(Alliance News) - Stock prices in London are seen opening higher on Thursday, reversing Wednesday's losses with attention now turning to the latest Bank of England interest rate decision at midday.
IG futures indicate the FTSE 100 index is to open 16.0 points higher, or 0.2%, at 7,090.06. The blue-chip index closed 15.95 points lower, or 0.2%, at 7,074.06 on Wednesday.
In early corporate news, distribution firm Bunzl left its full-year guidance unchanged after a promising first half and housebuilder Crest Nicholson raised its outlook. In the M&A space, St Modwen backed a final offer from Blackstone and Senior suitor Lone Star said it has decided against making an offer for the engineering firm.
The pound was quoted at USD1.3962 early on Thursday in London, soft on USD1.3965 at the equities close on Wednesday.
The euro stood at USD1.1923 early Thursday, down against USD1.1947 at the European equities close on Wednesday. Against the yen, the dollar was trading at JPY110.83, down against JPY110.85.
"Investors are waiting to see if the BoE will follow the Fed's projections and raise interest rates to combat rising inflation, or if it will remain unchanged. Investors should remember that inflation reached 2.1%, the highest rate recorded since the pandemic began," AvaTrade analyst Naaem Aslam commented.
The BoE will announce its latest monetary policy decision, alongside the release of the Monetary Policy Committee meeting minutes, at midday on Thursday.
Outside the BoE, the economic events calendar on Thursday has the Ifo's business climate index for Germany at 0900 BST and US GDP, jobless claims and quarterly personal consumption expenditure readings all at 1330 BST - the core PCE index print is the Fed's preferred gauge of inflation. Core PCE for May is due on Friday.
OANDA analyst Jeffrey Halley noted there were no big moves in New York equity markets overnight.
On Wednesday, the Dow Jones Industrial Average ended down 0.2%, the S&P 500 lost 0.1% and the Nasdaq Composite rose 0.1%.
"Asian markets remain equally calm today after New York's nil-all draw. A US bi-partisan group appears to have reached a preliminary agreement on the US infrastructure package and will be presented to the US President today. Its scope and how it will be paid for will interest financial markets the most, although it has caused no ripples in Asia," Halley added.
The Nikkei 225 in Tokyo ended flat on Thursday, the Shanghai Composite was marginally lower, and the S&P/ASX 200 shed 0.3%. The Hang Seng in Hong Kong was up 0.3%.
In London, Bunzl said it has seen "good overall growth" in its first half ending June 30. Revenue for the period is tipped to rise 1% year-on-year, and by around 6% to 7% at constant exchange rates.
"At constant exchange rates, underlying revenue growth is expected to reflect a strong recovery in the base business, including the foodservice and retail sectors, largely offset by the anticipated decline in larger Covid-19 related orders. Underlying revenue over the first half is expected to be approximately 6% higher than the comparable 2019 period," Bunzl added.
Bunzl left its annual revenue guidance unchanged, but it did lift its margin outlook.
"At constant exchange rates, underlying revenue is expected to be moderately higher in 2021 compared to 2019, demonstrating the resilience of the Bunzl business model. The group is increasing its adjusted operating margin expectations for the year to be slightly ahead of historical levels," the company said.
Housebuilder Crest Nicholson posted revenue growth of 35% to GBP324.5 million in the six months to April 30, from GBP240.0 million a year earlier. It swung to a pretax profit of GBP36.3 million from a GBP51.2 million loss.
It also noted an inventory impairment provision release of GBP7.6 million, swinging from a GBP43.2 million exceptional hit a year earlier, "reflecting confidence in market conditions".
Crest declared a 4.1 pence per share payout, having not released a first half dividend last year. The company also lifted its profit guidance.
For the year, adjusted pretax profit is now expected to be at least GBP100.0 million, so more than double the GBP45.9 million in financial 2020.
The London market has been rife with M&A action so far in 2021. Birmingham-based property investor St Modwen on Thursday backed a final and improved takeover bid from Blackstone.
Blackstone will pay 560p per St Modwen share, a 25% premium to the firm's closing price the day before the offer period began. It values the company at GBP1.27 billion. St Modwen shares closed at 551p on Wednesday, giving it a market capitalisation of GBP1.23 billion.
St Modwen's board backed the offer, and should shareholders do the same, the company will delist on August 9.
Conversely, Senior will not face an offer from Lone Star, after rebuffing the company for a fifth and final time earlier this week.
Lone Star on Thursday confirmed "that it does not intend to make an offer" for the engineering company.
Senior on Tuesday rejected a final sweetened buyout offer from US-based Lone Star, saying the deal made a day earlier "still fundamentally" undervalues the company.
With 419.4 million shares in issue, the fifth offer of 200p from the private equity firm valued Senior at GBP838.8 million. Senior shares closed at 150.10p on Wednesday, giving it a market value of GBP629.6 million.
Gold was quoted at USD1,777.16 an ounce early Thursday, down from USD1,788.30 late Wednesday. Brent oil was quoted at USD75.46 a barrel, down from USD75.65.
By Eric Cunha; ericcunha@alliancenews.com
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Senior (SNR)
Crest Nicholson (CRST)
Bunzl (BNZL)
