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(Alliance News) - Stocks in London are set to open up and add to Monday's gains, ahead of a slew of economic data.
Stocks in London got a boost on Monday, after a member of the Bank of England's interest rate-setting committee said he thinks UK inflation could return to the target level and stay there for longer than the central bank's own predictions.
Dave Ramsden said the UK is no longer an "outlier" but a "laggard" when it comes to its inflation performance, meaning it is slowly but surely catching up with international peers including the US and the eurozone.
In early corporate news, housebuilder Taylor Wimpey reiterated guidance thanks to its Spring selling season. Primark-owner Associated British Foods eyed annual profit ahead of expectations, thanks to a good set of interim results.
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 8,072.40
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Hang Seng: up 1.7% at 16,790.99
Nikkei 225: closed up 0.3% at 37,552.16
S&P/ASX 200: closed up 0.5% at 7,683.50
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DJIA: closed up 253.58 points, 0.7%, at 38,239.98
S&P 500: closed up 0.9% at 5,010.60
Nasdaq Composite: closed up 1.1% at 15,451.31
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EUR: up at USD1.0652 (USD1.0642)
GBP: up at USD1.2342 (USD1.2336)
USD: flat at JPY154.77 (JPY154.78)
Gold: down at USD2,307.77 per ounce (USD2,337.50)
(Brent): up at USD87.22 a barrel (USD86.92)
(changes since previous London equities close)
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ECONOMICS
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Tuesday's key economic events still to come:
10:00 CEST eurozone flash composite PMI
09:15 CEST France flash composite PMI
09:30 CEST Germany flash composite PMI
16:30 SAST South Africa Monetary Policy Review
09:30 BST UK flash composite PMI
12:15 BST UK BoE Chief Economist Huw Pill speaks
07:20 EDT US building permits
08:55 EDT US Redbook index
09:45 EDT US flash composite PMI
10:00 EDT US new home sales
10:00 EDT US Richmond Fed manufacturing index
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The UK's public sector borrowing surplus fell in March from the year before, according to the Office for National Statistics on Tuesday. UK public sector net borrowing, excluding public sector banks, was GBP11.9 billion in March. This was GBP4.7 billion less than in March last year. Meanwhile, in the fiscal year to March, it was GBP120.7 billion. This is GBP7.6 billion less than the equivalent 12-month period of the prior year, but GBP6.6 billion more than forecast by the Office for Budget Responsibility.
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BROKER RATING CHANGES
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Jefferies raises Reckitt to 'hold' (underperform) - price target 4,400 (4,100) pence
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Berenberg cuts Learning Technologies to 'hold' (buy) - price target 90 (120) pence
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COMPANIES - FTSE 100
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Taylor Wimpey said the Spring selling season is progressing in line with our expectations, ahead its annual general meeting later on Tuesday. Looking ahead, the housebuilder reiterated guidance. It said it expects 2024 UK completions to be in range of 9,500 to 10,000, with completions weighted 45% to 55% in favour of the second half of the year. Chief Executive Jennie Daly said: "We have made a good start to 2024 with the Spring selling season progressing as expected. While we are mindful of ongoing market uncertainty and affordability challenges, it is pleasing to see continued market stability supported by good mortgage availability and sustained customer confidence."
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Associated British Foods revenue rises to GBP9.73 billion in the 24 weeks ended March 2, from GBP9.56 billion a year earlier. Pretax profit jumps 37% to GBP881 million from GBP644 million. On the back of higher profit, the Primark owner upped its interim dividend by 46% to 20.7p from 14.2p. Looking ahead, AB Foods said it is on track to deliver growth in both profitability and cash generation ahead of expectations. CEO George Weston said: "Looking ahead, we continue to invest with discipline to build further sustainable growth. Geopolitical risks remain, of course, and the consumer has yet to fully emerge from cost of living pressures. But the group is well positioned to deliver good returns to shareholders."
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JD Sports Fashion announced plans to buy Hibett for an enterprise value of USD1.11 billion. Hibbett is listed on the Nasdaq in the US, and is a Birmingham, Alabama sports fashion-inspired retailer. It is located in 36 states across the US, JD noted. "The transaction represents an important strategic milestone for the group, accelerating its growth plans in North America and aligning with the group's stated strategy of enhancing its presence in the world's biggest and most attractive sportswear market," it added.
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COMPANIES - FTSE 250
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Petershill Partners plans to return up to GBP100 million to shareholders through a tender offer. It said it will tender up to 37.9 million shares, priced at GBP2.14 each. The price reflects a 15% discount to the closing price of 186p on Monday. "Given the current share price and the company's cash resources, the directors believe that the tender offer provides a meaningful opportunity for the company to invest in its own portfolio at a significant discount to current valuations, offering a very attractive investment opportunity to increase its exposure to assets the company knows well, whilst also providing liquidity to shareholders who may wish to sell ordinary shares," Petershill said.
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OTHER COMPANIES
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RWS reported that organic constant currency revenue fell by 2% in the six months ended March 31. Reported revenue is expected to be GBP350 million, down 4% on prior year. Adjusted pretax profit is expected to be about GBP45 million in the first half, down from GBP54 million. "This reflects weaker performance in some parts of our higher margin businesses, an unfavourable mix of work in parts of Language Services, ongoing investments and year-on-year foreign exchange differences, partially mitigated by increased use of the Language eXperience Delivery platform and the cost reduction exercise conducted in H2 FY23," RWS explained.
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Westpac Banking warned net profit after tax will be reduced by AUD164 million in the first half of its financial year 2024 by "notable items". The Sydney-based lender said these are unrealised fair value gains and losses on economic hedges and net ineffectiveness on hedges, which Westpac notes will reverse over time. The hedging items will reduce net interest income by AUD224 million and non-interest income by AUD2 million. Balanced against these will be a AUD62 million income tax benefit. The bank will release its results for the six months that ended March 31 on May 6. It notes these will reflect changes to its operating segments, following the creation separate Consumer and Business & Wealth operating units and the dissolution of the Specialist Businesses division.
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By Sophie Rose, Alliance News senior reporter
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