Last checked at LONDON (Alliance News) - London stocks opened marginally higher Wednesday as a rise in the oil price, driven by optimism on a potential output freeze at the upcoming Organization of Petroleum Exporting Countries meeting, helped oil and gas companies higher.
Reuters reported all signs were now pointing towards OPEC members reaching an agreement to freeze output when they meet on April 17. Two sources along with Kuwait's OPEC governor claimed a deal was likely to be struck, suggesting Iran's aim to raise supply will not scupper a deal.
Blue-chip oil companies BP and Royal Dutch Shell were both trading higher on the news.
At the other end of the FTSE 100, shares in budget carrier easyJet were off 2.2% after the group reported a falling load factor in March, hit by cancellations due to air traffic control strikes in France.
Passenger numbers still rose for easyJet in the month, but the news appeared to have a negative read across for International Consolidated Airlines Group, the owner of British Airways, which was also among the biggest fallers in early trade.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.3% at 6,106.05
FTSE 250: up 0.1% at 16,743.76
AIM ALL-SHARE: up 0.2% at 713.18
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Hang Seng: flat at 20,176.44
Nikkei 225: closed down 0.1% at 15,715.36
DJIA: closed down 0.8% at 17,603.32
S&P 500: closed down 1.0% at 2,045.17
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GBP: flat at USD1.4134 (USD1.4133)
EUR: down at USD1.1355 (USD1.1370)
GOLD: down at USD1,227.64 per ounce (USD1,228.82)
OIL (Brent): up at USD38.48 a barrel (USD37.66)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Wednesday's Key Economic Events still to come
(all times in BST)
12:00 US MBA Mortgage Applications
15:00 Canada Ivey Purchasing Managers Index
15:30 US EIA Crude Oil Stocks change
19:00 US FOMC Minutes
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Prime Minister David Cameron has been forced to defend his family's tax affairs, as the Panama Papers data leak claimed its first political casualty. Facing calls to explain his family's finances, the Prime Minister declared he has "no shares, no offshore trusts, no offshore funds". But Cameron declined to say if his family had reaped the rewards of an offshore arrangement in the past or were likely to in the future. He came under scrutiny after his late father Ian's tax affairs were highlighted in the document disclosure. Meanwhile, Iceland's prime minister quit on Tuesday over reported offshore financial dealings by him and his wife. Sigmundur David Gunnlaugsson had faced growing protests since the major data leak.
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The UK Business Secretary has arrived in Mumbai to hold talks with steel giant Tata as efforts continue to save thousands of jobs. Sajid Javid will meet Cyrus Mistry, chairman of the Indian conglomerate, which is selling its loss-making UK business. Javid was involved in a series of meetings on Tuesday with other ministers, industry officials and union leaders. The head of a group which could rescue steel plants and save thousands of jobs said he is aiming to avoid any redundancies if a deal is agreed. Sanjeev Gupta, the head of the Liberty Group, held talks with the government and has raised hopes that jobs could be saved, especially at the huge plant in Port Talbot, South Wales.
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The two US presidential candidates who emerged on top Tuesday in the Wisconsin primary claimed their campaigns are unifying their respective parties and gathering steam. Republican Ted Cruz and Democrat Bernie Sanders were the projected winners. Each won with wide margins, and each said the wins showed their campaigns have the momentum needed to steal the nomination from their party's current front-runners. The two US senators had been favoured to finish on top ahead of Republican Donald Trump and Democrat Hillary Clinton in the north-central US state.
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The EU's executive is due Wednesday to lay out options which it says will ensure a fairer distribution of refugees across the bloc, after its asylum system broke down last year amid a migration surge into Europe. Under the EU's so-called Dublin rules, asylum seekers must register their claim in the first member state they set foot in, and that country decides whether to accept or reject the request. For most of the more than 1 million people reaching the bloc last year, this would have been Greece. But the country was overwhelmed by the arrivals, letting many of them continue their journey unchecked towards wealthy northern European states such as Germany and Sweden. The European Commission is expected to outline two options to reform the Dublin system, according to a draft communication
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China's private sector activity expanded at the fastest pace in eleven months in March, driven by slightly stronger growth of services activity and a renewed expansion of manufacturing output, survey data published by Markit showed. The Caixin composite output index climbed to 51.3 in March from 49.4 in the previous month. Any score above 50 indicates expansion, while a reading below 50 suggests contraction in the sector. The General Services Business Activity Index rose to 52.2 in March from 51.2 in February. Manufacturing output returned to growth after an 11-month sequence of stagnant or reduced production.
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The South African parliament on Tuesday voted against an impeachment of President Jacob Zuma following his implication in a corruption scandal. A total of 233 legislators voted against the motion to impeach Zuma, with 143 in favour and no abstentions, in the parliamentary session televised live by the broadcaster eNCA. The Constitutional Court said last week Zuma had violated the constitution when not obeying a recommendation from the public protector to repay part of a sum of about USD15 million to upgrade his rural homestead in the town of Nkandla. Zuma then apologized to the nation for the way he had used taxpayers' money for the restoration of his country home, but denied any conscious wrongdoing.
