(Alliance News) - London's FTSE 100 index is called marginally lower on Tuesday, as the market awaits the release of key US economic data.
In the meantime, investors will be digesting the latest UK labour data. According to the ONS, unemployment ticked up in March, though wage growth proved stubbornly above the Bank of England's 2% inflation target.
"Upside earnings risks do remain, particularly with April's minimum wage hike, and likely comparable earnings increases among other lower-wage earners, yet to feed into the data," commented Michael Brown, senior research strategist at Pepperstone.
"At the margin, today's wage data somewhat raises the risk of inflation persistence within the UK economy, which is a factor that the [Monetary Policy Committee]'s hawks are likely to point to as a reason to delay the first bank rate cut to the end of summer."
US producer price inflation data is out this afternoon, which will set the stage for Wednesday's US consumer price index.
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 2.3 points at 8,412.69
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Hang Seng: down slightly at 19,112.71
Nikkei 225: closed up 0.5% at 38,356.06
S&P/ASX 200: closed down 0.3% at 7,726.80
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DJIA: closed down 81.33 points, 0.2%, at 39,431.51
S&P 500: closed down slightly at 5,221.42
Nasdaq Composite: closed up 0.3% at 16,388.24
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EUR: down slightly at USD1.0788 (USD1.0791)
GBP: up at USD1.2559 (USD1.2552)
USD: up at JPY156.42 (JPY156.21)
Gold: up at USD2,344.35 per ounce (USD2,333.92)
Oil (Brent): up at USD83.48 a barrel (USD83.07)
(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 CEST eurozone ZEW economic sentiment survey
08:00 CEST Germany CPI
11:00 CEST Germany ZEW economic sentiment survey
08:30 BST UK BoE Chief Economist Huw Pill speaks
08:30 EDT US PPI
08:55 EDT US Redbook index
09:10 EDT US Federal Reserve Governor Lisa Cook speaks
10:00 EDT US Federal Reserve Chair Jerome Powell speaks
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The UK unemployment rate edged up slightly in the three months to March, official data showed, while wage growth came in hotter than expected. According to the Office for National Statistics, the nation's unemployment rate in three months to March ticked up to 4.3% from 4.2% in the three months to February. The reading landed in line with FXStreet-cited market consensus. The ONS said average earnings excluding bonuses rose 6.0% on-year in the period, matching the pace of growth in the three months to February. Including bonuses, wages increased 5.7%, also matching the prior month, which was revised upwards from 5.6%. Market consensus had been anticipating a rise of just 5.3%.
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UK Cabinet ministers are visiting Saudi Arabia in a bid to bolster trade links with the kingdom, amid reports that Riyadh authorised the use of lethal force to clear land for a new desert city. Deputy Prime Minister Oliver Dowden, Business Secretary Kemi Badenoch and Culture Secretary Lucy Frazer will be in the Gulf state for a two-day summit aimed at promoting economic ties. Dowden will lead a 450-strong delegation of British businesses including HSBC and British Airways at the event. Downing Street defended the visit on Monday after the BBC reported claims last week that Saudi forces had been permitted to use deadly force to clear land for a GBP400 billion desert city being built by dozens of western companies.
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BROKER RATING CHANGES
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Barclays raises IMI price target to 2,160 (1,960) pence - 'overweight'
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Berenberg raises Diploma price target to 4,700 (4,400) pence - 'buy'
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COMPANIES - FTSE 100
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Vodafone reported its annual results for the year ended March 31. The telecommunications company said revenue edged down 2.5% year-on-year to EUR36.72 billion from EUR37.67 billion. Pretax profit plunged to EUR3.67 billion from EUR14.45 billion, primarily reflecting gains on disposals seen in the prior year, in particular the EUR8.6 billion from the sale of Vantage Towers. Vodafone kept its dividend unchanged at 9.0 euro cents in total for the year, with a final dividend of 4.5 cents. "Much more still needs to be done in the year ahead. We will step-up investment in our customer experience, improve our underlying performance in Germany and accelerate our momentum in Business, whilst also continuing to simplify our operations throughout the group. We are fundamentally transforming Vodafone for growth," said Chief Executive Margherita Della Valle. Looking ahead to financial 2025, Vodafone guided for adjusted Ebitdaal of around EUR11 billion - around the same level as financial 2024 - and adjusted free cash flow of at least EUR2.4 billion - which would be down from EUR2.60 in financial 2024.
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COMPANIES - FTSE 250
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Bakery chain Greggs said its expectations for its full year remain unchanged after seeing good progress in 2024. In the first 19 weeks of the year, Greggs said like-for-like sales in company-managed shops were up 7.4% on the prior year, seeing growth across all channels. Sales totalled GBP693 million, up from GBP609 million a year before. Greggs opened 64 gross new shops, or 27 net openings, bringing its total number of shops trading to 2,500. It remains confident in 140 to 160 net shop openings for the full year. Cost inflation is still expected to be around 4% to 5% on a like-for-like basis over the full year. "We have made a good start to the year with continued like-for-like growth in a challenging market, reflecting the strength of our strategic plan," Greggs said.
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OTHER COMPANIES
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Shares in Walgreens Boots Alliance rose sharply after Bloomberg reported it was reaching out to potential buyers for its UK pharmacy chain, Boots. The Deerfield, Illinois-based company is working with advisers to hold early-stage discussions with would-be bidders, Bloomberg said, citing people familiar with the matter. No formal sale process has begun, the report added. Boots could be valued at about GBP7 billion in an exit, with one possibility being an initial public offering in London. No formal sale process has begun, the report added. A Walgreens representative declined to comment to Bloomberg. A Boots stock offering would be a big boost to the London stock market, which has been hit by a steady flow of companies opting to list elsewhere.
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By Elizabeth Winter, Alliance News senior correspondent
Comments and questions to newsroom@alliancenews.com
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