(Alliance News) - Stocks in London are set to open lower on Friday, as central bankers on both sides of the Atlantic pointed to further rate hikes and UK retail sales data disappointed.
UK retail sales declined by more than expected in March, according to data from the Office for National Statistics.
Retail sales volume is estimated to have fallen 0.9% in March from the month before, following a 1.1% rise in February. February's monthly rise was revised down from an increase of 1.2%, the ONS said.
Markets expected retail sales volume to fall 0.5% in March on a monthly basis, according to FXStreet-cited consensus.
A top Federal Reserve official on Thursday said US interest rates are likely to rise further and will need to remain high to effectively tackle inflation.
"Some additional tightening may be needed to ensure policy is restrictive enough" to support the US Federal Reserve 's dual mandate of keeping both unemployment and inflation low, Philadelphia Fed President Patrick Harker said in a speech in Pennsylvania, according to prepared remarks.
"Once we reach that point, which should happen this year, I expect that we will hold rates in place and let monetary policy do its work," he said.
Harker's call to continue tightening monetary policy echoed similar comments made in recent weeks by other FOMC members, including New York Fed President John Williams, and Fed Governor Christopher Waller.
On Wednesday, ECB Chief Economist Philip Lane said that "it will be appropriate to raise rates further" if the "baseline scenario" underlying the ECB's most recent forecasts in March holds.
Minutes from the ECB's most recent meeting, released on Thursday, also signalled there is still more monetary policy tightening on the way.
Still on the way Friday are a series of flash PMI readings for April.
In London, Network International received a takeover offer from Brookfield Asset Management that is better than that already offered by CVC Advisers and Francisco Partners Management. Energy services provider Sureserve accepted a takeover offer from Cap10 Partners.
Here is what you need to know at the London market open:
----------
MARKETS
----------
FTSE 100: called down 4.91 points, or 0.1%, at 7,897.70
----------
Hang Seng: down 1.3% at 20,140.39
Nikkei 225: closed down 0.3% at 28,564.37
S&P/ASX 200: closed down 0.4% at 7,330.40
----------
DJIA: closed down 110.46 points, 0.3%, at 33,786.55
S&P 500: closed down 0.6% at 4,129.81
Nasdaq Composite: closed down 0.8% at 12,059.56
----------
EUR: down at USD1.0948 (USD1.0971)
GBP: down at USD1.2413 (USD1.2449)
USD: down at JPY133.77 (JPY134.04)
Gold: down at USD1,983.13 per ounce (USD2,002.90)
(Brent): down at USD80.75 a barrel (USD81.29)
(changes since previous London equities close)
----------
ECONOMICS
----------
Friday's key economic events still to come:
10:00 CEST EU flash purchasing managers' index
11:00 IST Ireland wholesale price index
09:30 BST UK flash PMI
09:45 EDT US flash PMI
----------
UK retail sales declined by more than expected in March, according to data from the Office for National Statistics. Retail sales volume is estimated to have fallen 0.9% in March from the month before, following a 1.1% rise in February. February's monthly rise was revised down from an increase of 1.2%, the ONS said. Markets expected retail sales volume to fall 0.5% in March on a monthly basis, according to FXStreet-cited consensus. Against the same month a year prior, retail sales volume fell 3.1% in March, slowing from a fall of 3.5% in February. The annual print was in-line with market expectations. Sales remain 0.7% below its pre-Covid February 2020 level. Excluding fuel, retail sales volume fell 3.2% in March against the previous year and 1.0% against the previous month.
----------
New voting data suggests that support for the Scottish National Party at Holyrood has slumped to its lowest level since IndyRef following the resignation of Nicola Sturgeon and an investigation into party finances. The data from YouGov, which polled 1,032 Scottish adults on their voting intention at the next Holyrood election between April 17-20, found that the SNP's constituency vote share has dropped five points since March to 38%, the joint-lowest since the independence referendum in 2014. As recently as December the SNP was on 50% in constituency voting intention. The poll shows that Labour's constituency vote share of 30% is the highest it has achieved since the 2014 vote. The Conservative Party takes 16% of the vote and the Liberal Democrats 10%.
