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(Alliance News) - Stocks in London are expected to edge higher at the open on Monday, after the second half of 2023 got off to a strong start in Asia.
"The first half of the year ends on a positive note for equities and not so much for the bonds," said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
"Equities did well. Even though profits fell, they fell less than expected and more importantly, AI saved the day, sending the 'big tech' stocks to a nice bull market. Bonds on the other hand tumbled as US [consumer] spending and growth remained resilient."
Markets in Asia took their cue from the strong performance on Wall Street on Friday, despite some weak economic data for China and Japan, which pointed to a slowdown in factory activity.
The Caixin purchasing managers' index for China's manufacturing indicated marginal growth in June, albeit at a slower pace than in May.
Meanwhile, the au Jibun Bank PMI for Japan showed its manufacturing sector slipped back into a slight contraction. Respondents in Japan noted especially weak demand from mainland China, with exports orders continuing to fall.
In early UK company news, Tesco said the chair of Burberry, Gerry Murphy, will become its chair in September. Murphy will stay on at Burberry, but step down from his role as chair of Tate & Lyle. Anglo American's diamond arm, De Beers, reached an eleventh-hour deal with the Botswanan government on Friday after months of tense negotiations.
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 3.0 points at 7,534.53
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Hang Seng: up 2.0% at 19,296.49
Nikkei 225: closed up 1.7% at 33,753.33
S&P/ASX 200: closed up 0.6% at 7,246.10
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DJIA: closed up 285.15 points, 0.8%, at 34,407.60
S&P 500: closed up 53.94 points, 1.2% at 4,450.38
Nasdaq Composite: closed up 196.59 points, 1.5% at 13,787.92
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EUR: down at USD1.0907 (USD1.0916)
GBP: down at USD1.2692 (USD1.2706)
USD: flat at JPY144.52 (JPY144.58)
GOLD: up at USD1,917.65 per ounce (USD1,915.48)
OIL (Brent): down at USD75.28 a barrel (USD75.58)
(changes since previous London equities close)
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ECONOMICS
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Monday's key economic events still to come:
09:55 CEST Germany manufacturing PMI
10:00 CEST EU manufacturing PMI
09:30 BST UK manufacturing PMI
09:45 EDT US manufacturing PMI
10:00 EDT US ISM manufacturing PMI
11:00 EDT US manufacturing PMI
13:00 EDT US financial markets close early for Independence Day holiday
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A new limit on emissions for the power sector, energy intensive and aviation industries will come into force in the UK from next year, it has been announced. Under the limit, the industries will be required to bring their emissions down at the rate needed to reach net zero goals. The announcement forms part of a package of reforms unveiled by the UK Emissions Trading System Authority, the joint body comprising the UK government, Scottish government, Welsh government and the Department of Agriculture, Environment & Rural Affairs in Northern Ireland that runs the emissions trading scheme. The UK ETS incentivises decarbonisation through a process of buying and selling emissions allowances, which companies must obtain for every tonne of emissions they produce each year.
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BROKER RATING CHANGES
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Stifel cuts Croda International to 'hold' (buy) - price target 5,800 (7,700) pence
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Barclays cuts Keywords Studios price target to 2,225 (3,250) pence - 'overweight'
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COMPANIES - FTSE 100
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Supermarket chain Tesco named Gerry Murphy as its new chair from September 1. Murphy is currently chair of luxury fashion firm Burberry and food supplier Tate & Lyle, and will step down from his role at the latter to "ensure he has sufficient capacity" for his new role at Tesco. Murphy was also previously CEO at Kingfisher, and has held non-executive directorships at companies including British American Tobacco and Reckitt Benckiser. "He was the unanimous choice of the board and will bring to our board a record of strong and effective boardroom leadership and a deep understanding of retail and consumer-focused businesses and corporate governance," said Byron Grote, Tesco's interim chair.
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Botswana has reached an eleventh-hour deal with diamond miner and marketer De Beers after months of tense negotiations that saw the continent's top producer threatening to cut ties with the storied company. The Botswana government and Anglo-American, the majority owner of De Beers, have reached an "agreement in principle", the two sides said in a statement issued late Friday. The agreement provides for a new 10-year agreement to sell the rough diamonds produced by Debswana – a joint venture equally owned by the government and De Beers – and a 25-year extension of its mining licenses. No value was given for the agreement.
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COMPANIES - FTSE 250
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IG Group said its chief executive officer, June Felix, is taking a "short period" of medical leave. CFO Charlie Rozes will become acting CEO, taking over her day-to-day responsibilities.
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John Wood Group announced it has secured a contract extension worth around USD250 million with Brunei Shell Petroleum. The two-year extension will focus on continuing to rejuvenate BSP's offshore energy asset portfolio, the consulting and engineering company said. "This extension shows progress on our strategy; which focuses on reimbursable projects and complex work in critical industries; that we laid out last year and demonstrates the strength of our relationship with an important client in a key region," said CEO Ken Gilmartin.
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OTHER COMPANIES
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Software-as-a-service company Eagle Eye said it has won a five-year contract with UK supermarket chain Morrisons, to develop its loyalty and promotional offering. Eagle Eye said its AIR platform will be used to enhance the supermarket's loyalty programme, by creating more ways of engaging with customers, and helping scale the number of broadcast and targeted offers available. It will be rolled out to all 499 stores across the UK, and is expected to go live later this year. No financial details were provided.
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By Elizabeth Winter, Alliance News senior markets reporter
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