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(Alliance News) - London's FTSE 100 is called to open lower at the start of the week, with share price falls for major US tech shares, Nvidia included, spooking investors on this side of the Atlantic.
"One of the most significant moves of last two trading days of the US was a 10% selloff in Nvidia sales for … no reason other than the fact that it was the end of the month, the end of the quarter and the end of H1, and investors preferred taking profits while they repositioned for the new half than buying more Nvidia shares at peak levels, and at a very high valuation with little certainty regarding how to value a stock that's price-to-projected sales hit the highest of the S&P 500," Swissquote analyst Ipek Ozkardeskaya commented.
In the UK, it is the final full week of campaigning before the July 4 general election, and Prime Minister Rishi Sunak will be looking to add some impetus to his charge, which in recent days has been overshadowed by a gambling scandal inside the Conservative Party.
Away from politics, US data will be in focus this week, with a gross domestic product reading on Thursday and the latest personal consumption expenditures data on Friday.
In early UK corporate news, Prudential unveiled a USD2 billion share buyback, while Frasers and THG announced a partnership, which includes a deal for the Sports Direct owner to snap up luxury fashion website Coggles.
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 0.1% at 8,226.62
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Hang Seng: down 0.7% at 17,895.71
Nikkei 225: up 0.5% at 38,804.65
S&P/ASX 200: down 0.8% at 7,733.70
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Dow: closed up slightly at 39,150.33
S&P 500: closed down 0.2% at 5,464.62
Nasdaq Composite: closed down 0.2% at 17,689.36
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EUR: up at USD1.0704 (USD1.0685)
GBP: up at USD1.2650 (USD1.2628)
USD: up at JPY159.75 (JPY159.72)
GOLD: down at USD2,323.64 per ounce (USD2,326.10)
(Brent): down at USD84.31 a barrel (USD85.73)
(changes since previous London equities close)
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ECONOMICS
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Monday's key economic events still to come:
09:00 BST Germany Ifo business climate
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UK Prime Minister Rishi Sunak will warn that it would take decades to recover from the "disaster" of a Labour government as he seeks to rally Tories to fight for every vote in the closing stages of the general election campaign. The PM will tell activists they have just 10 days to "take our message to every corner of the UK" before polls open on July 4. With the Conservatives still around 20 points behind in the polls and after a bruising few days dominated by allegations about alleged insider betting, Sunak will urge Tories not to "surrender" to Keir Starmer's party. The prime minister will launch the Scottish Tory manifesto and address a campaign event in London at the start of the last full week of campaigning. His latest intervention comes with him under pressure from within the Conservative Party to take a tougher stance against those being investigated by the Gambling Commission for betting on the election date.
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The Conservatives have claimed London will become a "more affordable and liveable city" under their manifesto pledges. Business minister Greg Hands said the party has a "clear plan to improve" the capital for the "benefit of all Londoners", just weeks after Labour's Sadiq Khan secured a third term as mayor with a 275,00 majority over the Tory candidate. The Conservatives' plan for London is based on several previously announced policies, including abolishing stamp duty for first-time buyers up to GBP425,000, ruling out pay-per-mile road tax schemes and reversing the mayor's ultra low emission zone expansion. With the opinion polls suggesting Labour gains across the country, the Tories' focus on London could be a sign of concerns about saving their seats in the capital. Hands, who is seeking re-election in Chelsea & Fulham, said: "By abolishing unfair taxes like the Ulez expansion, scrapping national insurance contributions for the self-employed, and building more homes for Londoners, we will make London a more affordable and liveable city. "Unlike Labour under Sadiq Khan, which has consistently failed to meet housing targets and support the night-time economy, we have a clear plan to improve our city for the benefit of all Londoners."
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Labour's UK clean energy plans will "turbocharge" the Scottish economy, the party's shadow chancellor is expected to say during a general election campaign visit to Scotland. Rachel Reeves will set out what she considers will be the economic benefits of Labour's green investment plans – including lower bills and 53,000 jobs – on a visit to a wind farm on Monday morning. She will be joined by Scottish Labour leader Anas Sarwar and together they will argue their Warm Homes Plan will cut energy bills for good by investing in cheaper, clean power sources and upgrading homes. They say the plan will invest GBP6.6 billion across the UK over the next parliament if they are elected to govern in July, creating an estimated 16,000 jobs in Scotland. Labour has also pledged to set up a publicly owned GB Energy company based in Scotland, which will be capitalised with GBP8.3 billion in the first parliament. Party leaders say their plans will create 69,000 new green jobs in Scotland alone. Rachel Reeves said ahead of today's scheduled visit: "A Labour government elected on 4 July will turbocharge Scotland's economy. "Labour will bring back economic stability, unlock investment and deliver the reforms needed to boost growth, create jobs and make working people better off. "After 14 years of the Conservatives and 17 years of the SNP, it's time for change and a vote for Labour is a vote for change."
