(Alliance News) - Stocks in London are called to open higher on Tuesday, with the mood in equity markets bolstered by strong trade in Asia.
Although it was a mixed close in New York overnight, both the S&P and Nasdaq achieved a record close.
"The S&P 500 printed this year's 54th record high on Monday, as record Black Friday sales came as another proof that Americans continue to spend," Swissquote analyst Ipek Ozkardeskaya commented.
But focus remains on "la crise" in France, the analyst added.
Ozkardeskaya said: "France has stepped into the crisis mode after a series of events - that included budget concessions to make Le Pen happy - ended with Le Pen not being happy. Consequently, Barnier used a constitutional tool to push his unpopular budget bill without a parliamentary vote and Le Pen said that she would take his government down by joining the leftists in a no-confidence motion. In summary, the things will probably get messier in France before they get better."
Nonetheless, the CAC 40 is called up 0.2%, though it ended flat on Monday, underperforming more bullish trade in Frankfurt. The DAX 40 is called up 0.1%.
In early UK corporate news, Greencore reported improved annual profit and announced a buyback. On the Beach also announced a buyback on the back of strong earnings. Informa said the combination of a division with a New York listing has taken effect.
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 8,327.49
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Hang Seng: up 0.9% at 19,730.89
Nikkei 225: up 1.9% at 39,248.86
S&P/ASX 200: up 0.6% at 8,495.20
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DJIA: closed down 128.65 points, 0.3%, at 44,782.00
S&P 500: closed up 0.2% at 6,047.15
Nasdaq Composite: closed up 1.9% at 19,403.95
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EUR: higher at USD1.0508 (USD1.0486)
GBP: higher at USD1.2668 (USD1.2643)
USD: higher at JPY149.93 (JPY149.24)
GOLD: higher at USD2,645.05 per ounce (USD2,642.00)
OIL (Brent): higher at USD72.12 a barrel (USD71.85)
(changes since previous London equities close)
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ECONOMICS
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Tuesday's key economic events still to come:
15:00 GMT US job openings and labour turnover survey
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The UK does not need to choose between its allies in America and Europe, Keir Starmer has said in a major speech. The PM said it was "plain wrong" to suggest he needed to steer his government away from either of the UK's most prominent allies. With the advent of Donald Trump's return to the White House, European leaders fear a divide over the future of support for Ukraine, as the incoming president has expressed a desire to end the conflict on "day one" of his time in office. But Starmer said the UK would "never turn away" from its partnership with the US, and also promised to build stronger bonds with Europe. Speaking at the Lord Mayor's Banquet in central London, Starmer said: "I want to be clear at the outset. Against the backdrop of these dangerous times. The idea that we must choose between our allies. That somehow we're with either America or Europe. Is plain wrong. I reject it utterly." He added: "(Clement) Attlee did not choose between allies. (Winston) Churchill did not choose. "The national interest demands that we work with both." The prime minister added: "That's why, when President Trump graciously hosted me for dinner in Trump Tower, I told him that we will invest more deeply than ever in this transatlantic bond with our American friends in the years to come." He also repeated his commitment to "rebuild our ties with Europe" and insisted he was right to try to build closer links with China.
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Ukraine must be placed in the "strongest possible position for negotiations" to end the war with Russia, UK Prime Minister Starmer has said. The prime minister insisted the UK will back Ukraine "for as long as it takes" as he made a speech in London, but for the first time acknowledged the conflict could move towards a negotiated end. Ukrainian President Volodymyr Zelensky has in recent weeks suggested he is open to a possible ceasefire with Vladimir Putin's Russia. Kyiv and its European allies meanwhile fear the advent of Trump's return to the White House could result in American aid being halted. President-elect Trump has said he would prefer to move towards a peace deal, and has claimed he could end the conflict on "day one" of his time in power. As he attempts to strike up a good relationship with the incoming president, Starmer revealed he had told Trump the UK "will invest more deeply than ever in this transatlantic bond with our American friends in the years to come". In his speech at London's Guildhall, the prime minister said there is "no question it is right we support Ukraine", as the UK's aid to Kyiv is "deeply in our self-interest". Allowing Russia to win the war would mean "other autocrats would believe they can follow Putin's example," he warned. Starmer added: "So we must continue to back Ukraine and do what it takes to support their self-defence for as long as it takes.
