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(Alliance News) - London's FTSE 100 is set to open lower on Monday, giving back some of last week's progress, when equities were boosted by hope of interest rate cuts.
The US Federal Reserve left rates unmoved, but a set of projections which accompanied its decision suggested three cuts are still in the offing this year.
The Bank of England also left its benchmark rate unmoved, but there is a growing conviction it will soon cut.
BoE Governor Andrew Bailey said that interest rates are in play this year, as signs that the risk of a wage-price spiral ebb. Bailey said he is increasingly confident that inflation is heading towards the bank's target in an interview with the Financial Times.
He signalled that markets were right to expect more than one interest rate cut this year, and stressed how small the technical recession last year had been.
In early UK corporate news, AstraZeneca announced a new drug approval in the US, while Kingfisher saw its annual profit fall.
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 0.2% at 7,741.12
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Hang Seng: marginally lower at 16,492.09
Nikkei 225: closed down 1.2% at 40,414.12
S&P/ASX 200: closed up 0.5% at 7,811.90
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DJIA: closed down 305.47 points, 0.8%, at 39,475.90
S&P 500: closed down 7.35 points, 0.1%, at 5,234.18
Nasdaq Composite: closed down 26.98 points, 0.2%, to 16,428.82
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EUR: down at USD1.0821 (USD1.0829)
GBP: down at USD1.2607 (USD1.2627)
USD: down at JPY151.24 (JPY151.46)
Gold: down at USD2,167.90 per ounce (USD2,173.50)
(Brent): up at USD85.22 a barrel (USD85.15)
(changes since previous London equities close)
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ECONOMICS
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Monday's key economic events still to come:
14:15 GMT UK Bank of England MPC member Catherine Mann speaks
12:25 GMT US Atlanta Fed President Raphael Bostic speaks
12:30 GMT US Chicago Fed national activity index
14:00 GMT US new home sales
14:30 GMT US Dallas Fed manufacturing business index
14:30 GMT US Federal Reserve Governor Lisa Cook speaks
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Prime Minister Rishi Sunak will on Monday announce GBP200 million of public investment to boost the UK's nuclear deterrent programme and its civil nuclear industry, which the government says will support 40,000 expected new jobs. The government will partner with industry leaders including BAE Systems, Rolls-Royce and EDF and Babcock to invest at least GBP763 million by 2030 in skills, jobs and education, Sunak's Downing Street office said in a press release ahead of his announcement. The investment aims to ensure that the northern England town of Barrow-in-Furness, where Sunak will make the announcement, "thrives as the home of UK nuclear submarine-building".
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EVE Energy is set to build the biggest gigafactory in the UK, The Sunday Times reported. The Guangdong, China-based electric vehicle batteries producer counts BMW among its customers and is the world's largest manufacturer of "Tesla-like" cylindrical car batteries. The planned factory on the outskirts of Coventry will initially see a GBP1.2 billion investment from EVE Energy for an initial 20 gigawatt capacity, with that set to expand to 60 gigawatt in following phases. EVE Energy reportedly made a multi-billion pound commitment in a letter to UK Chancellor Jeremy Hunt. The plant would create around 6,000 jobs and thousands more in the supply chain.
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BROKER RATING CHANGES
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HSBC cuts Prudential price target to 1,150 (1,745) pence - 'buy'
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JPMorgan places Intertek on 'positive catalyst watch'
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COMPANIES - FTSE 100
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AstraZeneca said its Ultomiris treatment has been approved by the US Food & Drug Administration as the first and only long-acting C5 complement inhibitor to treat some adult suffers of central nervous system disorder neuromyelitis optica spectrum. The Cambridge-based pharmaceutical company said this was based on positive results from the Champion-NMOSD phase 3 trial, in which Ultomiris met its primary endpoint. NMOSD is a rare autoimmune disease that affects the central nervous system, including the spine and optic nerves. "The diagnosed prevalence of adults with NMOSD in the US is estimated at approximately 6,000," AstraZeneca said.
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Kingfisher reported a decline in annual sales and profit, though the B&Q and Screwfix owner hailed a "resilient" performance in its UK and Ireland operation. Pretax profit fell 22% to GBP475 million in the financial year that ended January 31 from GBP611 million a year earlier, while sales fell 0.6% to GBP12.98 billion from GBP13.06 billion. Kingfisher maintained its total dividend for the year at 12.40 pence per share. Chief Executive Officer Thierry Garnier said: "In the UK & Ireland, B&Q, TradePoint and Screwfix each delivered resilient sales and market share growth - in particular very strong gains at Screwfix. In France, where the market has been impacted by low consumer confidence, we have made significant adjustments to the cost base and started to embed e-commerce marketplace and trade customer initiatives similar to those successfully implemented in the UK. And in Poland, where we faced strong comparatives and a tough economic backdrop, sales trends are gradually improving in line with the consumer environment." Like-for-like sales so far in the first-quarter are down 2.3% on-year, it said. It expects adjusted pretax profit for the new year in the range of GBP490 million to GBP550 million, potentially a 14% decline from what was achieved in the year just gone. Adjusted pretax profit in financial 2024 fell 25% to GBP568 million from GBP758 million.
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COMPANIES - FTSE 250
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Octopus Renewables Infrastructure Trust said its net asset value per share at its December 31 year-end stood at 90.00 pence, down 10% from 100.00p a year earlier. The NAV total return for 2023 was 2.1%, slowing from 12.4% in 2022. Pretax profit fell 82% to GBP12.7 million from GBP69.8 million. Investment income rose 6.0% to GBP42.7 million from GBP40.3 million, but its bottom line was hurt by a negative GBP23.0 million movement in fair value of investments, swinging from a gain of GBP37.6 million the prior year. The total dividend for 2023, however, increased 10% to 5.79p from 5.24p. Looking ahead, it has increased its total dividend target for 2024 by 4.0% to 6.02p, which it said was in line with UK consumer price inflation. Chair Phil Austin commented: "Despite the market challenges experienced in the investment trust sector in recent months, the fundamental driving forces behind clean energy investment are stronger than ever, and we believe that ORIT is very well placed to continue its contribution to the transition to net zero whilst ensuring an attractive level of returns for our shareholders."
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OTHER COMPANIES
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Money transfer services provider Wise announced the appointment of Delivery Hero Chief Financial Officer Emmanuel Thomassin as its next CFO on Monday, replacing Matthew Briers who had signalled his intention to step down from the role last year. Wise said Briers will now leave with immediate effect, with Thomassin joining at the start of October and Senior Group Financial Director Kingsley Kemish serving as interim CFO in the meantime. Chair David Wells commented: "We're delighted to welcome Emmanuel as our new Chief Financial Officer after an extensive global search. A seasoned CFO, leader and board member with well over a decade's experience, Emmanuel has a proven track record of scaling companies in rapidly-evolving industries - from startups to public companies. I look forward to working with him as Wise continues on its path to reshape global financial services for the 21st century."
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By Greg Rosenvinge, Alliance News senior reporter
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