(Alliance News) - Stocks in London are called to open higher on Tuesday, after data showed that UK shop prices have entered deflation for the first time since 2021.
In contrast, Prime Minister Keir Starmer is set to give a speech in Downing Street on Tuesday, where he is expected to say that "things will get worse before they get better".
In early corporate news, Bunzl saw interim earnings before tax fall, but raised expectations for full-year adjusted operating profit.
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 0.6% at 8,367.20
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Hang Seng: up 0.3% at 17,843.81
Nikkei 225: closed up 0.5% at 38,288.62
S&P/ASX 200: closed up 0.2% at 8,071.20
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DJIA: closed up 65.44 points, 0.2%, at 41,240.52
S&P 500: closed down 0.3% at 5,616.84
Nasdaq Composite: closed down 0.9% at 17,725.77
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EUR: down at USD1.1167 (USD1.1193)
GBP: down at USD1.3199 (USD1.3220)
USD: down at JPY144.74 (JPY144.80)
Gold: up at USD2,516.20 per ounce (USD2,515.73)
(Brent): up at USD81.43 a barrel (USD78.88)
(changes since previous London equities close)
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ECONOMICS
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Tuesday's key economic events still to come:
16:00 CEST Germany Deutsche Bundesbank President Joachim Nagel speaks
08:55 EDT US Redbook index
09:00 EDT US S&P/Case-Shiller home price index
10:00 EDT US consumer confidence
10:00 EDT US Richmond Fed manufacturing index
10:30 EDT US Dallas Fed services index
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UK shop prices in August entered deflation for the first time since 2021, according to figures from the British Retail Consortium. The trade association said that during the first week of August, UK shop prices decreased 0.3% year-on-year, below the three-month average no change and compared with July's annual inflation of 0.2%. Non-food prices showed 1.5% deflation in August, compared with 0.9% deflation in July and leaving inflation "at its lowest rate since July 2021". Food prices remained in inflation, but this slowed to 2.0% from 2.3%. Inflation of fresh food prices eased to 1.0% in August from 1.4% in July, as supplier input costs decreased.
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Germany's economy shrank in the second quarter of 2024 from the first quarter, but it remained steady from a year before. The Federal Statistical Office said Germany's gross domestic product fell by 0.1% in the second quarter from the first quarter. The reading was unchanged from the estimate provided at the end of July and in line with the FXStreet-cited market consensus. GDP was unchanged from a year before, however. This represented an upward revision from a previously reported 0.1% annual decline, which also was the market expectation. The statistical office noted that in the second quarter of 2024, total exports of goods and services fell by 0.2% compared to the first quarter, while imports were steady.
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Iranian Foreign Minister Abbas Araghchi, and his Qatari counterpart Mohammed bin Abdulrahman Al Thani, have again called for a ceasefire to be implemented in the Gaza Strip. Iran welcomes Doha's efforts in mediating in the conflict, Araghchi said after receiving the Qatari minister in Tehran on Monday, state news agency ISNA reported. Negotiations on a ceasefire in Gaza, mediated by Qatar, Egypt and the US, have reportedly once again reached a stalemate after nearly 11 months of fighting between Israel and Palestinian group Hamas.
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French President Emmanuel Macron ruled out naming a government led by the left-wing New Popular Front alliance, citing a need for "institutional stability", his office said in a statement. The NFP emerged as the largest parliamentary block in snap elections in July, relegating the president's centrists to second place but failing to win an outright majority. Macron said a left-wing government would not win a confidence vote in parliament.
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UK Prime Minister Keir Starmer is set to compare his task as government leader to that of the communities that rallied round to clean up in the wake of the summer's riots, in a speech at Downing Street. The PM will promise that his Government will do the "hard work" to "root out 14 years of rot" under the Conservatives, PA reported. However, he is also expected to use his speech to warn that "frankly – things will get worse before we get better" as the Labour administration tries to deal with "not just an economic black hole but a societal black hole". Chancellor Rachel Reeves is expected to raise taxes in her budget on October 30 after accusing the Tories of leaving a GBP22 billion shortfall in the public finances.
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BROKER RATING CHANGES
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Deutsche Bank cuts AB Foods to 'sell' (hold) - price target 2,190 (2,290) pence
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Jefferies reinitiates Crest Nicholson with 'hold' - price target 230 pence
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Deutsche Bank raises Costain Group price target to 105 (80) pence - 'hold'
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COMPANIES - FTSE 100
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Bunzl reports pretax profit for the six months ended June 30 of GBP279.4 million, down from GBP317.1 million a year prior. Adjusted operating profit before income tax was GBP408.7 million, up from GBP395.6 million. Revenue came to GBP5.71 billion, down from GBP5.91 billion the year previously. However, the firm raised its interim dividend to 20.1 pence from 18.2p year-on-year. Looking ahead, Bunzl now expects adjusted operating profit in 2024 to show a "strong increase" in comparison with 2023, mainly driven "by an increase in...group operating margin". Bunzl also announced a 3-year capital allocation commitment of around GBP700 million per year. Further, the company said it starts a share buyback programme of up to GBP250 million today, to be completed by March 3 at latest.
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COMPANIES - FTSE 250
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Harbour Energy said that it now expects to complete the acquisition of the Wintershall Dea asset portfolio in early September, compared to a previous timeline of early in the fourth quarter. This follows "considerable progress" made on satisfying the conditions to completion, including the recent receipt of Mexico regulatory consents, the firm explained.
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OTHER COMPANIES
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Woodside posts pretax profit for the six months ended June 30 of USD2.31 billion, down from USD2.83 billion a year prior. Total profit came to USD1.97 billion, up from USD1.77 billion, while total comprehensive income fell to USD1.84 billion from USD2.32 billion. Operating revenue was USD5.99 billion, down 19% from USD7.40 billion. Announces interim dividend of 69 cents, at the top end of its pay-out range, but down 14% from 80 cents the year previously. During the period, says it delivered production of 89.3 million barrels of oil equivalent, and that full-year production guidance remains unchanged. Woodside also achieved first oil at the Sangomar Project in June, and has since achieved nameplate capacity with gross production rates of 100,000 barrels per day.
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By Holly Beveridge, Alliance News senior reporter
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