(Alliance News) - Stocks in London are called to open higher on Thursday, ahead of a key inflation reading from the US.
Thursday's data is expected to show the US annual inflation rate cooled to 3.1% in June, from 3.3% in May. A hotter-than-expected reading could support the argument for higher interest rates for longer, while an in-line or cooler one could solidify expectations for a rate cut in September.
In early economic news, the UK economy returned to growth in May.
Further, Ofwat announced that water bills are expected to rise by GBP19 a year in England and Wales under draft proposals.
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 0.2% at 8,207.10
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Hang Seng: up 1.9% at 17,802.18
Nikkei 225: closed up 0.9% at 42,224.02
S&P/ASX 200: closed up 0.9% at 7,889.60
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DJIA: closed up 429.39 points, 1.1%, at 39,721.36
S&P 500: closed up 1.0% at 5,633.91
Nasdaq Composite: closed up 1.2% at 18,647.45
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EUR: higher at USD1.0836 (USD1.0827)
GBP: higher at USD1.2858 (USD1.2846)
USD: lower at JPY161.70 (JPY161.74)
GOLD: up at USD2,382.10 per ounce (USD2,379.50)
OIL (Brent): up at USD85.75 a barrel (USD85.40)
(changes since previous London equities close)
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ECONOMICS
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Thursday's key economic events still to come:
11:00 IST Ireland CPI
08:30 EDT US CPI
08:30 EDT US initial jobless claims
10:30 EDT US EIA natural gas stocks
14:00 EDT US monthly budget statement
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The UK economy returned to growth in May, according to data from the Office for National Statistics on Wednesday. UK gross domestic product rose by 0.4% in May from April, having been flat on-month a month earlier. This was hotter-than-expected, with FXStreet pencilling in a 0.2% increase. The ONS also said that industrial production rose by 0.2% on-month in May, in line with FXStreet consensus. In April from March, industrial production fell by 0.9%. On an annual basis, industrial production rose by 0.4% in May, having lost 0.7% in April. FXStreet were expected a 0.6% rise. Also on Thursday, ONS data showed that the UK trade deficit narrowed to GBP4.89 billion from GBP6.75 billion.
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UK water watchdog Ofwat said that average water bills in England and Wales are expected to rise by GBP94 over next five years. This means that prices will increase by around GBP19 a year. Ofwat Chief Executive Officer David Black said: "Customers want to see radical change in the way water companies care for the environment. Our draft decisions on company plans approve a tripling of investment to make sustained improvement to customer service and the environment at a fair price for customers."
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Germany's consumer price inflation was as expected in June, data published by the Federal Statistical Office showed on Thursday. The country's annual consumer price inflation stood at 2.2% in June, slowed from 2.4% in May. Monthly, Germany's CPI was at 0.1% in June, unchanged from May. Germany's annual harmonised CPI, which allows for EU-wide comparison, decelerated to 2.5% in June from 2.8% in May. The monthly harmonised CPI remained unchanged at 0.2% in June. All figures for June were as expected, the statistical office said.
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BROKER RATING CHANGES
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RBC cuts Anglo American to 'sector perform' (outperform) - price target 2,600 (3,100) pence
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Berenberg starts Idox with 'buy' - price target 81 pence
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COMPANIES - FTSE 100
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DCC updated shareholders on its "seasonally less significant first quarter of the year", which ended on June 30. Operating profit in the period was, as expected, modestly ahead of the prior year. Looking ahead, DCC said it expects financial 2025 to be a year of strong operating profit growth and continued development activity. In a separate announcement, DCC Energy said it has completed the sale of a majority stake in its liquid gas business in Hong Kong & Macau to CITADEL Pacific Ltd. The transaction values DCC's business at an initial enterprise value of USD150 million. DCC received USD105 million for the business. "The disposal brings further strategic and geographic focus to DCC Energy as we implement our Cleaner Energy in Your Power strategy," CEO Donal Murphy explained.
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LondonMetric said it has sold five properties, in separate transactions, for GBP26.7 million. The company said that this reflects a 6% profit over March 31 book values. "These sales represent our exit from further non-core and lower growth assets where we have completed on our business plans. Since the end of March, we have now sold almost GBP100 million and expect to exchange on further sales shortly," CEO Andrew Jones said. "As we continually upgrade our portfolio, the sales proceeds will be reinvested into higher quality assets, which offer superior rental growth potential."
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Frasers, the owner of House of Fraser, Sports Direct and Flannels retail chains, said it has recently increased its investment in Hugo Boss. It now holds 8.0% of Hugo Boss's total share capital and a 13.8% share of common stock via the sale of put options. Frasers said after taking into account the net premium it will receive, its maximum exposure in connection with its interest in Hugo Boss is around EUR490 million.
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COMPANIES - FTSE 250
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Pennon Group said that Steve Buck has stepped down as chief financial officer. Buck will be succeeded by Laura Flowerdew, as the board enacts its internal succession plan. Flowerdew is chief customer and digital officer of Pennon Group and previously CFO at Bristol Water. CEO Susan Davy said: "Having had the opportunity to work closely with Laura over the past few years, she is perfectly placed to take on the role. Laura has a strong understanding of our business and brings with her significant leadership experience." Pennon noted the Ofwat announcement. It said: "We welcome Ofwat's recognition of the quality of both business plans in the group, underpinned by significant customer and stakeholder support."
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OTHER COMPANIES
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Global Ports Holding recommended its takeover by Global Yatirim. Global Ports Holding said shareholders will receive USD4.02 per share if they approve the takeover, this values the company at around USD310 million. The company said the offer is "fair and reasonable" and are therefore recommended that shareholders vote for it. GPH separately reported that in the financial year ended March 31, it swung to a pretax profit of USD14.3 million from a loss of USD9.5 million a year prior. Passenger figures jumped 46% to 13.4 million from 9.2 million. For the 2025 reporting period, it expects over 16 million passengers.
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Jet2 reported that revenue in the year ended March 31 jumped 24% to GBP6.26 billion from GBP5.03 billion a year earlier. Pretax profit rose to GBP529.5 million from GBP371.0 million. On the back of the results, Jet2 announced a final dividend of 10.7p per share, up 34% from 8.0p a year ago. This brings the total dividend to 14.7p, up from 11p. Non-Executive Chair Robin Terrell said: "I am extremely pleased with how our Leisure Travel business has performed in the two years since the pandemic. Not only have we capitalised on the growth opportunities presented, with the business having nearly doubled its pre-Covid revenue, we have also remained true to our values of carefully investing to secure our long-term growth aspirations, whilst ensuring we maintain financial stability and flexibility."
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By Sophie Rose, Alliance News senior reporter
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