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(Alliance News) - Stocks in London are set to open lower on Wednesday, ahead of a key interest rate decision by the US Federal Reserve later in the day.
The Federal Open Market Committee will conclude its two-day policy meeting on Wednesday and announce its decision at 1900 GMT. This will be followed by a press conference with Fed Chair Jerome Powell at 1930 GMT.
According to the CME FedWatch Tool, there is a 79% chance of a 50 basis point hike from the Fed, and a 21% chance a bigger hike of 75 basis points.
Should the Fed raise rates as expected by half a percent, this would take the federal funds rate range to 4.45% to 4.50%.
In Asia, China's top health body said Wednesday the true scale of coronavirus infections in the country is now "impossible" to track, with officials warning cases are rising rapidly in Beijing after the government abruptly abandoned its zero-Covid policy last week.
Here is what you need to know ahead of the London market open:
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MARKETS
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FTSE 100: called down 14.59 points, or 0.2%, at 7,488.30
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Hang Seng: up 0.5% at 19,695.58
Nikkei 225: closed up 0.7% at 28,156.21
S&P/ASX 200: closed up 0.7% at 7,251.30
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DJIA: closed up 0.3% at 34,108.64
S&P 500: closed up 0.7% at 4,019.65
Nasdaq Composite: closed up 1.0% at 11,256.81
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EUR: lower at USD1.0623 (USD1.0643)
GBP: lower at USD1.2349 (USD1.2378)
USD: higher at JPY135.47 (JPY135.10)
Gold: lower at USD1,808.36 per ounce (USD1,813.25)
(Brent): lower at USD80.53 a barrel (USD81.03)
(changes since previous London equities close)
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ECONOMICS
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Wednesday's key economic events still to come:
11:00 CET EU industrial production
10:00 CET Germany IFO economic forecast
09:30 GMT UK house price index
12:15 GMT UK BoE financial stability report
07:00 EST US MBA mortgage applications survey
08:30 EST US import and export price indexes
14:00 EST US interest rate decision
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Inflation in the UK cooled off from last month's record annual high, according to data from the Office of National Statistics. The consumer price index rose by 0.4% in November against the previous month. Annually, CPI grew by 10.7%. Both the annual and the monthly increases undershot FXStreet-cited market consensus of 0.6% and 10.9% rises, respectively. In October, prices rose by 11.1% against the previous year, the highest annual inflation rate since the National Statistics series began in January 1997.
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BROKER RATING CHANGES
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JPMorgan cuts Taylor Wimpey to 'neutral' from 'overweight' - price target 110 (170) pence
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JPMorgan cuts Rio Tinto to 'underweight' from 'neutral' - price target 5,310 (5,480) pence
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JPMorgan cuts Redrow to 'underweight' from 'neutral' - price target 390 (550) pence
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COMPANIES - FTSE 100
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Vodafone on Tuesday said its subsidiary Oak Holdings launched a voluntary takeover offer for mobile towers business Vantage Towers. Vodafone said the price of the takeover offer is EUR32.00 per share, representing a 19% premium to the three-month volume-weighted average share price of EUR26.89. The telecommunications firm added that Oak will hold a minimum of 88.2% of the outstanding share capital of Germany-based Vantage Towers, which comprises the 81.7% stake held by Vodafone prior to the announcement of the offer.
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JP Sports Fashion retained its A- rating for corporate disclosure related to climate change for the third successive year from the Carbon Disclosure Project. The clothing retailer also improved its water security grade to A-. Chief Financial Officer & Chair Neil Greenhalgh said: "Our scores remain well ahead of the retail sector average, demonstrating JD's commitment and collective effort in this area." The project rates 15,000 companies for environmental disclosure.
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COMPANIES - FTSE 250
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Holiday operator Tui AG said it pretax loss for the financial year that ended September 30 narrowed to EUR146 million from EUR2.46 billion, as revenue multiplied to EUR16.55 billion from EUR4.73 billion after Covid-19 travel restrictions were lifted. Tui said it expects to operate its Winter 2022-23 programme at close to pre-pandemic levels. The Winter programme is 54% sold, which means bookings are at 134% of last year and 84% of 2018-19 levels. Tui reduced its net debt to EUR3.44 billion from EUR4.95 billion a year before.
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Watches of Switzerland reported double-digit rises in both interim profit and revenue, boasting "ongoing" market share gains. In the six months ended October 30, the watch retailer reported revenue of GBP765 million, up 31% from GBP586 million the previous year. Pretax profit rose 28% to GBP83 million from GBP65 million. The company also noted that trading in the holiday period so far has been in-line with its expectations. As a result, Watches of Switzerland kept its full-year guidance unchanged which expects revenue between GBP1.50 billion and GBP1.55 billion.
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Tullow Oil signed a production sharing contract for a new offshore exploration licence in the Ivory Coast, adjacent to its existing CI-524 licence. Tullow will operate the new CI-803 licence with a 90% interest. The remaining 10% will be held by PetroCi. Tullow said the licence strengthens its position in the Tano Basin where "significant" prospectivity has been identified. Chief Executive Rahul Dhir said: "This new licence underscores our strong commitment to investing in and unlocking the resource potential in Cote d'Ivoire. Our exploration strategy is focussed around existing producing fields in basins where we have a differentiated understanding, in this case through our deep understanding of the Tano Basin."
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OTHER COMPANIES
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Oxford BioMedica said subsidiary Oxford Biomedica Solutions has signed agreements with three unnamed US biotechnology firms. Under the agreements, the subsidiary will provide its full platform offering to support the new partners' pre-clinical gene therapy programmes. Chair & Interim Chief Executive Roch Doliveux said: "Securing four new AAV customers in 2022 exceeds our original stated target of two new customers by the end of 2022. We are making considerable progress towards becoming a global viral vector leader across all key vector types, with this momentum in Oxford Biomedica Solutions adding to the strength and depth of our UK-based operations."
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Holcim Ltd said it is leaving Russia by selling its business in the country to the local management team. "With its new owners, the business will operate independently under a different brand," the Zug, Switzerland-headquartered building materials manufacturer said. Holcim said its exit from Russia, which it first decided in March, is in line with its "values to operate in the most responsible manner" following Russia's invasion of Ukraine in February. The impact on overall business will be minimal as Holcim generated less than 1% of its sales and recurring earnings before interest and tax in Russia in 2021, it said.
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By Heather Rydings, Alliance News senior economics reporter
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