million a year ago. S4 Capital raised its like-for-like gross profit growth target to 30% from 25% previously. In addition, S4 Capital announced a the acquisition of Brazil-based Raccoon Group, which will be combined with S4's MightyHive in a move to expand the capabilities of its data and digital media practice in Latin America.
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COMPANIES - GLOBAL
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Oil producer Saudi Aramco said first-quarter profit jumped 30% compared to the same period last year on the back of higher oil prices. "Aramco's net income was USD21.7 billion for the first quarter, a 30% increase from USD16.7 billion in Q1 2020, primarily driven by a stronger oil market and higher refining and chemicals margins, partly offset by lower production," the company said in a statement. The news follows consecutive falls in quarterly profits last year owing to low oil prices and production cuts as the coronavirus pandemic sapped global energy demand.
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Goldman Sachs is considering investing GBP250 million into Ovo Energy, Sky News reported on Friday, citing "City sources". Ovo is one of the UK's largest domestic gas and electricity suppliers following its purchase of SSE Energy Services from SSE at the start of last year. A private investment division of Goldman's asset management business is in advanced talks to inject capital into Ovo, Sky said, and a deal could be announced within weeks. It would result in Goldman holding a substantial minority stake in Ovo, the television news channel said.
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Tuesday's Shareholder Meetings
Apax Global Alpha Ltd - AGM
Dialog Semiconductor PLC - AGM
Hammerson PLC - AGM
Plus500 Ltd - AGM
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By Tom Waite; thomaslwaite@alliancenews.com
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