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(Alliance News) - Stocks in London are called higher on Tuesday, as largely positive sentiment prevails across global equity markets.
In early UK economic news, government borrowing dropped sharply in December, reaching multi-year lows for the month.
In Asia, Japanese equities edged into the red, after the Bank of Japan left its ultra-loose monetary policy in place. Sentiment was more upbeat in China, however, with reports that Chinese authorities are looking at potential stimulus measures for stocks.
Meanwhile, markets in New York continued to push record highs as earnings season ramps up.
"Moving forward, the earnings announcements will take center stage, with Netflix due to announce its Q4 results today after the bell. The streaming giant expects to have added millions more of new paid subscribers to its platform after it scrapped password sharing last year," said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
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 22.4 points, 0.3%, at 7,510.11
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Hang Seng: up 3.0% at 15,409.60
Nikkei 225: closed down 0.1% at 36,517.57
S&P/ASX 200: closed up 0.5% at 7,514.90
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DJIA: closed up 0.4% at 38,001.81
S&P 500: closed up 0.2% at 4,850.43
Nasdaq Composite: closed up 0.3% at 15,360.28
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EUR: up at USD1.0911 (USD1.8990)
GBP: up at USD1.2745 (USD1.2717)
USD: down at JPY147.34 (JPY147.94)
Gold: up at USD2,031.86 per ounce (USD2,024.07)
Oil (Brent): up at USD80.19 a barrel (USD79.73)
(changes since previous London equities close)
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ECONOMICS
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Tuesday's key economic events still to come:
16:00 CET eurozone consumer confidence
08:55 EST US Redbook index
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UK government borrowing dropped sharply in December, figures from Office for National Statistics showed. Public sector net borrowing, excluding public sector banks, amounted to GBP7.8 billion - some GBP8.4 billion less than the prior year. It was the lowest level for December since 2019. Borrowing in the financial year to December was GBP119.1 billion, which was the fourth-highest for the period on record. It was 10% higher than the equivalent nine-month period of the prior fiscal year. Public sector net debt excluding public sector banks was GBP2.686 trillion, which is provisionally estimated to be around 97.7% of the UK's annual gross domestic product.
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The US and Britain launched new strikes on Yemen's Houthis Monday, saying their second round of joint military action against the Iran-backed rebels was in response to continued attacks on Red Sea shipping. American and British forces carried out a first wave of strikes against the rebel group earlier this month, and the US launched further air raids against missiles that Washington said posed imminent threats to both civilian and military vessels. The latest US-UK strikes were against "eight Houthi targets in Yemen in response to the Houthis' continued attacks against international and commercial shipping as well as naval vessels transiting the Red Sea," Washington and London said in a joint statement with other countries that supported the military action.
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Britain's unelected upper house of parliament inflicted a blow to the government's controversial plan to send migrants to Rwanda, by voting to delay ratification of the treaty with Kigali. The move is a blow for Prime Minister Rishi Runak, who had urged the House of Lords to pass the plan, saying it was the will of the people. A majority of peers – 214 against 171 – voted to delay ratification of the treaty that London signed with Kigali until the British government has demonstrated that Rwanda is a safe country for migrants who would be deported there.
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BROKER RATING CHANGES
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HSBC cuts Compass Group to 'hold' (buy) - price target 2,370 (2,345) pence
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HSBC cuts FirstGroup to 'hold' (buy) - price target 180 (155) pence
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Berenberg cuts Victrex to 'hold' (buy) - price target 1,680 (2,090) pence
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COMPANIES - FTSE 100
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Associated British Foods reported mostly positive trading in its first quarter, the 16 weeks to January 6. The company said revenue rose 2.8% to GBP6.89 billion, or by 5.4% in constant currency. For Primark, sales rose 7.9% in constant currency, with the period getting off to a slow start amid unseasonal warm weather, but seeing strong Christmas trading. Like-for-like Primark sales rose 2.1% due to higher average selling prices. The firm said it finished the period with stock levels "in a good position", and will continue to monitor the situation in the Red Sea, but does not anticipate significant disruption to its supply chain. "The group continues to trade well. We continue to look forward to a year of meaningful progress in both profitability and cash generation, with the profitability improvement being driven by a recovery in Primark margin, a marked improvement in British Sugar profitability, and by reduced losses at Vivergo," AB Foods said.
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COMPANIES - FTSE 250
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Housebuilder Crest Nicholson said it has appointed Persimmon's Martyn Clark as its new chief executive, replacing Peter Truscott, who is retiring after joining the firm in 2019. Clark is currently the chief commercial officer at rival Persimmon, and will join Crest later this year. Crest also reported its annual results for the year ended October 31. Revenue fell 28% year-on-year to GBP657.5 million from GBP913.6 million, while pretax profit dropped 30% to GBP23.1 million from GBP32.8 million. Home completions dropped similarly by 26% to 2,020 from 2,734. Still, the firm left its total dividend unchanged at 17.0 pence per share. "Recently there has been some positive macro trends with inflation and mortgage rates falling, which bode well for the housing sector. Although it is too early to gauge customer behaviour, we have been encouraged by an increase in customer interest levels and inquiries this calendar year," said outgoing CEO Truscott.
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OTHER COMPANIES
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Online fast fashion retailer boohoo announced its chief financial officer, Shaun McCabe, stepped down from his role and the board with immediate effect by mutual agreement. He had been CFO since October 2022. No reason was provided for his departure. Replacing McCabe is Stephen Morana, who will step into the role on February 19. He was most recently an executive at Cazoo, and previously CFO of Betfair and Zoopla, leading both through their initial public offerings. He was previously a non-executive director at boohoo from 2014 to 2017. boohoo added that trading remains in line with market expectations.
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Pub operator Marston's reported strong trading over Christmas, ahead of its annual general meeting later on Tuesday morning. In the 16 weeks to January 20, total retail sales in the firm's managed and franchised pubs rose 8.8% year-on-year, with strong sales of both food and drink. On a like-for-like basis, sales were up 8.1%. "It has been an encouraging start to the year. This, together with an improving outlook in which inflationary headwinds are broadly abating, and the actions we are taking to operate more efficiently and rebuild margins, position Marston's well for the year ahead," said CEO Justin Platt.
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By Elizabeth Winter, Alliance News deputy news editor
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