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UK retail sales were "dented" in part by low consumer confidence and higher energy bills, although the decline was "primarily down to the movement of Black Friday", figures on Tuesday showed. The British Retail Consortium, which published the data, noted that the later timing of Black Friday in 2024 meant that it did not fall into the November 2024 figures, resulting in artificially weaker annual results. Still, the BRC said total UK retail sales decreased by 3.3% on-year in November, against 2.6% growth in the same month of 2023. This was below the three-month average decline of 0.1% and the 12-month average growth of 0.5%. Food sales increased 2.4% year-on-year over the three months to November, against a growth of 7.6% in November 2023 and below the 12-month average growth of 3.7%. Non-food sales decreased 2.1% year-on-year over the three months to November, against a decline of 1.6% in November 2023 but above the 12-month average decline of 2.2%. For in-store non-food sales, the rate of decline was unchanged at 2.2% for the three months, while online sales fell 10% on-year in November against the prior year's average 2.1% decrease. This was below the three-month average decrease of 1.7% and below the 12-month average decline of 1.5%, the BRC said. "While it was undoubtedly a bad start to the festive season, the poor spending figures were primarily down to the movement of Black Friday into the December figures this year," commented BRC Chief Executive Helen Dickinson. "Even so, low consumer confidence and rising energy bills have clearly dented non-food spending. Spending on fashion was particularly weak as households delayed purchases of new winter clothing, while health spending was boosted by the season’s arrival of coughs and colds."
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A range of independent TDs are contemplating the prospect of entering Ireland's next coalition government as Fianna Fail and Fine Gael consider ways to secure a solid majority. Three long days of counting in the general election finished late on Monday night when the final two seats were declared in the constituency of Cavan-Monaghan. Fianna Fail was the clear winner of the election, securing 48 of the Dail parliament's 174 seats. Sinn Fein took 39 and Fine Gael 38. Labour and the Social Democrats both won 11 seats; People Before Profit-Solidarity took three; Aontu secured two; and the Green Party retained only one of its 12 seats. Independents and others accounted for 21 seats. The return of a Fianna Fail/Fine Gael-led coalition is now highly likely. However, their combined seat total of 86 leaves them just short of the 88 needed for a majority in the Dail. While the two centrist parties that have dominated Irish politics for a century could look to strike a deal with one of the Dail's smaller centre-left parties, such as the Social Democrats or Labour, a more straightforward route to a majority could be achieved by securing the support of several independent TDs.
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BROKER RATING CHANGES
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Citi raises Persimmon to 'buy' - price target 1,450 pence
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RBC raises Ceres Power to 'sector perform' (underperform) - price target 180 (160) pence
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COMPANIES - FTSE 100
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Informa said a tie-up of its digital businesses with US-listed TechTarget has taken effect. The FTSE 100 listing will 57% of Informa TechTarget, listed in New York. The London-based business information and events company had announced back in January that Informa Tech's digital business will merge with Newton, Massachusetts-based TechTarget to create "market leader". "Informa TechTarget combines more than 220 specialist technology media brands, authoritative industry insights, a permissioned first party audience of 50 million+ and a portfolio of powerful buyer intent and lead generation solutions for B2B technology companies," it explained on Tuesday. "Long-term growth in Enterprise Technology and the increasing use of B2B Digital Services underpin forward growth ambitions. Near-term market momentum remains subdued, with modest growth expectations going into 2025, when Informa TechTarget will focus on combination, business development and continuing improvement in its portfolio of data-led products." Mary McDowell will chair Informa TechTarget. She stepped down as Informa non-executive director at the end of last month.
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Anglo American concluded a deal to combine its Minas-Rio operation in Brazil with the Vale's "high quality iron ore resource" Serra da Serpentina. Under the deal's terms, Vale will pay USD157.5 million in cash and commodity price related adjustments for a 15% stake in the enlarged Minas-Rio. Vale also has an option to acquire an additional 15% shareholding in the enlarged Minas-Rio for cash, contingent on the asset achieving some expansion targets. Anglo American Chief Executive Duncan Wanblad said: "This is a compelling example of industrial logic - putting together the contiguous resources of Minas-Rio and Serpentina to unlock significant value. Integration will generate material synergies through utilisation of Minas-Rio's infrastructure to accelerate the development of Serpentina. It's an outstanding resource with a total orebody strike length more than double that of Minas-Rio with a higher iron ore grade than Minas-Rio's premium grade ore as well as softer, friable ore, which should translate into lower unit costs and capital required for its extraction. Integrating Serpentina creates scope to double our production of premium grade pellet feed products for decades to come and so help our steelmaking customers decarbonise their processes."
