LONDON BRIEFING: Games Workshop trades better than expected

(Alliance News) - Stocks in London are set to extend Thursday's gains at Friday's market open, with sentiment lifted further by the latest economic data from China.

Investors were pleasantly surprised by the better-than-expected developments in Asia's largest economy.

Retail sales jumped 4.6% on-year in August, the National Bureau of Statistics said. That marks a big improvement on July's 2.5% and was far better than the 3% forecast in a survey of economists by Bloomberg. Meanwhile, industrial production climbed 4.5% on-year, which was also a big increase from July and more than estimated.

"The flurry of activity has been triggered by higher manufacturing and mining activity, after support and stimulus from Beijing appear to be having the desired effect. A short, sharp economic recovery in China would help underpin confidence globally," considered Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown.

In early UK company news, Games Workshop said its financial year started on the front foot. Power Metal Resources said it spotted two significant gold finds at the Tati gold project.

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 52.92 points, 0.7%, at 7,726.00

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Hang Seng: up 1.0% at 18,221.35

Nikkei 225: closed up 1.1% at 33,533.09

S&P/ASX 200: closed up 1.3% at 7,279.00

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DJIA: closed up 331.58 points, or 1.0%, at 34,907.11

S&P 500: closed up 0.8% at 4,505.10

Nasdaq Composite: closed up 0.8% at 13,926.05

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EUR: down at USD1.0654 (USD1.0671)

GBP: up at USD1.2427 (USD1.2414)

USD: up at JPY147.41 (JPY147.11)

GOLD: up at USD1,916.03 per ounce (USD1,908.80)

OIL (Brent): up at USD94.31 a barrel (USD93.49)

(changes since previous London equities close)

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ECONOMICS

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Friday's key economic events still to come:

11:00 CEST EU labour cost index

11:00 CEST EU foreign trade

11:00 IST Ireland goods exports and imports

09:30 BST UK BoE and Ipsos inflation attitudes survey

09:30 BST UK BoE statistics on banks' external claims

08:30 EDT US import and export price indexes

09:15 EDT US industrial production

10:00 EDT US University of Michigan survey of consumers

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Thousands of airline passengers have been impacted by cancelled, delayed or diverted flights due to a lack of air traffic control staff at Gatwick airport. The airport confirmed a short notice staff absence in its ATC tower, managed by National Air Traffic Services, which meant 42 flights were cancelled or diverted while dozens more were heavily delayed on Thursday. More than 6,000 passengers are likely to have been affected by cancellations. Ryanair boss Michael O'Leary has called on Nats chief executive to resign, while easyJet said it is "very disappointed" its customers have been affected again.

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BROKER RATING CHANGES

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Goldman raises Great Portland to 'neutral' - price target 400 pence

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Goldman raises Derwent London to 'buy' - price target 2,090 pence

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Berenberg reinitiates Intertek with 'buy' - price target 4,900 pence

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COMPANIES - FTSE 250

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Games Workshop said its trading in the three months to August 27 - its first financial quarter - was ahead of its expectations. It said core revenue was around GBP121 million, rising year-on-year from GBP106 million. Core revenue refers to direct sales of its core products to external customers, via its retail network, independent retailers, or online. Licensing revenue doubled to around GBP6 million. While noting the performance was better than the previous year, the miniature wargames maker and retailer said "it is still early" in the financial year. It declared a dividend of 50 pence per share, bringing the total declared payout in the financial year to GBP1.95 per share, compared to GBP1.20 a year prior.

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Supermarket Income REIT updated on its debt reduction and refinancing activities. The supermarket real-estate investor said it has reduced its loan-to-value ratio to 34% from 40% at the end of 2022, with 60% of its debt facilities now unsecured compared to 48% previously. It has cancelled two shorter-dated debt facilities, reduced and extended an existing debt facility, and completed a new unsecured debt facility with a new lender. "The company continues to be able to access debt financing at attractive margins, however, given the current macroeconomic environment the board considers it prudent to maintain a lower LTV," says Ben Green, director at investment adviser Atrato Capital.

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OTHER COMPANIES

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Powerhouse Energy said it has been granted a patent in full by the European Patent Office. The patent will relates to protection around the control of the heating of the waste within the thermal conversion chamber over several zones, which allows optimum synthesis gas to be produced. "This will be the first patent to be granted to the company. It provides significant protection for the DMG technology that differentiates PHE from others in the waste-to-energy sector," said Chair Antony Gardner-Hillman.

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Power Metal Resources said its geochemical soil sampling confirmed "two significant gold anomalies" at its 100%-owned Tati gold project in Botswana. CEO Sean Wade said the sampling data and an eight-kilometre long gold trend at the project appear to show the "potential to host a very large gold deposit". The firm is seeking to advance the project "expeditiously", he said, while also managing inbound interest and the potential for near-term small scale mining.

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By Elizabeth Winter, Alliance News senior markets reporter

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