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(Alliance News) - London's FTSE 100 is set to tread water on Tuesday, with a slump for US tech shares overnight keeping a lid on enthusiasm.
Nvidia was among the worst hit by the sell-off, with the chipmaker slumping 6.7%.
"The selloff hit suddenly, right after the company stole the status of the world's most valuable company from Microsoft last week. There has been no bad news regarding the company's fundamentals on the newswire, no analyst downgrades, no soft forecasts, no rumours of slowing sales. It's just that the end of last quarter and the first half may have brought some investors to take some profit and go to the sidelines," Swissquote analyst Ipek Ozkardeskaya commented.
"One question that everyone asks is whether last week's good news marked the finale of the Nvidia's surge to the top, and if the past three-day selloff is the beginning of a sharper downside correction."
In UK corporate news, AstraZeneca reported mixed trial results for its Imfinzi drug, while Land Securities has lifted its stake in a retail asset.
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 8,273.45
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Hang Seng: down 0.1% at 18,026.28
Nikkei 225: up 1.0% at 39,173.15
S&P/ASX 200: up 1.4% at 7,838.80
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DJIA: closed up 260.88 points, 0.7%, at 39,411.21
S&P 500: closed down 0.3% at 5,447.87
Nasdaq Composite: closed down 1.1% at 17,496.82
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EUR: up at USD1.0736 (USD1.0728)
GBP: down at USD1.2689 (USD1.2691)
USD: down at JPY159.49 (JPY159.69)
GOLD: down at USD2,326.60 per ounce (USD2,331.10)
OIL (Brent): up at USD85.10 a barrel (USD85.07)
(changes since previous London equities close)
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ECONOMICS
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Tuesday's key economic events still to come:
14:00 BST US house price index
15:00 BST US consumer confidence
15:00 BST US Richmond Fed manufacturing index
17:00 BST US Federal Reserve Governor Lisa Cook speaks
19:10 BST US Federal Reserve Governor Michelle Bowman speaks
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UK Prime Minister Rishi Sunak's efforts to get the Tories' faltering campaign back on track continue to be dogged by the polling day betting scandal. Over the weekend, it emerged that another senior Conservative official was facing questions over bets placed on a July election in the days before the PM announced he was going to the country. It took to four the number of individuals now implicated in the allegations being probed by the Gambling Commission – including two of the party's candidates now standing for election. With the opposition parties pressing the Tories to come clean on just how widely the commission is investigating, Sunak was able to reassure journalists that there was at least one person in the clear: himself. The PM said that in all his time as an MP he had never placed a bet on politics and that his family was similarly in the clear. "(The Gambling Commission) don't talk about the individuals that they are investigating," he told reporters on the campaign trail in Edinburgh. "What I can tell you is I am not aware of any other candidate that they are looking at." Senior Tories remain deeply unhappy at the way the controversy continues to overshadow their campaign efforts, with former defence minister Tobias Ellwood warning it was a "deeply unhelpful, self-inflicted distraction" which could cost them seats.
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China's premier called Tuesday for countries to "oppose decoupling", as economic tensions simmer between Beijing and the EU, a key trading partner that is preparing to impose new tariffs on Chinese electric vehicles next month. Friction between the West and the world's second-largest economy has intensified in recent years, as geopolitical hotspots crop up around the world and Beijing and Washington compete for supremacy in advanced technology. "We should broadly open our minds, work closely together, abandon camp formations, (and) oppose decoupling," said Li Qiang, China's second-ranking leader who has been tasked by President Xi Jinping with managing economic affairs. Li's comments came during a speech at the opening of a World Economic Forum conference known as the "Summer Davos", held this year in the northeastern Chinese city of Dalian.
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The EU Monday imposed sanctions on 19 Chinese companies aimed at punishing what the West believes is Beijing's support for Russia's war in Ukraine. A list published in the EU's Official Journal includes several companies located in Hong Kong as well as two global satellite giants. The 14th package of sanctions against Russia added 61 new companies to the list of entities accused of directly "supporting Russia's military-industrial complex" in the war in Ukraine, bringing the total to 675 firms. These companies are now subject to drastic restrictions over sales of "dual-use goods and technology" that could be used for the "enhancement of Russia's defence and security sector". China denies Western accusations that it is supporting Russia's military campaign.