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COMPANIES - FTSE 250
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Greencore reported a "stronger than expected performance", reintroduced its dividend and announced a GBP10 million share buyback. The convenience food maker said pretax profit in the year to September 27 increased 36% to GBP61.5 million, from GBP45.2 million a year ago. This was despite revenue declining 5.6% to GBP1.81 billion from GBP1.91 billion. "The decline was driven by the disposal of Trilby Trading in September 2023, accounting for a decrease of 4.2%, and the proactive decision to exit a number of low returning contracts during FY23 accounting for a further 4.8% decline. This was partially offset by the impact of inflation recovery and price totalling 1.8% and a 1.6% benefit from volume increases," Greencore said. Greencore proposed a 2.0 pence per share dividend. It did not pay one in the prior year and has not paid one since financial 2019. "Given the group's strong balance sheet and confidence in the outlook the group is today announcing the launch of an additional GBP10 million share buyback," it added. For the new year, it expects adjusted operating profit within the top half of the range of current market expectations, which it puts at GBP98.1 million to GBP107.1 million. Adjusted operating profit in the year just gone rose 28% to GBP97.5 million from GBP76.3 million.
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SSP Group reported annual earnings growth and said trading in the early weeks of the new year has been "encouraging". The operator food outlets at travel locations reported pretax profit of GBP118.6 million in the year to September 30, an increase of 35% from GBP88.1 million. Revenue improved 14% to GBP3.43 billion from GBP3.01 billion. The Upper Crust owner hailed "good performances" in the North America, UK and the Asia Pacific & Eastern Europe & Middle East groupings. However, it suffered a "disappointing performance in Continental Europe". SSP trimmed its final dividend by 8.0% to 2.3p per share from 2.5p. It upped its total dividend to 3.5p from 2.5p, however. CEO Patrick Coveney said: "SSP has strong fundamentals and benefits from the global travel market's sustained long-term growth trends. This was clearly visible in the FY24 performance in three of our four regional markets. However, Continental Europe performed below our expectations, which in turn impacted Group EPS and free cash flow. As we reach the next phase of our evolution post-Covid and with strong underlying growth across the group, our focus now is on driving greater value from a strengthened base. In Continental Europe, we are accelerating our profit recovery plan, in particular by building returns from the significant number of recently renewed and extended contracts. Across the wider group, our priorities remain on sharpening our performance culture to drive profitable growth and returns, so as to unlock the full potential of SSP." So far in financial 2025, "trading has been encouraging". Revenue during the first eight weeks to November 25 is up 13% at constant currency.
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Wizz Air reported growth in passenger numbers last month, though a decline in capacity. The budget carrier said passenger numbers rose 1.7% on-year to 4.8 million in November. Capacity declined 1.7% to just under 5.3 million seats. On a rolling 12-month basis, capacity is up 6.1%, and passenger numbers up 5.1%. Fellow budget carrier Ryanair said traffic grew in November. Ryanair's passenger numbers shot up 11% on-year last month to 13.0 million. On a rolling 12-month basis, it is up 8% at 196.1 million.
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OTHER COMPANIES
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On the Beach hailed "another record breaking year" and announced a new share buyback. The travel company said pretax profit in the year to September 30 jumped 84% to GBP26.5 million from GBP14.4 million. Revenue rose 14% to GBP128.2 million from GBP112.1 million. Total transaction value amounted to GBP1.16 billion, up 15% from GBP1.01 billion, a record. The sum represents the total transaction value of sales booked each month before cancellations and amendments. The firm had reintroduced its dividend with a 0.9p per share interim payout. It topped this up with a 2.1p final dividend, to give a full-year total of 3.0p. It also announced a GBP25 million share buyback. "We approach our key booking period in Q2 with significant momentum. Our platform and proposition are stronger than ever and we are taking share in adjacent markets. Current trends and strategy give us confidence that summer '25 will be significantly ahead of summer '24," it added.
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By Eric Cunha, Alliance News news editor
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