Last checked at LONDON (Alliance News) - With Chinese markets on holiday, UK stocks have opened higher Thursday, following a positive close on Wall Street and ahead of the European Central Bank's rate decision and press conference at midday.
EasyJet shares lead the FTSE 100, up 6.3%, after it raised its full-year profit guidance following a strong summer trading season.
Here is what you need to know at the London market open:
----------
MARKETS
----------
FTSE 100: up 1.2% at 6,154.23
FTSE 250: up 0.6% at 16,984.64
AIM ALL-SHARE: up 0.5% at 734.04
----------
Hang Seng: market closed for holiday.
Nikkei 225: closed up 0.5% at 18,182.39
DJIA: closed up 1.8% at 16,351.38
S&P 500: closed up 1.8% at 1,948.86
----------
GBP: down at USD1.5273
EUR: flat at USD1.1227
GOLD: up at USD1,133.70 per ounce
OIL (Brent): down at USD50.17 a barrel
(changes since end of previous GMT day)
----------
ECONOMICS AND GENERAL
----------
Thursday's Key Economic Events still to come
(all times in BST)
08:45 Italy Markit Services PMI
08:50 France Markit Services and Composite PMI
08:55 Germany Markit Services and Composite PMI
09:00 EU Markit Services and Composite PMI
09:30 UK Markit Services PMI
10:00 EU Retail Sales
10:00 EU Retail Sales
12:30 US Challenger Job Cuts
12:45 EU ECB Interest Rate Decision
13:30 EU ECB monetary policy statement and press conference
13:30 US Trade Balance
13:30 US Initial and Continuing Jobless Claims
13:30 Canada International Merchandise Trade
14:45 US Markit Services and Composite PMI
15:00 US ISM Non-Manufacturing PMI
15:30 US EIA Natural Gas Storage change
----------
The European Central Bank is expected to announce Thursday that it held interest rates on hold at an historic low as it sizes up the impact on the eurozone of the recent round of global market and economic uncertainties. The ECB's 25-member governing council will say that it left its benchmark refinancing rate unchanged at 0.05%, analysts predict. However, weak inflation, renewed economic and market tensions have increased the pressure on the ECB to consider more action to shore up the eurozone economy and head off the threat of deflation. Many analysts believe the eurozone's subdued inflationary outlook could lead ECB President Mario Draghi to use his press conference on Thursday to prepare financial markets for new emergency measures.
----------
In another sign that the jobs market is improving, the Federal Reserve's Beige Book has reported increased wage pressures in a number of districts around the US. "Several" of the 12 district banks "reported increasing wage pressures caused by labor market tightening," according to the Beige Book, a collection of anecdotal information on economic conditions. It's the first time in years that respondents reported wage pressures. Taken with Wednesday's relatively strong ADP jobs report, the Fed may be compelled to raise interest rates later this month. An upbeat August jobs report may seal the deal on Friday, but policy makers will also be mindful of falling stocks and headwinds from China.
----------
Brazil's central bank decided to leave its key interest rate unchanged at a nine-year high. Policymakers of the central bank unanimously voted to maintain its key Selic rate at 14.25%. The bank had raised its rates at the previous seven straight meetings.
----------
China will reduce its military ranks by around 300,000 personnel, President Xi Jinping said. The country's military is currently the largest in the world with an estimated 2.3 million troops. "Justice will prevail. Peace will prevail. The people will prevail," Xi said, at the inauguration of a large-scale military parade through the capital to mark the 70th anniversary of the end of World War II.
----------
US President Barack Obama on Wednesday secured enough votes in the US Senate to ensure the nuclear deal with Iran cannot be blocked by Congress. Senator Barbara Mikulski's decision to back the deal came as the Obama administration continued a major push to win support for the deal in Congress and from the public. Mikulski became the 34th senator to back the deal, giving Obama the support he needs to push it through.
