(Alliance News) - London's FTSE 100 is called to open solidly higher on Monday, recovering some poise after a tricky week, with eyes turning to the Bank of England.
The BoE decides on interest rates on Thursday, following the US Federal Reserve and Bank of Japan last week.
"We think the Monetary Policy Committee will vote 7-to-2 to keep bank rate on hold at 5.25%, the same vote split as in May. We also expect rate-setters to leave their guidance on the timing of the first rate cut little changed. The MPC will likely judge that inflation persistence remains a problem after GDP growth, wages and inflation exceeded its forecasts," analysts at Pantheon Macroeconomics predicted.
Elsewhere, focus will also be on political campaigning in both the UK and France. President Emmanuel Macron's call for a snap legislative poll in France hit sentiment last week, with the CAC 40 in Paris losing over 6%. The blue-chip benchmark in Paris is called up 0.6% on Monday.
In early UK corporate news, AstraZeneca reported a US drug approval, while events firm Ascential said it is trading in line with expectations, ahead of its key Cannes Lions event.
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 8,183.26
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Hang Seng: flat at 17,947.44
Nikkei 225: closed down 1.8% at 38,102.44
S&P/ASX 200: closed down 0.3% at 7,700.30
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DJIA: closed down 57.94 points, 0.2%, at 38,589.16
S&P 500: closed down slightly at 5,431.60
Nasdaq Composite: closed up 0.1% at 17,688.88
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EUR: down slightly at USD1.0695 (USD1.0698)
GBP: lower at USD1.2668 (USD1.2683)
USD: higher at JPY157.42 (JPY157.36)
GOLD: lower at USD2,317.78 per ounce (USD2,327.27)
OIL (Brent): lower at USD82.20 a barrel (USD82.51)
(changes since previous London equities close)
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ECONOMICS
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Monday's key economic events still to come:
10:00 BST eurozone labour cost index
11:00 BST Ireland trade balance
08:30 BST US New York empire state manufacturing index
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UK Shadow Chancellor Rachel Reeves has said she will seek closer trade ties with the EU and more foreign investment as she kicks off an economy-focused week, while Prime Minister Rishi Sunak is returning to the campaign trail after a few days' hiatus. Labour's shadow chancellor has suggested she could revise parts of Boris Johnson's 2020 Brexit deal, including seeking closer alignment with EU rules in the chemicals and veterinary sectors, better touring rights for UK artists, and greater mutual recognition of qualifications for financial services workers. She said this was not an "exclusive" list, telling the Financial Times: "We would look to improve our trading relationship with Europe. "I don't think anyone voted leave because they were not happy that chemicals regulations were the same across Europe."
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UK house prices tread water on-month in June, following a "familiar seasonal pattern", but registered annual growth, numbers from Rightmove showed. The property portal said the average UK house asking price was largely flat on-month at GBP375,110 in June, compared to May's record high of GBP375,131. On-year, house prices grew 0.6% in June, the same pace of growth in May. Rightmove noted lofty mortgage rates are hurting affordability. The average five-year fixed mortgage rate is now at 5.04%, compared with 4.94% in January, it noted. Would-be movers have the Bank of England's interest rate outlook, as well as the upcoming general election and any housing market promises to be mindful of. The BoE's next decision is on Thursday. The election is on July 4.
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The number of job adverts has settled at about 1.7 million amid steady demand for workers, according to recruiters in the UK. The Recruitment & Employment Confederation said the figure had remained roughly the same for months. Chief Executive Neil Carberry said: "The number of active job adverts remains above 1.7 million which shows steady demand for workers despite slow progress in the wider economy. "Employers are intent on hiring and investing in their own business but are acting more cautiously because of economic and political uncertainty. We expect this to change as inflation stays low and interest rates drop over the summer." Occupations with notable increases in adverts last month included stonemasons, building and civil engineering technicians and forestry workers. There were falls in adverts for nannies and au pairs, probation officers and data entry administrators, the report added.
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Manufacturers are seeing signs of growth amid a better outlook for the economy, according to new UK research. Make UK said a survey of 320 companies found that output and orders were increasing, with the sector forecast to outpace the economy this year. Business confidence has risen to equal its highest level in the last decade, as companies look to emerge from a two-year "slump", said the report. The survey showed that manufacturers want the next government to make delivering an industrial strategy its top priority. James Brougham, senior economist at Make UK, said: "At long last, manufacturers can see concrete signs of growth and a much better economic outlook ahead."