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BROKER RATING CHANGES
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BERENBERG RAISES INFORMA PRICE TARGET TO 725 (530) PENCE - 'HOLD'
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BERENBERG CUTS TELECOM PLUS TO 'HOLD' ('BUY') - TARGET 1000 (1400) PENCE
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JPMORGAN RAISES UNILEVER PLC PRICE TARGET TO 3550 (3200) PENCE - 'OVERWEIGHT'
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COMPANIES - FTSE 100
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Miner and commodities trading house Glencore said it has entered a deal to sell a 40% stake in its Agricultural Products business to Canada Pension Plan Investment Board for USD2.5 billion. The sale of the stake in the business values the agricultural arm, which owns agricultural origination and logistics assets across the world, at USD6.25 billion in total. Glencore also said it has entered into an initial four-year lock-up period with Canada Pension Plan Investment Board to sell up to 20% further stake in the business.
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easyJet said the number of passengers carried rose in March year-on-year, but its load factor declined following cancellations due to strikes in France. The low-cost airline said the number of passengers carried grew by 4.3% in March to 5.7 million from 5.5 million in the same month the year before. Load factor, however, declined by 1.3 percentage points to 91.3% from 92.6%. easyJet said there were 611 cancellations in March, with the majority due to air traffic control strikes in France. On a rolling 12-month basis, passengers rose by 7.2% to 70.8 million from 66.0 million, and load factor grew by 0.6 percentage points to 91.5% from 90.9%.
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COMPANIES - FTSE 250
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Auto Trader Group said a group of current and former directors and managers of the company have agreed to sell 1.2 million shares in the company, or a 1.6% stake, at a price of 370 pence. Shares in Auto Trader closed at 390.71p Tuesday. The sale follows the expiry of the lock-up undertakings given by the individuals at the time of the company's initial public offering, and following the sale the current managers and directors will continue to have an interest in 39.8 million shares in the company, or a 4.0% stake.
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COMPANIES - LONDON MAIN MARKET AND AIM
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Topps Tiles said revenue in the first half of its financial year was up from a year earlier, as it made progress in its strategy of "out-specialising the specialists". The tile retailer reported revenue of GBP108.0 million for the six months to April 2, up slightly from GBP104.0 million for the same period a year earlier, but said growth was slower in like-for-like sales due to the impact of Easter falling earlier in 2016. Like-for-like annual revenue growth for the full six months was 4.7%, down from 5.2% a year earlier.
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Mail and parcels delivery service UK Mail Group said it expects revenue to decline slightly in its financial year that ended March 31, but with pretax profit set to be in line with its expectations. UK Mail said its anticipates revenue for the financial year will fall by around 1.0%, hit by a continued mix effect in its Mail business which will result in revenue for that arm falling 3.0%, despite volumes rising 5.0%. The Parcels business is set to see volumes growth around 4.0%, though growth suffered year-on-year in the fourth quarter from the comparison with the spike in volumes seen a year prior due to the collapse of rival City Link.
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Engineering services company Costain Group said it has appointed Paul Golby as its chairman designate. Golby will take on the chairmanship following Costain's annual general meeting on May 5, replacing incumbent David Allvey. Golby is the chairman of NATS Holdings, the UK air traffic control group, and a non-executive director of power grid operator National Grid.
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Drone maker Strat Aero confirmed it has filed legal action against the boss of a former subsidiary, alleging fraud and misrepresentation. Strat Aero said the action has been filed against W Hulsey Smith, the former chairman and chief executive of Strat Aero subsidiary Aero Kinetics. Strat Aero said the action alleges fraud and breach of contract arising from misrepresentations Hulsey Smith made and which were material in the company's decision to acquire Aero Kinetics in December 2015. A number of possible resolutions for Strat Aero are on the table, it said, including rescinding the deal to acquire Aero Kinetics, in addition to actual and consequential damages.
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COMPANIES - INTERNATIONAL
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Pfizer is understood to have decided to terminate its USD160 billion merger with Allergan, according to reports citing people familiar with the matter. Pfizer will need to pay a USD400 million fee to Allergan for expenses relating to the deal. Allergan, which is run from New Jersey but has a legal domicile in Dublin, last year agreed to merge with Pfizer in a deal that would have given New York-based Pfizer a foreign address and a lower tax rate. CNBC reported earlier that the two companies would mutually end their planned merger amid ongoing moves by US authorities to try and limit the number of so-called tax inversions US businesses are pursuing.
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Communications app WhatsApp has instituted end-to-end encryption for all communications on its network of one billion people worldwide, the company's founders told the tech magazine Wired. The end-to-end encryption protects all text, photo, video and voice communications from eavesdropping - shutting out hackers and criminals, but also law enforcement and intelligence agencies and the Facebook-owned WhatsApp itself. The announcement could increase tensions between Washington and Silicon Valley over how much tech companies help or hinder law enforcement access to data on their devices or networks.
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Wednesday's Scheduled AGMs/EGMs
Tower Resources
BH Global
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By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
Copyright 2016 Alliance News Limited. All Rights Reserved.
16 Apr 2015 15:55
