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(Alliance News) - Stocks in London are set to open up on Friday after a dovish Bank of England interest rates hold on Thursday.
At its May meeting, the Bank of England's Monetary Policy Committee voted by a majority of 7 to 2 to maintain bank rate at 5.25%. Two members preferred to reduce the bank rate by 0.25 percentage points, to 5.00%.
Seven members, Bank of England Governor Andrew Bailey, Sarah Breeden, Ben Broadbent, Megan Greene, Jonathan Haskel, Catherine Mann and Huw Pill, voted in favour of the status quo.
Swati Dhingra and BoE Deputy Governor Dave Ramsden voted for a cut.
Meanwhile, UK gross domestic product data came out before the opening, showing growth above expectations in March and across the first quarter.
In early corporate news, IAG and TBC Bank both posted improved quarterly results.
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 8,400.55
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Hang Seng: up 2.2% at 18,942.65
Nikkei 225: closed up 0.4% at 38,229.11
S&P/ASX 200: closed up 0.4% at 7,749.00
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DJIA: closed up 331.37 points, 0.9%, at 39,387.76
S&P 500: closed up 26.41 points, 0.5%, at 5,214.08
Nasdaq Composite: closed up 44.88 points, 0.3%, at 16,347.64
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EUR: down at USD1.0772 (USD1.0775)
GBP: up at USD1.2531 (USD1.2511)
USD: up at JPY155.69 (JPY155.61)
Gold: up at USD2,364.20 per ounce (USD2,332.88)
(Brent): up at USD84.43 a barrel (USD83.62)
(changes since previous London equities close)
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ECONOMICS
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Friday's key economic events still to come:
10:00 BST China current account
12:45 BST UK BoE external MPC member Swati Dhingra speaks
14:00 BST US Federal Reserve Governor Michelle Bowman speaks
15:00 BST US Michigan consumer sentiment index
15:45 BST US Chicago Fed President Austan Goolsbee speaks
18:30 BST US Federal Reserve Vice Chair Michael Barr speaks
19:00 BST US monthly budget statement
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The UK economy grew ahead of expectations in March and in the first quarter of 2024, according to numbers on Friday. According to the Office for National Statistics, UK gross domestic product rose by 0.4% in March from February, ahead of FXStreet cited consensus of 0.1% growth. UK GDP had expanded 0.2% on-month in February, according to revised data. In the first quarter of 2024, GDP is estimated to have risen 0.6%, beating expectations of a 0.4% rise and following a 0.3% decline in the fourth quarter of 2023 and a 0.1% decline in the third quarter. Compared with the same quarter a year ago, GDP rose 0.2%. The ONS said that in March, industrial production increased by 0.2% from February. It was expected to fall 0.5%, according to FXStreet cited consensus. Production rose by 1.0% in February from January. On an annual basis, industrial production improved by 0.5% in March, having risen by 1.0% a month earlier. Finally, data showed the UK trade deficit narrowed to GBP1.10 billion in March, from GBP2.29 billion in February.
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Israeli Prime Minister Benjamin Netanyahu said Israel will defend itself "alone," if necessary, after Washington threatened to withhold further arms should Israeli troops begin a large-scale push into the southern Gaza Strip city of Rafah. "If we have to stand alone, we will stand alone," he said in a video message released on Thursday. He said Israel would fight "with our fingernails" to win, in his first public statement after the White House said it would restrict arms supplies in the case of a broader attack on Rafah. Israeli operations in Rafah are so far mainly limited to the east of city, where an evacuation order was issued at the start of the week.
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Secretary of State Antony Blinken told his Egyptian counterpart that the US opposes forced relocation of Palestinians from Gaza, after Israel seized the border crossing at Rafah. In a telephone call with Egyptian Foreign Minister Sameh Shoukry, Blinken reaffirmed President Joe Biden's "clear position that the US does not support a major military operation in Rafah and the US' rejection of any forced displacement of Palestinians from Gaza," State Department spokesperson Matthew Miller said. Blinken "also expressed the US' support for the reopening of Rafah crossing and the continued flow of urgently needed humanitarian assistance," Miller said.
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BROKER RATING CHANGES
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Barclays cuts Airtel Africa price target to 135 (150) pence - 'overweight'
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Barclays cuts 3i Group price target to 3030 (3050) pence - 'overweight'
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Jefferies cuts Schroders price target to 385 (430) pence - 'hold'
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COMPANIES - FTSE 100
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British Airways owner IAG said revenue in the first quarter of 2024 rose to EUR6.43 billion from EUR5.89 billion a year earlier. Operating profit multiplied to EUR68 million from EUR9 million, while pretax loss narrowed to EUR87 million from EUR121 million. Chief Executive Officer Luis Gallego commented: "Our group benefits from the strength of our core markets - North Atlantic, South Atlantic and intra-Europe - and the performance of our brands. Investment across the group in transformation is delivering encouraging improvements in punctuality and customer experience at our airlines...We are well-positioned for the summer. The high demand for travel is a continuing trend." IAG expects non-fuel costs to increase slightly in 2024, reflecting investment. Net debt on March 31 stood at EUR7.44 billion, down from EUR9.25 billion a year earlier.
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COMPANIES - FTSE 250
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TBC Bank said pretax profit in the first quarter of 2024 rose to GEL343.2 million, or GBP102.3 million, from GEL296.3 million a year earlier. Total operating income rose to GEL618.0 million from GEL532.2 million, with net interest income up to GEL442.8 million from GEL366.8 million, net fee and commission income up to GEL104.3 million from GEL92.4 million, while other non-interest income ticked down to GEL70.8 million from GEL73.0 million. The Tbilisi, Georgia-based lender also announced a share buyback programme of up to GEL75 million or GBP22.4 million. TBC Bank's total customer base at March 31 rose to 17.9 million from 13.3 million a year earlier. Looking ahead, CEO Vakhtang Butskhrikidze commented: "I believe that the group is well positioned to build further on this strong start to the year and deliver excellent results for our shareholders in 2024, as well as ensuring we are on track to meet our strategic targets for next year. We continue to feel the benefits of strong economic growth within our two major operating countries, with our outlook for Georgian economic growth this year raised to 6.4%, while we expect very solid and consistent 5.6% growth in Uzbekistan."
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OTHER COMPANIES
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Digital advertising, marketing and technology services firm S4 Capital said net revenue in the first quarter of 2024 fell 15% or 12% on a like-for-like basis to GBP186.4 million from GBP219.1 million a year earlier, as it expected. It said this reflected "continuing client caution and anticipated reduction in activity in Technology Services". Revenue fell 20% or 17% on a like-for-like basis to GBP210.2 million from GBP261.7 million, while billings fell 5.7% or 1.9% on a like-for-like basis to GBP430.1 million from GBP455.9 million. It said it has an increased focus on margin improvement through "improved efficiency, billability and pricing". Executive Chair Martin Sorrell commented: "We maintain our targets for the full year and, as in prior years, financial performance will be significantly second half weighted reflecting both our normal seasonality and an expected improvement in market conditions...In addition to significant new business activity, we continue to capitalise on our prominent [artificial intelligence] positioning, developing multiple initial assignments as clients start to experiment with and implement applications."
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By Greg Rosenvinge, Alliance News senior reporter
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