(Correcting that Diageo's profit fell.)
(Alliance News) - Stocks in London opened higher on Tuesday, ahead of some key economic data and monetary policy decisions.
The economic calendar for this week has the US Federal Reserve announcing its latest interest rate decision on Wednesday at 1900 GMT, followed by the Bank of England on Thursday at 1200 GMT. Both central banks are expected to keep rates on hold.
Before then, investors will be digesting news that shop price inflation in the UK fell in January to its lowest rate since May 2022 as retailers offered heavy discounts to entice customers.
Still to come on Tuesday, there is gross domestic product data from the eurozone at 1000 GMT.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.3% at 7,656.13
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Hang Seng: down 2.4% at 15,694.99
Nikkei 225: closed up 0.1% at 36,065.86
S&P/ASX 200: closed up 0.3% at 7,600.20
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DJIA: closed up 224.02 points, 0.6%, at 38,333.45
S&P 500: closed up 36.96 points, 0.8%, at 4,927.93
Nasdaq Composite: closed up 172.68 points, 1.1%, to 15,628.04
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EUR: up at USD1.0815 (USD1.0802)
GBP: up at USD1.2696 (USD1.2675)
USD: down at JPY147.38 (JPY147.72)
Gold: up at USD2,034.55 per ounce (USD2,026.77)
(Brent): up at USD82.07 a barrel (USD82.01)
(changes since previous London equities close)
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ECONOMICS
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Tuesday's key economic events still to come:
11:00 CET eurozone consumer confidence
11:00 CET eurozone economic sentiment index
11:00 CET eurozone GDP
10:00 CET Germany GDP
11:00 GMT Ireland GDP
10:00 CET Italy GDP
11:00 CET Italy PPI
09:00 CET Spain CPI
08:00 CET Switzerland trade balance
09:00 CET Switzerland KOF economic barometer
09:30 GMT UK mortgage approvals
08:55 EST US Redbook index
09:00 EST US house price index
10:00 EST US consumer confidence
10:00 EST US job openings and labour turnover survey
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The UK will finally roll out post-Brexit border checks Wednesday on food, plant and animal products imported from the EU, fanning fears of more price hikes, empty shelves and even Valentine's Day flower shortages. The long-awaited move will affect dinner-table staples from across the Channel, such as ham, sausages and cured meat, as well as butter, cheese and cream. It will also affect cut flowers. The changes have been delayed five times because of fears about the knock-on effect on the sluggish UK economy and inflation, which remains elevated amid a broader cost-of-living crisis. From Wednesday, companies must present certificates for sanitary and phytosanitary imports at the UK border. Some goods from Northern Ireland will also face full customs controls.
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BROKER RATING CHANGES
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Peel Hunt cuts Antofagasta to 'reduce' (hold) - price target 1,360 (1,350) pence
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Morgan Stanley cuts IAG to 'underweight' (equal-weight)
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Berenberg cuts Future to 'hold' ('buy') - target 850 (1,780) pence
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COMPANIES - FTSE 100
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Diageo said that sales in the six months ended December 31 fell to USD15.18 billion from USD15.61 billion a year earlier. This was driven by a decline in organic net sales in Latin America & Caribbean, where they contracted by 23% year-on-year, or by USD310 million. Pretax profit fell to USD3.08 billlion from USD3.61 billion. On the back of the results, the London-based brewer and distiller upped its dividend to 40.50 US cents from 38.57 cents. Looking ahead, the company known for Guinness and Baileys expects organic net sales growth rate in the second half to "gradually improve" compared to the growth rate in the first half. "In Europe, Asia Pacific and Africa, we expect continued growth in the second half recognising that macroeconomic volatility and consumer uncertainty will likely persist," it added.
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COMPANIES - FTSE 250
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SThree reported that revenue in the year ended November 30 rose to GBP1.66 billion from GBP1.64 billion a year earlier. The London-based staffing company's pretax profit increased to GBP77.9 million from GBP77.0 million. On the back of the results, SThree proposed a final dividend of 11.6 pence per share, up from 11p, bring the total dividend to 16.6p, up from 16p. Chief Executive Timo Lehne said: "We have been consciously investing in and positioning the business for future growth and, whilst we continue to operate in a challenging macro environment, this does not change our focus. We have a resilient business, a talented team and are building a market-leading technology suite. We are confident that our investments and innovations put the group in a position of strength to capture market share as and when the market returns to growth."
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Auction Technology said it has started its financial year in line with expectations, with total revenue up 11% annually to USD43.9 million in the three months ended December 31. The London-based online auction operator said that growth has been "driven by the continued strong growth in value-added services offsetting the wider market dynamics in gross merchandise value." Looking ahead, Auction Technology said trade in the first quarter is consistent with full-year outlook, reflecting an expected improvement in performance over the year. The company expects full year organic revenue growth of 5% to 8% and adjusted Ebitda margins to be maintained.
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Hill & Smith named Hooman Caman Javvi as its chief operating officer. Javvi will retain his current responsibilities, while taking on a wider responsibility for the Group's operations, talent development and medium-term strategy. He joined Hill & Smith in March 2022, having previously spent 11 years in senior management roles at ABB and Hitachi Energy. "Having worked closely with Hooman over the last 18 months, I have seen first-hand the positive impact he has had on the business as a result of his strong operational and strategic management expertise. Taking on the Chief Operating Officer role is a natural next step, and one where I believe he can make a significant impact as we deliver on our ambitious growth strategy," said Executive Chair Alan Giddins.
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OTHER COMPANIES
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Germany's Delivery Hero late Tuesday said it sold its entire 4.5% stake in UK food delivery peer Deliveroo PLC, raising GBP76.8 million. The Berlin-based delivery platform said about 68 million Deliveroo shares were placed with institutional investors at GBP1.13 per share. Deliveroo shares closed at 121.90 pence on Monday in London. It has a GBP1.86 billion market capitalisation. The accelerated bookbuild was run Barclays Bank Ireland, Goldman Sachs Bank Europe and Morgan Stanley Europe. Delivery Hero said it has no remaining Deliveroo shares, adding the disposal shows its "commitment to disciplined capital allocation".
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Riyadh has ordered Saudi Arabian Oil to maintain its oil production capacity at 12 million barrels per day, abandoning a planned 8.3% increase, the energy company said on Tuesday. "Aramco announces that it has received a directive from the Ministry of Energy to maintain its maximum sustainable capacity at 12 million barrels per day" instead of ramping it up to 13 million barrels, it said in a statement. Aramco said it will update its capital spending guidance when it releases its 2023 financial results in March. Aramco shares ended trading in Riyadh on Tuesday unchanged at SAR31.25. It has a market capitalisation of SAR7.56 trillion, about USD2.02 trillion.
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By Sophie Rose, Alliance News senior reporter
Comments and questions to newsroom@alliancenews.com
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Diageo (DGE)
SThree (STEM)
Auction Technology Group (ATG)
Hill & Smith (HILS)
Deliveroo (ROO)