----------
Ireland's service sector activity continued to expand strongly in August, survey figures from Markit Economics showed. The Investec services purchasing managers' index fell to 62.1 in August from 63.4 in the previous month. However, any reading above 50 indicates expansion in the sector. New orders increased for the thirty-seventh successive month in August, underpinned by a general improvement in business conditions. But the rate of expansion slowed.
----------
The services sector in Japan continued to expand in August, and at a faster pace, the latest survey from Nikkei showed, with a PMI score of 53.7. That's up from 51.2 in July, and it moves further above the boom-or-bust line of 50 that separates expansion from contraction. The composite index came in with a score of 52.9, up from 51.5.
----------
BROKER RATING CHANGES
---------
UBS RAISES MORRISON TO 'NEUTRAL' ('SELL') - TARGET 175 (165) PENCE
----------
UBS CUTS EASYJET TO 'NEUTRAL' ('BUY') - TARGET 1,750 (1,950) PENCE
----------
UBS INITIATES WIZZ AIR WITH 'BUY' - TARGET 2200 PENCE
----------
TRADERS: MERRILL LYNCH CUTS DRAX GROUP TO 'UNDERPERFORM' ('NEUTRAL')
----------
TRADERS: JPMORGAN RAISES RECKITT BENCKISER TO 'OVERWEIGHT' ('NEUTRAL')
----------
BERENBERG INITIATES SENIOR WITH 'BUY' - TARGET 320 PENCE
----------
Investec Ups Centamin To Buy From Hold, Price Target To 67p From 58p
----------
COMPANIES - FTSE 100
----------
Budget airline easyJet upgraded its full-year profit guidance following a strong summer trading season. The airline said its pretax profit for the financial year to the end of September is now expected to be GBP675 million to GBP700 million, up from its previous guidance of GBP620 million to GBP660 million. The group said its load factor in August was 94.4%, a new monthly record for the company, while passenger numbers increased to 7.1 million, another record.
----------
Rio Tinto outlined the next phase of its plans to capitalise on the iron ore market "through a relentless focus on productivity and efficiency, technology, and people development" to drive down costs at its flagship Pilbara iron ore mine in Australia. The miner believes, despite a slowdown in China and considerably lower iron ore prices compared to a year ago, that steel demand across China and the rest of the world will grow at an average of 2.5% per year over the next 15 years. "This rigorous analysis confirms that Chinese crude steel production is expected to reach around 1.0 billion tonnes by 2030," said the miner. Away from China, Rio Tinto sees opportunities in other emerging markets and said non-Chinese steel demand is expected to increase by 65% by 2030.
----------
Barclays said it is selling a range of non-core operations in Portugal at a likely loss of about GBP200 million, as it seeks to cut risk-weighted assets and improve returns to shareholders. The bank said it has agreed to sell its retail banking, wealth and investment management businesses in Portugal, as well as part of its corporate banking business which serves smaller businesses, to Spanish lender Bankinter. According to Bankinter, it is to pay about EUR100 million for the operations. Barclays also agreed to sell its Portuguese life insurance and pensions business to Bankinter Seguros de Vida, a joint venture between Bankinter and Spanish insurer Mapfre. According to Bankinter, the joint venture is to pay EUR75 million for the business. Some operations in Portugal are to be retained.
----------
The European Commission said it has opened an in-depth investigation to assess whether the proposed acquisition by Mondi of two industrial packaging plants currently owned by Walki is in line with the EU Merger Regulation. The Commission indicated concerns that Mondi's acquisition of two of Walki's packaging plants could lead to less choice and higher prices for customers of certain packaging materials, used for example to transport and protect fresh food or paper. Mondi is a vertically integrated packaging and paper manufacturer, and also operates a number of plants across Europe, manufacturing extrusion coating products. The plants Mondi intends to buy from Walki also manufacture extrusion coating products.
----------
US computing and IT services group IBM announced an expansion of its Internet of Things platform, called IBM IoT Foundation, through a collaboration agreement it has inked with chipmaker ARM Holdings. The deal will allow IBM to provide out-of-the-box connectivity with ARM mbed-enabled devices to analytics services.