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BROKER RATING CHANGES
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Goldman cuts SSP Group to 'sell' (neutral) - price target 160 (225) - pence
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COMPANIES - FTSE 100
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Drugmaker AstraZeneca landed a US approval for cancer treatment Imfinzi, hailing an "important new option" for patients. An Imfinzi plus chemotherapy treatment has been backed by the US Food & Drug Administration for sufferers of some forms of endometrial cancer, a type of womb cancer. Dave Fredrickson, executive vice president of AstraZeneca's oncology offering, said: "There have been limited advances in the treatment of endometrial cancer in the last few decades, and continued innovation is critical as the burden of this cancer is expected to grow in the future. Immunotherapy in combination with chemotherapy is emerging as a new standard of care in this setting, and the approval of Imfinzi offers an important new option for patients with mismatch repair deficient disease." AstraZeneca on Sunday had reported results from the Echo phase III trial. It showed that its Calquence drug, when used in combination with bendamustine and rituximab, demonstrated a clinically meaningful improvement in progression-free survival in patients with untreated mantle cell lymphoma.
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Pharmaceutical company Hikma Pharmaceuticals said it has struck a deal to acquire a portfolio of products, bolstering its Injectables business. Hikma has agreed with Copenhagen-based critical care therapies provider Xellia Pharmaceuticals to acquire parts of its US finished dosage form business and assets. These include a commercial portfolio and pipeline of products, a manufacturing facility in Cleveland, Ohio and a research & development centre in Zagreb, Croatia. Hikma will fork out USD135 million in cash, as well as an additional contingent consideration of up to USD50 million, should some regulatory and commercial milestones be met. The deal "diversifies and enriches" Hikma's injectables portfolio and pipeline, it said. Bill Larkins, the president of Hikma Injectables, said: "This acquisition strengthens our Injectables business, and I am particularly excited by the potential to further develop our pipeline with the talented and experienced team at the Zagreb R&D facility. The combination of Xellia's assets with our quality manufacturing expertise and strong commercial capabilities puts us in an even stronger position to serve the growing needs of hospitals and patients. The transaction is subject to US Federal Trade Commission approval. Hikma's 2024 guidance remains unchanged."
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DIY retailer Kingfisher said it has named property investor British Land's finance chief Bhavesh Mistry as its new chief financial officer, replacing Bernard Bot who will retire. Bot's exact leaving date is yet to be confirmed. It will be "no earlier than January 2025". "He will support the transition before his retirement. An exact start date for Bhavesh will be announced in due course," Kingfisher said. Mistry was formerly deputy CFO of Tesco from 2018 to 2021. Mistry has also held senior finance roles at brewer Anheuser-Busch InBev and hotel company Whitbread. Mistry has been CFO of British Land since 2021. British Land said: "A search for a new CFO is underway and a further announcement will be made in due course."
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COMPANIES - FTSE 250
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Ascential, ahead of a capital markets event in Cannes, said it is trading in line with expectations as it approaches the end of the first half of 2024. "In the first half of the year, the Marketing division is expected to deliver revenue growth in excess of 10% led by strong, double-digit growth from Cannes Lions delegates and sponsorship, driven by a combination of strong delegate volume growth, new pass launches and successful expansion of the physical footprint of the festival," the events, subscription business and advisory services-focused company said. It expects its Financial Technology to deliver "double digit revenue growth" in the first half. The firm, which organises the Cannes Lions event, noted "26,753 awards submissions" for the 2024 edition of the festival. The event in France kicks off on Monday.
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OTHER COMPANIES
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Cruise port operator Global Ports Holding said it is considering a takeover proposal from its majority owner Global Investments Holding. GPH said it received an "indicative non-binding proposal", which it will "consider" with its advisers. GIH, which owns around 59% of GPH, on Friday said it is mulling a cash offer of USD3.00 per share, giving the London listing an equity valuation of USD229.3 million, around GBP181.0 million. GPH has a market capitalisation of around GBP185.5 million. GIH said on Friday: "GIH as the controlling shareholder is convinced of the merits of moving the business into private ownership and intends to seek delisting of the company and taking it private." GIH has until the close of play on July 12 to announce whether it plans to make a firm offer for GPH.
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By Eric Cunha, Alliance News news editor
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