(Alliance News) - Stocks in London are called to open lower on Thursday, ahead of a busy day on the economic calendar, with a key interest rate decision from the Bank of England.
The BoE announces its interest rate decision at 1200 BST on Thursday. A press conference with Governor Andrew Bailey follows at 1230 GMT. Market consensus is predicting a 25 basis point hike to interest rates, according to FXStreet.
At the last meeting in June, the BoE raised UK interest rates by 50 basis points, taking the benchmark bank rate to 5.00% from 4.50% previously.
Aside from the BoE decision, Thursday's economic calendar has a slew of PMI readings, including the eurozone at 0900 BST, the UK at 0930 and the US at 1445.
In early corporate news, Rolls-Royce swung to a profit, whilst LSEG announced plans of a further buyback.
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 0.8 points at 7,560.83
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Hang Seng: down 0.4% at 19,594.99
Nikkei 225: closed down 1.7% at 32,159.28
S&P/ASX 200: closed down 0.6% at 7,311.80
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DJIA: closed down 348.16 points, or 1.0%, at 35,282.52
S&P 500: closed down 63.34 points, 1.4%, at 4,513.39
Nasdaq Composite: closed down 310.47 points, 2.2%, at 13,973.45
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EUR: down at USD1.0939 (USD1.0940)
GBP: down at USD1.2698 (USD1.2707)
USD: up at JPY143.55 (JPY143.32)
Gold: down at USD1,934.11 per ounce (USD1,934.77)
(Brent): down at USD83.03 a barrel (USD83.09)
(changes since previous London equities close)
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ECONOMICS
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Thursday's key economic events still to come:
08:15 EDT Canada official international reserves
09:30 CEST EU EuroCOIN indicator of euro area economic activity
10:00 CEST EU services PMI
11:00 CEST EU PPI
09:50 CEST France services PMI
08:00 CEST Germany foreign trade
09:55 CEST Germany services PMI
09:15 CEST Spain services PMI
08:30 CEST Switzerland CPI
09:30 BST UK services PMI
09:30 BST UK official reserves
12:00 BST UK interest rate decision
07:30 EDT US Challenger job-cut report
08:30 EDT US unemployment insurance weekly claims report
09:45 EDT US S&P Global services PMI
10:00 EDT US ISM services PMI
16:30 EDT US federal discount window borrowings
16:30 EDT US foreign central bank holdings
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Overall private sector activity in Ireland was unchanged last month, despite continued strong growth in the service sector, survey results from S&P Global showed on Thursday. The AIB services purchasing managers' index slipped to 56.7 points in July from 56.8 in June, remaining well above the neutral 50-point mark and indicating expansion. However, the composite PMI fell to 50.0 points in July from 51.4 in June, showing overall stagnation in the Irish private sector. S&P Global said the composite score indicated the weakest performance by Irish companies since November last year. "Underlying data showed that a substantial increase in new business received by service providers continued to offset a contraction in manufacturing new factory orders," S&P Global said. "At the same time, total employment levels rose modestly."
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BROKER RATING CHANGES
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Berenberg raises Hochschild Mining to 'buy' (hold) - price target 100 pence
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Peel Hunt reinitiates Restore with 'hold' - price target 169 pence
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Berenberg raises BAE Systems price target to 1,050 (1,000) pence - 'hold'
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COMPANIES - FTSE 100
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London Stock Exchange reported that pretax profit in the first half of 2023 fell to GBP662 million, down 18% from GBP803 million year-on-year. Total income fell 12% to GBP4.18 billion from GBP3.74 billion. However, it upped its dividend by 13% to 35.7p from 31.7p. It also said it expects up to GBP750 million in share buybacks by April 2024. "Data & Analytics is growing faster than it has for many years, with the ongoing improvements to our offering and strengthened customer relationships increasingly reflected in financial performance. Post Trade once again demonstrated the critical role it plays in helping customers manage risk in uncertain markets, delivering outstanding growth," said Chief Executive David Schwimmer.
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Smith & Nephew said that revenue in the six months ended July 1 rose 5.2% to USD2.73 billion from USD2.60 billion a year ago. The London-based medical equipment maker said pretax profit in the half-year rose to USD211 million from USD204 million. Smith & Nephew declares interim dividend of 14.4 US cents, in line with prior year. Looking ahead, Smith & Nephew upped its full-year revenue guidance. It now expects underlying revenue growth of 6.0% to 7.0%, up from 5.0% to 6.0% previously. However, it left its trading profit margin guidance unchanged, expected to be at least 17.5%. In a separate announcement, Smith & Nephew said that its Chief Financial Officer Anne-Francoise Nesmes will step down during the second quarter of 2024, on a date to be agreed. The board has begun an external search for a new CFO.
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Rolls-Royce reported that revenue in the first half of 2023 rose to GBP7.52 billion from GBP5.60 billion a year earlier. The London-based jet engine and power plant manufacturer swung to a pretax profit of GBP1.42 billion from a loss of GBP1.75 billion. Rolls-Royce said that profitability was led by civil aerospace. Looking ahead, Rolls-Royce upped its full-year guidance. It now expects underlying operating profit of GBP1.2 billion to GBP1.4 billion in 2023, up from guidance of GBP800 million to GBP1.0 billion previously. CEO Tufan Erginbilgic said: "Our multi-year transformation programme has started well with progress already evident in our strong initial results and increased full-year guidance for 2023. There is much more to do to deliver better performance and to transform Rolls-Royce into a high-performing, competitive, resilient, and growing business."
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COMPANIES - FTSE 250
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Wizz Air said that in the three months ended June 20 revenue rose to EUR1.24 billion, up 53% from EUR808.8 million a year earlier. The low budget airline swung to a pretax profit of GBP67.1 million from a loss of GBP451.1 million a year earlier. The number of passengers rose by 25% to 15.3 million from 12.2 million. Looking ahead, Wizz Air said it maintains its full-year guidance. CEO Jozsef Varadi said: "Summer is going well operationally and from a revenue perspective. We have made significant progress against our main objectives of reinstating best in class profitability at the back of delivering high-capacity growth and improving operational metrics during the quarter."
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Pennon, an Exeter, England-based water utility company, said that its Chief Financial Officer Paul Boote at the end of the calendar year. In his place, Steve Buck will be appointed to the board in November and will take up his role as CFO for Pennon and its subsidiaries at the end of December. Buck is currently CFO of Anglian Water. CEO Susan Davy said: "I would like to thank Paul for his contribution to Pennon over the past 13 years, most recently stepping up as a member of the Board and to the role of chief financial officer."
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OTHER COMPANIES
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Team17 said that its enlarged portfolio of titles across all ages, genres and platforms has "performed well in a challenging marketplace." The video game development company and publisher of educational entertainment apps continues to expect to trade in line with full year market expectations. CEO Debbie Bestwick says: "From the joys of Dredge, the success of Police and Construction simulators to Lego, Ego, Duplo, Disney Mickey & Friends and Barbie Color Creations, we have enjoyed and celebrated each milestone but as gamers, creators and talented industry veterans, we remain ever cautious and will continue to focus on the delivery of our plans in H2."
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By Sophie Rose, Alliance News reporter
Comments and questions to newsroom@alliancenews.com
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Team17 (TM17)
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Restore (RST)
Hochschild (HOC)