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(Alliance News) - Stocks in London are called slightly lower on Thursday, ahead of a central bank decision in the eurozone, and US economic growth data.
The European Central Bank will announce its interest rate call this afternoon, with the market pricing in a third consecutive hold. The focus will remain on any guidance for the timing of rate cuts. While the market is pricing in a first 25 basis point cut in April, ECB President Christine Lagarde's recent comments have suggested the bank itself is pencilling in the first cut in the summer.
"The rising shipping costs and the positive pressure in oil prices mean that upside risks prevail. Yet the slowdown in European economies calls for lower rates," considered Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
Another key focus point for the day will be the US economic growth data this afternoon.
The Bureau of Economic Analysis will report gross domestic figures, which are forecast to show that the US economy grew by 2.0% in the three months through December, slower than the 4.9% annualised growth recorded in the third quarter.
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 7.0 points, 0.1%, at 7,520.67
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Hang Seng: up 1.8% at 16,186.60
Nikkei 225: closed up 9.99 points at 36,236.47
S&P/ASX 200: closed up 0.5% at 7,555.40
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DJIA: closed down 98.06 points, 0.3%, at 37,806.39
S&P 500: closed up 0.1% at 4,868.55
Nasdaq Composite: closed up 0.4% at 15,481.92
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EUR: down at USD1.0884 (USD1.0904)
GBP: down at USD1.2722 (USD1.2744)
USD: up at JPY147.71 (JPY147.33)
Gold: up at USD2,015.61 per ounce (USD2,012.59)
Oil (Brent): down slightly at USD80.31 a barrel (USD80.44)
(changes since previous London equities close)
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ECONOMICS
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Thursday's key economic events still to come:
14:15 CET eurozone interest rate decision
10:00 CET Germany Ifo - business climate
08:30 EST US durable goods orders
08:30 EST US initial jobless claims
08:30 EST US wholesale inventories
08:30 EST US GDP
10:00 EST US new home sales
10:30 EST US EIA natural gas storage
11:00 EST US Kansas City Fed manufacturing activity
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David Cameron told Benjamin Netanyahu of the need for a two-state solution after the Israeli prime minister rejected allies' demands for Palestinian statehood. The foreign secretary warned of "unimaginable" suffering in Gaza after he reiterated his call for an "immediate humanitarian pause" in a meeting in Jerusalem on Wednesday. The Tory peer urged Israel to open more crossing points into Gaza to allow crucial humanitarian aid into the besieged strip. He also called for the protection of medics and hospitals after their destruction in the war in Gaza triggered by Hamas's wave of bloodshed in Israel on October 7.
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Car production in Britain last year hit the highest level since 2019, or before the Covid pandemic, an industry body said Thursday as it warned of bumps in the road. Output by the country's mainly foreign-owned car producers, including Nissan and Jaguar Land Rover, reached just over 905,000 units in 2023, up nearly 17% from a year earlier, the Society of Motor Manufacturers & Traders said in a statement. "The easing of pandemic-related challenges, from chip shortages to lockdowns, and increasing electrified model production, combined to drive annual output," it added.
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BROKER RATING CHANGES
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JPMorgan raises Admiral Group to 'neutral' (underweight) - price target 2,550 (1,700) pence
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Berenberg raises Howden Joinery Group price target to 930 (835) pence - 'buy'
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COMPANIES - FTSE 100
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Consumer healthcare firm Haleon said it has agreed to sell the ChapStick brand to Suave Brands Co, which is a portfolio company of Yellow Wood Partners. Haleon will receive pre-tax cash proceeds of around USD430 million, as well as a passive minority interest in Suave Brands valued at around USD80 million. It will use the proceeds to pay down debt, "underpinning [its] confidence to de-level to net debt/adjusted Ebitda of below 3 times during 2024". Haleon expects the sale to close in the second quarter. ChapStick generated GBP112 million in revenue in 2023. "While ChapStick is a great brand, much loved by consumers around the world, it is not a core focus for Haleon. Selling the brand allows us to simplify our business and pay down debt more quickly. We're confident the brand will continue to thrive under its new ownership," said CEO Brian McNamara.
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Rio Tinto updated on the plane cash near Forth Smith, Northwest Territories, Canada. The miner said the charter plane, which was on its way to Diavik diamond mine, crashed killing four team members and two airline crew. Another team member survived the crash and received treatment in hospital. "We are feeling numb with the devastating news that we have lost dear friends and colleagues. I extend our deepest sympathy to the families, friends, and loved ones of those who have been affected by this tragedy. I am heading to the Northwest Territories to be with our team and to offer our full support. We will be working closely with authorities over the coming days, weeks and months, to support their efforts to understand the full facts of what has happened," said Chief Executive Jakob Stausholm.
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RS Group said it saw "weaker than anticipated" markets in its third quarter ended December 31. The industrial products and services provided said revenue increased 1% in the third quarter, but fell 10% on a like-for-like basis. This reflected "weak industrial sentiment" and a "slower unwinding of customer surplus inventory, particularly in electronics and associated products". RS Group commented: "Notwithstanding continuing geopolitical uncertainty, extended holiday periods and extreme weather, trading in Asia Pacific is improving, [Europe, the Middle East & Africa] is stable and Americas remains challenging with Q4 comparators easing."
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COMPANIES - FTSE 250
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Wizz Air reported a third quarter of double-digit topline growth in the three months to December 31. The budget airline said revenue grew 17% year-on-year to EUR1.06 billion from EUR911.7 million, as passengers carried jumped 22% to 15.1 million. Its operating loss widened to EUR180.4 million from EUR155.5 million. "Wizz Air continued to deliver industry-leading capacity growth during the third quarter, ahead of the anticipated grounding of aircraft in Q4 as geared turbofan engines are removed for mandatory inspections. We have worked hard to adjust the schedule in line with updated capacity projections, focusing on seasonality and markets with the greatest potential to deliver stronger yields and optimal operational performance. We continue to actively manage the GTF engine issues to minimize the impact on our operations," said CEO Jozsef Varadi. Early fourth-quarter trading has been positive, Varadi added, with selling load factors trending at a similar level to last year, while unit revenues have risen annually. After cancelling around 6% of its planned capacity in the third quarter due to the Israel crisis, it plans to restart operations into Israel from the beginning of March.
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Dr Martens said its third-quarter performance was in line with its November guidance. In the three months to December 31, revenue fell 21% year-on-year to GBP267.1 million, while revenue in the year-to-date was 12% behind the prior year at GB662.9 million. Ecommerce revenue fell 9%, driven by a decline in Americas. Retail revenue was flat, while wholesale revenue plunged 49%, with significant declines seen in Americas and EMEA. "The guidance provided at the time of our H1 results, for full year [constant currency] revenue decline of high single-digit percentage year-on-year, remains unchanged," the bootmaker said.
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OTHER COMPANIES
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Helium One said its Itumbula West-1 well in Tanzania has successfully reached a total depth of 961 metres. Elevated helium shows, which were twenty times above background, were consistently measured while drilling the Lake Beds Formation, Red Sandstone Group, Karoo Group and Basement targets, the primary helium explorer said. "The initial results from the Itumbula West-1 well are very positive. We have encountered elevated helium shows, as the team had anticipated pre-drill, all the way to Basement. The wireline logs are the crucial next step in identifying which intervals we will test and sample for further evaluation," said CEO Lorna Blaisse.
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By Elizabeth Winter, Alliance News deputy news editor
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