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BROKER RATING CHANGES
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Berenberg raises Admiral to 'buy' (hold) - price target 3,127 (2,973) pence
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Berenberg cuts Direct Line to 'hold' (buy) - price target 220 pence
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COMPANIES - FTSE 100
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AstraZeneca said its Imfinzi drug met both its primary and secondary aims in a probe in on sufferers of bladder cancer. Imfinzi showed a "statistically significant and clinically meaningful improvement" in event-free survival, meeting its primary endpoint. Event-free survival is the length of time after a treatment ends that the patient remains free of complications. The secondary endpoint of improved overall survival versus neoadjuvant chemotherapy was also met. "The Niagara results support our strategy to move immunotherapy to the early stages of cancer treatment. This perioperative regimen with Imfinzi improved survival and reduced the rate at which patients experience disease recurrence or progression. We are eager to bring this regimen with the potential to transform the standard of care to patients as soon as possible," Astra's Oncology R&D Executive Vice President Susan Galbraith said. Less promisingly, Imfinzi did not achieve "statistical significance for the primary endpoint of disease-free survival" versus placebo in a probe on non-small cell lung cancer sufferers. Galbraith said the firm was "disappointed" by the results. "Imfinzi has helped change the treatment landscape and achieved multiple positive Phase III trials for patients with earlier stages of lung cancer. We are committed to addressing the remaining unmet need in lung cancer through our broad development programme," Galbraith added. Elsewhere, Astra noted its Tagrisso treatment, with the addition of a form of chemotherapy, has been backed in Japan as a first-line treatment for some adult sufferers of non-small cell lung cancer.
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Land Securities said it has completed a deal to up its stake in the Bluewater retail asset in Kent. The property investor now has just over a 66% stake in the asset, after sealing the purchase of an additional holding from GIC for GBP120 million. "Based on the income Landsec's existing investment in Bluewater generated over the year to March 2024, this acquisition increases the company's net rental income by GBP10.3 million on an annualised basis. This transaction is in line with Landsec's objective to grow its investment in major retail destinations, recycling capital from its recent non-core disposals in an earnings accretive way," it added.
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COMPANIES - FTSE 250
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Hipgnosis Songs Fund said its USD1.59 billion takeover by Blackstone has edged closer. Merger clearance in the US and UK has occurred, leaving just approvals at court and general meetings, as well as the customary court sanctioning of the transaction, as the remaining hurdles. It still expects the deal to be sealed by the end of July. HSF earlier in June backed a slightly improved takeover offer from the US private equity firm. Blackstone had upped its offer to USD1.31 per Hipgnosis share from USD1.30 previously. The increased offer was made despite Blackstone's only declared rival to buy Hipgnosis, Concord Chorus, withdrawing from the race, unwilling to raise its own offer of USD1.25 per share.
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OTHER COMPANIES
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Saga said it has traded in line with expectations four months into its financial year. During the period to June 24, the provider of insurance and travel services for people aged 50 and over said it has made a "good start". "The group has traded in line with expectations for the first four months and remains on track for the full year," it added. Load factors at its Ocean and River Cruise businesses are higher year-on-year, while travel bookings are also on the up. Travel booked revenue is up 14%, on higher passenger numbers. Elsewhere, it added: "Market conditions for Insurance remain challenging. We are taking action to stabilise our Broking business and are seeing early signs of the expected benefits in motor. Emerging net rate inflation in home means the actions are expected to have less of an impact overall." Results for the six months to July 31 will be released on October 2.
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Automotive retailer Vertu Motors expects full-year results in line with expectations, after "positive" trading in the three months to end of May. For the three months, it reported new car retail and Motability like-for-like volume growth of 6.8%. Motability is a scheme which offers affordable motoring for disabled people, their families, and carers. Vertu noted "increased discounting" hurt margins. Like-for-like new vehicle margins were 7.4%, falling from 8.1% 12 months prior. It noted an "increased Motability mix at lower margins and increased discounting". Vertu added: "The board has been encouraged by the trading results for the period. The zero emission mandate to force the uptake of zero emission vehicles sold in the UK has the potential to create volatility in the new car market. This may include reduced supply of new petrol and diesel cars in the coming periods and would lead to a strengthening of petrol and diesel used car values."
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Funding Circle said it has struck a deal to sell its US business, allowing the finance provider to small business finance firm to focus on its UK offering. It will sell its US arm to iBusiness Funding LLC for GBP33 million in cash. The sale includes all loan portfolios. "The proceeds from the transaction will be reviewed in line with our capital allocation framework," it added. The transaction is expected to close by the end of June. Funding Circle Chief Executive Lisa Jacobs added: "In March, I announced that we were simplifying the business by exiting the US and focusing on profitable growth in the UK business. Alongside the UK restructuring actions announced in May, we are continuing to execute against this plan with the sale of the US business to IBF. The UK business is on track to be profitable in H2, in line with our guidance."
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By Eric Cunha, Alliance News news editor
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