(Alliance News) - The FTSE 100 was called to open down on Monday morning, ahead of Donald Trump's first day as 47th US president.
Swissquote's Ipek Ozkardeskaya commented that beyond optimism for cryptocurrencies, which he intends to make "a policy priority", "Trump policies are expected to be a double-edged sword.
"His pro-growth policies and deregulation are expected to benefit the US economy but his tariff policies will certainly lead inflation higher and soften the Fed doves' hands for easing policy. In addition, exploding debt levels will likely further push the borrowing costs higher."
In corporate news, European Smaller Cos Trust has released a fresh statement urging shareholders to vote against Saba Capital at the upcoming requisitioned meeting, saying that the latter wants to "seize control of your company...profit from the prospective management fees", and "to radically change your company's investment strategy away from European small-cap equities".
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: called down 17.3 points, 0.2%, at 8,487.92
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Hang Seng: up 1.8% at 19,936.69
Nikkei 225: up 1.2% at 38,902.50
S&P/ASX 200: up 0.5% at 8,347.40
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DJIA: closed up 334.70 points, 0.8%, at 43,487.83
S&P 500: closed up 59.32 points, 1.0%, at 5,996.66
Nasdaq Composite: closed up 291.91 points, 1.5%, at 19,630.20
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EUR: higher at USD1.0309 (USD1.0292)
GBP: higher at USD1.2213 (USD1.2189)
USD: lower at JPY156.10 (JPY156.34)
GOLD: lower at USD2,705.97 per ounce (USD2,715.22)
OIL (Brent): lower at USD79.66 a barrel (USD80.05)
(changes since previous London equities close)
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ECONOMICS
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Monday's key economic events still to come:
11:00 CET eurozone construction output
10:15 CET Italy construction output
08:30 CET Switzerland producer and import prices
US Martin Luther King, Jr. Day. Financial markets closed.
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Germany's producer price index swung to a deflation on a monthly basis in December, but inflation accelerated annually, official figures showed on Monday. According to the Federal Statistical Office in Germany, producer prices increased 0.8% in December from a year before, with PPI inflation accelerating from 0.1% for November but below FXStreet-cited market consensus for a 1.1% increase. On a monthly basis, prices decreased 0.1% in December, missing consensus for a 0.3% rise and compared with 0.5% inflation in November from October. "In December 2024, higher capital goods prices were the main reason for the year-on-year increase in producer prices," Destatis explained. "Non-durable consumer goods, durable consumer goods and intermediate goods were also more expensive than in the same month of the previous year, while energy was less expensive."
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The People's Bank of China has announced that it would leave key interest rates unchanged. Following a meeting of the Monetary Policy Committee, a decision was made by the central bank to maintain its one-year loan prime rate at 3.1%. The five-year LPR also remains unchanged at 3.6%.
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Japanese industrial production slumped during November, revised data from the Ministry of Economy, Trade & Industry showed. In November, industrial production in fell 2.2% from the previous month. FXStreet-cited consensus had expected a 2.3% decline in line with preliminary figures. Industrial production declined 2.7% year-on-year in November, improving from a 2.8% fall in preliminary figures. For October, METI reported 2.8% growth month-on-month and 1.4% growth year-on-year. Meanwhile, production capacity in November decreased by 0.5% from October.
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BROKER RATING CHANGES
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Jefferies raises British Land to 'hold' (underperform) - price target 310 (320) pence
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Citigroup raises National Grid to 'buy' (neutral) - price target 1,063 (1,050) pence
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Jefferies reinitiates TT Electronics with 'hold' - price target 97 pence
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COMPANIES - FTSE 100
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BT Group's Openreach Ltd has announced a record number of new exchange locations where the business plans to halt the sale of traditional copper-based phone and broadband services. The aim is to encourage people to upgrade to new digital services over an ultrafast Full Fibre connection. Openreach announced 163 new exchange locations, covering more than 960,000 premises across the UK. James Lilley of Openreach said: "We're moving to a digital world and Openreach is helping with that transformation by rolling out ultrafast, ultra-reliable, and future-proofed digital Full Fibre across the UK...Already, our Full Fibre network is available to more than 17 million homes and businesses, with more than 5.5 million premises currently taking a service. It makes no sense, both operationally and commercially, to keep the old copper network and our new fibre network running side-by-side. As copper's ability to support modern communications declines, the immediate focus is getting people onto newer, future-proofed technologies."
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AstraZeneca announced that its and Daiichi Sankyo's Datroway has been approved by the US Food & Drug Administration for patients with previously treated metastatic HR-positive, HER2-negative breast cancer. The regulatory nod was based on results from the Tropion-Breast01 phase 3 trial, in which Datroway "significantly reduced the risk of disease progression or death by 37% compared to [the] investigator's choice of chemotherapy", Astra said.
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COMPANIES - FTSE 250
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In its second-quarter update, PRS REIT said its key drivers remain strong, despite recent market volatility, and are reflected in its trading performance. The number of completed homes rose to 5,437 as of December 31, from 5,264 one year prior, with the estimated rental value rising to GBP68.6 million per annum from GBP60.3 million. Rent collection relative to rent invoiced was unchanged on-year at 99%. Also, PRS said it expects to declare an interim dividend for the second quarter ended December 31 in mid-March.
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European Smaller Cos Trust issued a strong rebuke to the "damaging proposals" made by Saba Capital Management LP. Saba has requisitioned general meetings at seven trusts and nominated representatives to replace existing directors. The GM for European Smaller will take place on February 5. The trust said Saba's statements in a webinar and presentation last week "confirmed its intention is to take over the management of your company". "Saba intends to radically change your company's investment strategy away from European small-cap equities, at a time when the sector is attractively valued," European Smaller said. "This means your company would no longer invest in European smaller companies but would become an investment trust which will invest in other investment companies." The board has unanimously recommended that shareholders vote against all resolutions put forward by Saba. Chair James Williams said: "Saba's intentions are now clear, they want to seize control of your company, appoint themselves as manager, profit from the prospective management fees and change the investment approach."
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OTHER COMPANIES
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Banco Santander is exploring options for its UK business, including leaving the UK market entirely, the Financial Times reported on Saturday, citing "people familiar with the matter". The Madrid-based lender first entered the UK two decades ago by acquiring retail bank Abbey National. Santander enjoys lower returns from its ring-fenced UK bank compared to other markets, and in November it had to set aside GBP295 million to cover potential costs of a UK court ruling about possible mis-selling of car loans. An exit from the UK would involve selling Santander UK, which includes both retail and commercial banking operations. However it is unclear who would be interested in buying the business, two sources told the FT, and Santander could still decide to keep it.
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By Emma Curzon, Alliance News reporter
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