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(Alliance News) - Stocks are called to open lower on Friday, following New York lower, as hopes of interest rate cuts have come into question.
In early economic news, UK retail sales fell in April, as miserable weather kept shoppers at home, according to a first estimate.
There was some good news for GSK, with the firm welcoming the jury verdict in the Valadez case in Illinois state court. The case was in GSK's favour.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: called down 0.9% at 8,263.60
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Hang Seng: down 1.6% at 18,568.15
Nikkei 225: closed down 1.2% at 38,646.11
S&P/ASX 200: closed down 1.1% at 7,727.60
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DJIA: closed down 605.78 points, or 1.5%, at 39,065.26
S&P 500: closed down 39.17 points, or 0.7%, at 5,267.84
Nasdaq Composite: closed down 65.51 points, or 0.4%, at 16,736.03
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EUR: down at USD1.0810 (USD1.0830)
GBP: down at USD1.2690 (USD1.2710)
USD: down at JPY157.08 (JPY157.13)
Gold: down at USD2,337.70 per ounce (USD2,340.90)
(Brent): down at USD81.33 a barrel (USD81.58)
(changes since previous London equities close)
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ECONOMICS
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Friday's key economic events still to come:
08:30 EDT Canada retail sales
08:45 CEST France business confidence
09:00 CEST Spain PPI
08:30 EDT US durable goods orders
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UK retail sales fell in April, as miserable weather kept shoppers at home, according to a first estimate on Friday. Retail sales fell by 2.7% in April from a year prior, the Office for National Statistics said. Sales had increased by 0.4% on-year in March, being revised up from being flat previously. According to FXStreet, retail sales were expected to fall by just 0.2% annually in April. Sales fell by 2.3% in April from March, following a 0.2% fall in March from February. March's reading was worse than consensus of just a 0.4% slip. "Sales volumes fell across most sectors, with clothing retailers, sports equipment, games and toys stores, and furniture stores doing badly as poor weather reduced footfall," the ONS said.
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The Tory and Labour parties clashed on energy policy for the UK as the general election campaign focused on the prospect of cheaper household bills. Labour leader Keir Starmer is using a visit to Scotland to promote his plan for a publicly-owned green electricity generator, which he said would cut bills and boost energy security. Energy Secretary Claire Coutinho set out plans for consumer-friendly changes and accused Labour of not being "honest about the costs" that their plans for net zero power would involve. The row came as regulator Ofgem early Friday set out the latest level for the energy price cap on average bills. The watchdog said the average household energy bill will drop by around 7% from July 1, when the latest change to the price cap takes effect. This means the average UK household will pay GBP122 less per year.
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BROKER RATING CHANGES
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HSBC cuts Aviva to 'hold' - price target 525 pence
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Berenberg starts Andrada Mining with 'buy' - price target 10 pence
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HSBC cuts Midwich Group to 'hold' - price target 425 pence
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COMPANIES - FTSE 100
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GSK welcomed the jury verdict in the Valadez case in Illinois state court finding in GSK's favour in the first Zantac case to go to trial. "This outcome is consistent with the scientific consensus that there is no consistent or reliable evidence that ranitidine increases the risk of any cancer, supported by 16 epidemiological studies looking at human data regarding the use of ranitidine," GSK said. It added that it "will continue to vigorously defend itself against all other claims." Zantac was a heartburn drug that was pulled off the market in 2020 at the request of the US Food & Drug Administration, after low levels of a "probable carcinogen" were found in samples. The carcinogen, known as NDMA, is not harmful in very small amounts. However, tests showed that there were excessive quantities of NDMA in ranitidine, otherwise known as Zantac. Multiple litigations have followed. Also on Friday, GSK said that findings across its oncology portfolio will be presented in 25 abstracts at the 2024 American Society of Clinical Oncology annual meeting.
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Intertek said that between January and April it reported revenue of GBP1.08 billion, representing growth of 7.5% at constant currency and 2.0% at actual rates. It said margin progression was driven by pricing, operating leverage, cost controls and productivity improvements. Looking ahead, Intertek reconfirmed 2024 outlook. CEO Andre Lacroix said: "We expect the group will deliver a robust performance with mid-single digit LFL revenue growth at constant currency, margin progression and a strong cash flow performance. We are well positioned to get back to our peak margin of 17.5% and beyond in the medium-term, capitalising on the revenue growth acceleration we are seeing for our ATIC solutions, our disciplined performance management and our investments in high growth and high margin segments."
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COMPANIES - FTSE 250
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John Wood said it has received a third unsolicited, preliminary and conditional proposal from Dar Al-Handasah Consultants Shair & Partners Holdings Ltd, known as Sidara, for a cash offer of 220 pence per Wood share. This represents an increase of approximately 3.8% to the previous proposal of 212 pence per Wood share submitted on May 14. The company said the new offer "continued to significantly undervalue the group and its prospects." It has therefore rejected the proposal.
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abrdn said that Stephen Bird as stepped down as CEO, after four years in the role. Jason Windsor, currently chief financial officer, has been appointed as interim CEO. It has also launched a formal search process for a permanent CEO, which includes the consideration of external candidates. Chair Douglas Flint said: "Jason brought significant and relevant leadership experience to abrdn and since his arrival last year has made a strong start. The board looks forward with confidence to working with him in his new role as our interim group CEO."
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OTHER COMPANIES
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Coventry Building Society said it has agreed to buy Co-operative Bank in a GBP780 million deal. Coventry Building Society said owners of 88% of Co-operative Bank A shares agreed to the takeover, whilst owners of 100% of B shares agreed. It noted that up to GBP125 million of Co-operative Bank cash payment is deferred over three years. It added that Coventry Building Society will remain as a building society following the Co-operative Bank takeover. The acquisition is expected to complete in the first quarter of 2025. Coventry Building Society CEO Steve Hughes said: "By bringing together Coventry Building Society and The Co-operative Bank we will be able to deliver more value to more people in the coming years. I am excited about the opportunities that lie ahead, most importantly, our ability to sustain the great value and outstanding service that matters most to our members."
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Tribal Group said it has reached a settlement agreement with Nanyang Technological University. Without admission of liability, the Bristol-based educational software and services provider has agreed to pay to NTU GBP3.1 million in full and final settlement, over the next 18 months.
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By Sophie Rose, Alliance News senior reporter
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