(Alliance News) - Stocks in London are set to start a key week for central bank meetings on the front foot, lifted by gains in Tokyo and New York.
In early UK company news, Barclays said Jes Staley has agreed to leave as chief executive following a probe by UK regulators into his description of his relationship with Jeffery Epstein. Land Securities has agreed to buy U&I Group in a GBP190 million deal, and Ryanair posted a jump in half-year revenue and in October passenger traffic.
IG says futures indicate the FTSE 100 index of large-caps to open 30.43 points, or 0.4%, higher at 7268.00 on Monday. The FTSE 100 closed down 11.90 points, or 0.2%, at 7,237.57 on Friday.
"As we look ahead to today's market open, we can expect to see a positive start to the week, after the Nikkei 225 got off to a flier after a decisive win for the ruling Liberal Democrats...and as we look to the latest economic announcements in the form of manufacturing PMI numbers from the UK and US which are expected to remain fairly resilient," said Michael Hewson, chief market analyst at CMC Markets.
The Nikkei 225 index on Monday surged 2.6% after election results over the weekend showed Japan's ruling Liberal Democratic Party, together with its coalition partner Komeito, has defended its majority in the country's lower house of the national parliament, despite seeing some losses.
Prime Minister Fumio Kishida's LDP achieved an absolute majority, garnering more than 233 of the 465 seats in Sunday's elections, Japanese broadcaster NHK reported. Together with Komeito, the party secured a stable majority of more than 260 seats in the authoritative chamber of the national parliament.
The election was seen as a referendum on nearly nine years of LDP rule under Kishida's predecessors Shinzo Abe and Yoshihide Suga.
Against the yen, the dollar rose to JPY114.36 versus JPY114.02.
However, the mood across the rest of Asia was mixed. In China, the Shanghai Composite closed down 0.1%, while the Hang Seng index in Hong Kong was down 1.0%. The S&P/ASX 200 in Sydney ended up 0.6%.
Stocks in China wobbled after a survey showed the manufacturing sector registered a slight expansion in October, though gains were capped by power shortages.
The Caixin China general manufacturing purchasing managers' index came in at 50.6 points in October, improving from September, when it sat at the 50.0 no change mark. Markit noted power constraints meant inflationary pressure accelerated once again. Average input prices rose at the sharpest pace since December 2016.
Still ahead on Monday is the UK manufacturing PMI at 0930 GMT, the US IHS Markit PMI at 1345 GMT, and the ISM US manufacturing report at 1400 GMT.
The UK manufacturing PMI for October is expected to confirm the flash figure of 57.7 points, according to FXStreet. This would mark an improvement on September's 57.1.
Ahead of the data, sterling was quoted at USD1.3656 early Monday, down from USD1.3697 at the London equities close on Friday. The euro traded at USD1.1556, soft again USD1.1564 late Friday.
The highlight of the events calendar this week comes on Wednesday in the form of the US Federal Reserve, which is expected to make a formal QE taper announcement, and on Thursday from the Bank of England, where a 15 basis point interest rate hike is widely anticipated.
In the US on Friday, Wall Street ended higher, with the Dow Jones Industrial Average up 0.3%, the S&P 500 up 0.2% and the Nasdaq Composite up 0.3%
Gold was quoted at USD1,784.77 an ounce early Monday, higher than USD1,778.08 on Friday. Brent oil was trading at USD83.48 a barrel, down from USD84.27 late Friday.
Barclays said Staley is stepping down as CEO in order to contest probes into his description of his relationship with the disgraced late financier, Jeffery Epstein.
In light of the UK Financial Conduct Authority and Prudential Regulation Authority's conclusions, and Staley's intention to contest them, he has agreed to part ways with the lender, Barclays said. The bank said it and Staley were made aware of the preliminary conclusions from the FCA and PRA on Friday evening.
Barclays said it was "disappointed" with the outcome, saying Staley has run the company "with real commitment and skill" since 2015.
Barclays added: "It should be noted that the investigation makes no findings that Staley saw, or was aware of, any of Epstein's alleged crimes, which was the central question underpinning Barclays' support for Staley following the arrest of Epstein in the summer of 2019."
Epstein, a convicted sex offender, died by suicide while awaiting trial on trafficking charges.
"The regulatory process still has to run its full course and it is not appropriate for Barclays to comment further on the preliminary conclusions," said Barclays.
Staley's successor will be CS Venkatakrishnan, known as Venkat, effective from Monday. Barclays said it has had succession planning in hand "for some time" and identified Venkat, head of Global Markets and co-president of Barclays Bank PLC, as its preferred candidate over a year ago.
FTSE 100-listed property developer Land Securities has agreed to buy U&I Group in a deal worth GBP190 million.
LandSec has offered 149 pence per U&I share, representing a 73% premium to Friday's closing price of 86p. The deal has been unanimously endorsed by U&I directors, LandSec said.
U&I is a London-based mixed-use space regeneration and property specialist.
"Landsec set out a strategy in October 2020 to recycle investment in order to drive growth and generate higher returns, including through urban opportunities in London and other major regional cities. The acquisition accelerates that strategy, adding an attractive pipeline of mixed-use urban development opportunities along with complementary skills and expertise," LandSec said.
The deal is expected to close next month or early 2022.
Howden Joinery said it has seen strong second-half sales and profitability as pent-up demand and an ability to pass on higher input costs have continued.
It now expects full-year pretax profit to be around the top end of current analyst forecasts, putting this range between GBP298 million to GBP360 million.
Howdens UK depots' total revenue for the period June 13 to October 30 rose by 21% and by 19% on a same depot basis year-on-year. Compared with 2019, Howdens UK depots' total revenue was up 36%.
Exceptional factors, such as pent-up demand, "market leading" product availability, and being able to pass-on higher input costs through selling prices, have continued into the second half, the supplier of kitchens and joinery products said.
Howden Joinery added: "The board remains confident in our business model for the future but anticipates returning to a more normalised trading pattern and performance in 2022, which will make the comparators from 2021 challenging."
Ryanair reported a jump in October passengers as travel restrictions in the UK eased. The Irish low-cost airline carried 11.3 million passengers last month, nearly triple the 4.1 million travellers recorded in October 2020.
It also marked an improvement from August 2021's traffic figure of 11.1 million and September at 10.6 million.
Late last month, the UK government relaxed travel rules for returning UK holidaymakers who are fully vaccinated. Fully vaccinated people arriving in England from a non-red list country can now use a lateral flow test rather than the more expensive PCR version on or before day two.
Further, the UK government on Monday removed the remaining countries on England's red travel list.
Transport Secretary Grant Shapps wrote on Twitter: "We will keep the red list category in place as a precautionary measure to protect public health and are prepared to add countries and territories back if needed, as the UK's first line of defence."
Earlier on Monday, Ryanair posted a first half revenue hike and a narrowed loss, as the carrier benefited from a rebound in passenger numbers.
In the six months to September 30, revenue rose 83% year-on-year to EUR2.15 billion from EUR1.18 billion. Ryanair's pretax loss narrowed to EUR99.9 million, from EUR432.3 million a year earlier. Two-years ago, the airline booked an interim pretax profit of EUR1.26 billion.
By Lucy Heming; lucyheming@alliancenews.com
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