----------
Private equity company 3i Group is understood to have started talks with advisers on a strategic review of Mayborn Group, which could lead to a GBP275 million sale of the business, Sky News reported. Mayborn is the owner of the Tommee Tippee baby products range and has been owned by 3i since it acquired the company in 2006.
----------
FTSE Russell confirmed that Berkeley Group Holdings will replace Weir Group in the FTSE 100 from the market open on Monday, September 21, following completion of its quarterly review. Sophos, Circassia Pharmaceuticals, and P2P Global Investments will join the FTSE 250, replacing Lonmin, Premier Farnell, and James Fisher & Sons.
----------
COMPANIES - FTSE 250
----------
Transport operator Go-Ahead Group said its annual pretax profit was pulled lower by exceptional costs, but said its underlying performance was strong and its revenue surged higher thanks to stronger-than-expected trading in its rail unit. The company said its pretax profit for the year to June 27 was GBP78.7 million, down from GBP91.2 million a year earlier, as the group booked GBP8.8 million in exceptional costs, having booked a GBP12.1 million gain a year earlier. Stripping out exceptional costs, Go-Ahead's pretax profit was up to GBP96.6 million from GBP84.9 million. The group said it will pay a final dividend of 63.4 pence per share, up from 59.0p a year before, meaning its full-year dividend will be up 6.5% to 90.0p per share.
----------
Grocery wholesaler Booker Group said its total sales were lower in the ten weeks to August 28, hit by the ban imposed on small stores displaying tobacco products, though its non-tobacco sales edged higher. The company said its total sales for the ten weeks were down 2.0%, hit by a 6.5% decline in tobacco sales. Excluding tobacco, its sales were up 0.1%. Like-for-like total sales were down by 1.8% for the same reason, as tobacco sales fell 6.6% and its non-tobacco sales rose 0.5%. The company noted the approval announced late Wednesday by UK's Competition and Markets Authority, the antitrust regulator, of its acquisition of Musgrave Retail Partners GB, which includes the Londis and Budgens businesses in the UK.
----------
Premier Oil said it has plugged and abandoned its latest exploration well in the Norwegian North Sea after it intersected a reservoir that was clogged with water. The company said the 3/7-10 S exploration well on the PL 539 licence in the Norwegian sector of the North Sea encountered around 110 metres of good reservoir quality, but it contained water rather than oil. Premier has a 40% interest in the well.
----------
Central and Eastern European low-cost carrier Wizz Air Holdings said its passenger numbers and load factor both improved in August. The FTSE 250-listed airline said it carried 2.0 million passengers in the month, up 19% from the 1.7 million it carried a year earlier. Wizz Air's load factor in the month was up by one percentage point to 93.2% from 92.2%.
----------
Motor retailer and aftersales services provider Lookers said it has struck an GBP87.5 million cash deal to acquire Addison Motors, which trades as Benfield Motor Group. Benfield is based in Newcastle-upon-Tyne and operates 30 car dealerships across the UK, offering sales, service, parts and bodyshop facilities for new and used cars and commercial vehicles, Lookers said.
----------
COMPANIES - INTERNATIONAL
----------
Swiss crop chemicals major Syngenta said it plans to divest its global vegetables seeds business. The high margin business has a significant global footprint and a wide array of best-in-class varieties. As such, it is expected to attract significant third-party interest. Syngenta also noted that it plans to buy back more than USD2 billion of shares.
----------
French media and music company Vivendi said its second-quarter net income to shareholders increased to EUR1.96 billion from EUR1.48 billion last year. Revenue for the quarter rose 2.1% to EUR2.6 billion from EUR2.39 billion a year ago. On a constant currency basis, revenue was up 1.9%.
----------
Thursday's Scheduled AGMs/EGMs
Polar Capital Technology Trust
Hardy Oil & Gas
Daejan Holdings
Dart Group
Carclo
Consort Medical
Ncondezi Energy
----------
By Tom Waite; thomaslwaite@alliancenews.com; @thomaslwaite
Copyright 2015 Alliance News Limited. All Rights Reserved.
29 Aug 2014 05:24