----------
BROKER RATING CHANGES
----------
Barclays raises Rentokil Initial price target to 660 (645) pence - 'overweight'
----------
Barclays reinitiates Elementis with 'equal-weight' - price target 141 pence
----------
Barclays cuts Just Eat Takeaway price target to 1,760 (2,170) pence - 'equal-weight'
----------
COMPANIES - FTSE 100
----------
Glencore said production in the first quarter of 2023 was "broadly" in-line with its expectations, accounting for portfolio changes and operational conditions, including the disposals and closures of some zinc and lead mines in the Americas during 2022. The miner reported own-sourced copper production of 244,100 tones, down 5% on the previous year due to planned lower grades and delays associated with adverse weather. Own-source zinc production totalled 205,300 tonnes, down 15% on the previous year, reflecting the disposal of the company's South American zinc operations and the closure of the Matagami mine. Glencore left its full-year production guidance unchanged.
----------
BHP reported a mixed production performance in the first nine months of its financial year as it navigated ongoing challenges and inflationary pressures. In an operational review, the Australian mining company kept its annual guidance mostly unchanged. For the nine months that ended March 31, copper production rose by 12% to 1.24 million tonnes from 1.11 million tonnes a year earlier. Iron ore output increased 1% to 191.7 million tonnes for the first nine months from 189.1 million tonnes previously. But metallurgical coal production dropped by 2% to 20.5 million tonnes from 28.2 million tonnes.
----------
COMPANIES - FTSE 250
----------
Network International confirmed it has received an 400 pence per share takeover offer for the company from Brookfield Asset Management. The Brookfield offer follows another potential offer for the payments provider from CVC Advisers and Francisco Partners Management at a price of 387 pence per share. Network said it is currently evaluating the Brookfield offer with its financial advisers and said a further statement will be made in due course. The stock closed at 395.00p on Thursday.
----------
International Public Partnerships said it has amended the terms of its corporate debt facility to support its investment pipeline. The investment company has agreed to increase the size of the facility to GBP350 million from GBP250 million. It will also retain a flexible accordion component which would, subject to lender approval, allow for a further increase in the size of the facility to GBP400 million. The maturity date of the facility has also been amended to June 2025 from March 2024. The key pricing terms remain unchanged, IPP said.
----------
OTHER COMPANIES
----------
Tyman said Juliette Lowes will be interim chief financial officer with immediate effect. This follows on from the announcement that Jason Ashton, who was CFO, is now acting as interim chief executive officer, following the decision of Jo Hallas to step down as CEO. The building products manufacturer said the process for the selection of a permanent chief executive is "progressing".
----------
Sureserve said it reached an agreement with Cap10 4NetZero Bidco, a company indirectly owned by Cap10 Partners, on an all-cash takeover for the energy services provider. Cap10 will pay 125 pence for each Sureserve share, a 39% premium to its closing price of 90p on Thursday. The company said this values it at around GBP214.1 million. The Sureserve board said it considers the terms of the acquisition to be "fair and reasonable". The board intends to unanimously recommend the acquisition at a general meeting, expected to be held in June. Chair Nick Winks said: "Under Bidco's private ownership, without the costs and regulation of a listed company, Sureserve should be able to pursue its strategy more productively and thereby sooner achieve leadership in helping our customers transition from traditional heating fuels to renewable alternatives."
----------
By Heather Rydings, Alliance News senior economics reporter
Comments and questions to newsroom@alliancenews.com
Copyright 2023 Alliance News Ltd. All Rights Reserved.
Rentokil Initial (RTO)
Elementis (ELM)
Just Eat Takeaw (JET)
Glencore (GLEN)
Network International (NETW)
International Public Partnerships (INPP)
Tyman (TYMN)
BHP Group (BHP)