(Alliance News) - Stocks in London are called to open higher on Friday, after news that the Bank of Japan is leaving interest rates unchanged.
The Bank of Japan on Friday said it would trim its vast hoard of government bonds as it cautiously steps away from its long-running ultra-loose monetary policy.
The central bank kept interest rates unchanged after a two-day meeting but announced plans to "reduce its purchase amount of JGBs (Japanese Government Bonds) thereafter to ensure that long-term interest rates would be formed more freely".
In early corporate news, supermarket Tesco reported higher sales in the first quarter of its financial year. Meanwhile, Bellway's bid to take over Crest Nicholson has been rejected.
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 0.5% at 8,203.70
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Hang Seng:down 0.7% at 17,995.23
Nikkei 225: closed up 0.2% at 38,814.56
S&P/ASX 200: closed down 0.3% at 7,724.30
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DJIA: closed down 65.11 points, 0.2%, at 38,647.10.
S&P 500: closed up 0.2% at 5,433.74
Nasdaq Composite: closed up 0.3% at 17,667.56
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EUR: down at USD1.0730 (USD1.0763)
GBP: down at USD1.2744 (USD1.2764)
USD: up at JPY158.16 (JPY156.88)
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GOLD: up at USD2,310.20 per ounce (USD2,307.79)
OIL (Brent): down at USD82.34 a barrel (USD82.53)
(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 eurozone trade balance
08:30 EDT US import and export prices
10:00 EDT US Michigan consumer sentiment index
19:00 EDT US Federal Reserve Governor Lisa Cook speaks
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UK Prime Minister Rishi Sunak will tell world leaders they must unlock funding for sustainable development and harness the benefits of AI on the second day of the G7 summit in Italy. He will announce funding which could top GBP100 million to help deliver clean energy transitions with a GBP20 million expansion of an artificial intelligence development scheme into Asia. Sunak will tell a session focused on artificial intelligence and energy, Africa and the Mediterranean on Friday that the international financial system needs reforming to unlock finance required to accelerate sustainable development goals and strengthen the voices of the most vulnerable.
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BROKER RATING CHANGES
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BofA raises Legal & General to 'buy' (neutral) - price target 268 (275) pence
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Berenberg reinitiates AB Dynamics with 'buy' - price target 2,620 pence
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COMPANIES - FTSE 100
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Tesco reported that retail sales in the 13 weeks ended May 25 rose 3.4% on a like-for-like basis to GBP15.31 billion. The grocer noted that food sales were up 5.0%, whilst non-food sales edged up 0.7%. Chief Executive Ken Murphy said: "We've continued to build momentum in the business, with strong volume growth across the UK, Republic of Ireland and Central Europe supported by easing inflation. We continue to be the cheapest full-line grocer and are the most competitive we've ever been, with our value, product quality and service driving better brand perception and customer satisfaction. Our market share reflects this, growing more than at any other time in the past two years, with customers switching to us from other retailers, shopping with us more often and with more in their baskets." On the back of the quarter, Tesco reiterated its full year guidance.
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The UK Competition & Markets Authority said it will investigate the planned GBP2.52 billion takeover of Redrow by Barratt. The CMA said the investigation will assess whether the creation of that merger may be expected to result in a substantial lessening of competition within any market. "To assist it with this assessment, the CMA invites comments on the transaction from any interested party," the watchdog said, with invitation to comment closing on June 28. The CMA has a deadline of August 8 for its phase 1 decision. It had opened a preliminary investigation in March, after the all-share takeover was announced a month earlier. Housebuilders have already attracted the attention of the CMA. In February, the regulator said it found "fundamental concerns" within the UK housebuilding market, and launched an investigation into eight housebuilders, including Redrow and Barratt. Publishing its final report on the housebuilding market which followed a year-long study, the CMA found that "the complex and unpredictable planning system, together with the limitations of speculative private development, is responsible for the persistent under delivery of new homes".
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COMPANIES - FTSE 250
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Crest Nicholson confirmed that it has received all-share takeover approach from Bellway. On Thursday, Bellway made a new takeover proposal for Crest, but said it had been rejected. Bellway said under the terms of the bid, Crest Nicholson investors would have stood to receive 0.093 of a Bellway share for each Crest Nicholson share. It valued Crest Nicholson shares at 253.00 pence each, the company's equity overall at around GBP650.0 million. On Friday, Crest confirmed that it has rejected the offer, as it undervalues the company. "Crest Nicholson remains confident in its standalone prospects, in particular given conclusion of the review of provisions for completed development sites supported by external consultants, its highly attractive land portfolio and the new leadership of Martyn Clark," Crest said.
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OTHER COMPANIES
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Zephyr Energy provided an update on operations on the State 36-2R LNW-CC well at its flagship project in the Paradox Basin, Utah. It said completion operations on the well have now concluded safely and successfully and the Helmerich & Payne drilling rig is being rigged down and transported off location. Production testing equipment will then be mobilised to site. Testing is expected to commence within two weeks and is expected to take less than ten days to complete. "I am delighted that drilling operations have completed safely and successfully. We can now look forward to commencing the highly anticipated production test over the course of the next fortnight," said Chief Executive Colin Harrington.
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By Sophie Rose, Alliance News senior reporter
Comments and questions to newsroom@alliancenews.com
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