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BROKER RATING CHANGES
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Peel Hunt cuts Flutter Entertainment to 'hold' (buy) - price target 15,000 (16,000) pence
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Liberum cuts YouGov to 'hold' (buy) - price target 500 (1,420) pence
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COMPANIES - FTSE 100
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Asia-focused insurer Prudential announced a USD2 billion share buyback programme. The firm said the buyback will be completed by no later than mid-2026. Chief Executive Anil Wadhwani commented: "I am pleased with the progress we continue to make in executing our strategy, as we drive towards generating growth in both value and cash returns for shareholders over the long term. The significant growth opportunity ahead of us has not changed and we remain focused on realising that opportunity." The CEO said that Prudential's progress towards its financial goals can "increase the potential for further cash returns to shareholders". Wadhwani added that the firm's dividend policy is unchanged, with it still targeting annual growth in the 7% to 9% range. Prudential's annual premium equivalent "sales trends" in the second-quarter as similar to the first, it added. They had risen 4.2% on-year in the first-quarter, or 7.3% at constant currency.
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GSK said it has landed an approval in Japan and also highlighted regulatory progress in Europe. Its Omjjara for treatment has been approved by Japan's Ministry of Health, Labour & Welfare for use in both newly diagnosed or previously treated myelofibrosis patients, the pharmaceutical firm said. Myelofibrosis is a type of blood cancer. GSK explained this is the "fourth major regulatory approval" for the drug in myelofibrosis space, following backing in the UK, US and Europe. Also in Europe, it announced Monday its Jemperli plus chemotherapy treatment has been accepted for review by the European Medicines Agency to expand its use. The expansion will allow the drug combo to be used in all patients with primary advanced or recurrent endometrial cancer. "The EMA's Committee for Medicinal Products for Human Use will begin the formal review process to make a recommendation to the European Commission, with approval expected in H1 2025," GSK added.
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COMPANIES - FTSE 250
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Chemring named Tony Wood as its next chair, succeeding Carl-Peter Forster who steps down at the end of November. Wood currently sits on the board of aerospace and defence firm Airbus and energy company National Grid. He was formerly chief of executive of one-time London listing Meggitt, an aerospace components maker, between 2018 and 2022. "He brings to the Board significant engineering and sector experience," Chemring said. Wood joins the board from October 1 and will become chair on December 1.
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OTHER COMPANIES
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THG left its annual outlook unchanged as "positive momentum" at the end of last year continued in the first half of this one, and the e-commerce firm also announced a deal with Sports Direct owner Frasers Group. The duo will partner "across several areas". THG's Ingenuity offering will provide Frasers with "courier management services and re-platforming the Frasers Group's Australian fulfilment and logistics operations". The Frasers credit and loyalty platform, Frasers Plus, is integrated into Ingenuity. In addition, a selection of THG's Myprotein products will be launched instore at Sports Direct. "The launch across Sports Direct stores further supports the success of the recent rebrand and the offline growth potential of the brand. Launching collaboration products through Sports Direct further broadens the Myprotein brand appeal, bringing the rapidly growing Hyrox community to both Myprotein and Sports Direct alike," THG added. THG said it has agreed to sell its portfolio of luxury goods websites, including fashion site Coggles, to Sports Direct. On current trading, THG said the second-quarter will represent the "third consecutive quarter of year-on-year revenue growth".
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SIG cut its outlook, as the insulation, roofing and building products supplier reported "market conditions have remained challenging". It now expects 2024 underlying operating profit to be in the range GBP20 million to GBP30 million, which is below the current analyst range of GBP36.7 million to GBP43.0 million. "Subdued demand has continued to be a factor in the majority of the group's markets, reflecting the ongoing softness in the building and construction sector. This impact has been most notable in the French and German markets, and in the end markets of our UK Interiors business. Whilst we continue to see more robust demand in our Poland, Ireland and UK Exteriors businesses, group sales overall were weaker than expected in May and June to date," SIG said.
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By Eric Cunha, Alliance News news editor
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