Last checked at 
(Alliance News) - Stocks in London are called lower on Wednesday, as worries about a protracted period of elevated US interest rates tank risk sentiment.
Stocks in New York and Asia suffered as bond yields hit fresh highs, after robust US jobs data added weight to the case for the Federal Reserve to keep interest rates elevated.
Figures from the US Bureau of Labor Statistics showed the number of job openings increased 690,000 to 9.61 million on the last business day of August, from 8.92 million at the end of July. The print came well above market expectations, which had been expecting the number of job openings to dip to 8.8 million at the end of August, according to FXStreet-cited consensus.
Weighing further on sentiment is the ousting of US House of Representatives speaker, Kevin McCarthy, in a brutal, historic rebellion by far-right Republicans furious at his cooperation with Democrats on the government stopgap funding deal over the weekend.
"With the House now without a majority leader, a new leader will need to be appointed, a time-consuming process if the McCarthy experience is any guide, which could complicate the prospect that we might get a new [deal to avert a government shutdown] when the current deal expires next month," CMC Markets' Michael Hewson commented.
In early company news, Tesco reported an upbeat interim update, with strong profit growth. Spirent Communications warned of weak trading since the summer, which will "very materially affect [annual] operating profit". Further afield, Novartis completed the spin-off of Sandoz, its generics and biosimilar division.
Here is what you need to know at the London market open:
----------
MARKETS
----------
FTSE 100: called down 27.4 points, 0.4%, at 7,442.76
----------
Hang Seng: down 1.3% at 17,100.97
Nikkei 225: closed down 2.3% at 30,526.88
S&P/ASX 200: closed down 0.8% at 6,890.20
----------
DJIA: closed down 430.97 points, 1.3%, at 33,002.38
S&P 500: closed down 1.4%, at 4,229.45
Nasdaq Composite: closed down 1.9% at 13,.59.47
----------
EUR: up at USD1.0469 (USD1.0459)
GBP: up at USD1.2078 (USD1.2065)
USD: flat at JPY149.20 (JPY149.22)
GOLD: down at USD1,821.40 per ounce (USD1,824.87)
OIL (Brent): down at USD90.64 a barrel (USD91.00)
(changes since previous London equities close)
----------
ECONOMICS
----------
Wednesday's key economic events still to come:
China - National Day Golden Week continues: financial markets closed. Hong Kong open.
Germany - ECB monetary policy conference
US Fed Michelle Bowman and FRB Kansas City President Jeffrey Schmid speak
10:00 CEST EU services PMI
11:00 CEST EU PPI
11:00 CEST EU retail trade
09:55 CEST Germany services PMI
11:00 IST Ireland unemployment
09:30 BST UK official reserves
09:30 BST UK services PMI
09:30 BST UK narrow money and reserve balances
07:00 EDT US MBA weekly mortgage applications survey
08:15 EDT US ADP national employment report
09:30 CDT US Fed Chicago President Austan Goolsbee speaks at Annual Payments Symposium
09:45 EDT US services PMI
10:00 EDT US ISM services PMI
11:00 EDT US services PMI
----------
Rishi Sunak will rail against post-Thatcher politics and attempt to portray himself as a radical reformer as he faced a backlash for abandoning the northern leg of HS2. The prime minister will use his Conservative conference speech in Manchester on Wednesday to criticise 30 years of a "broken" system incentivising "the easy decision, not the right one". With the Tories having been in charge for the majority of the last three decades, he will pitch himself as the man to "fundamentally change our country" ahead of an election expected next year.
----------
BROKER RATING CHANGES
----------
RBC raises Compass Group to 'sector perform' (underperform) - price target 1,925 (1,675) pence
----------
Goldman Sachs raises Relx to 'buy' - price target 3,405 pence
----------
UBS raises Asos to 'buy' (neutral) - price target 550 (660) pence
----------
COMPANIES - FTSE 100
----------
Tesco said revenue in the 26 weeks to August 26 climbed 5.0% to GBP34.15 billion from GBP32.52 billion a year before. The grocery chain reported strong sales across the group, with retail like-for-like sales rising 7.8%. Inflation eased over the period, Tesco said, also noting that volume and sales mix trends were ahead of expectations. Pretax profit jumped to GBP1.22 billion from GBP396 million. It left its interim dividend unchanged at 3.85p per share. It now expects to deliver between GBP2.6 billion and GBP2.7 billion retail adjusted operating profit for the financial year, and expects retail free cash flow for the year to be ahead of its medium term guidance. Bank adjusted operating profit still expected between GBP130 million and GBP160 million. Further, Tesco has so far bought back GBP503 million worth of shares from its GBP750 million share buyback programme, which runs until April.
----------
SSE updated on its interim performance for the period to September 30. The energy firm expects to report interim adjusted earnings per share of at least 30p. The guidance reflects a weaker-than-expected performance in renewables, due to adverse weather conditions. While it expects the "lower power price environment and more stable market conditions" to continue over the financial year, it still guides for annual adjusted EPS of over 150p. This is in light of its "balanced portfolio of assets across electricity networks, renewables, flexible generation and storage". However, its performance in the key winter months ahead will depend on weather conditions, plant performance and market conditions. It will update on full-year EPS guidance later in the year. "Our primary focus remains on delivery of our five-year plan out to 2027, which is the platform for up to GBP40 billion of investment in net zero over the next decade," said Finance Director Gregor Alexander.
----------
COMPANIES - FTSE 250
----------
Spirent Communications cut its annual outlook, warning of a weak near-term orderbook. "The impact of negative operating leverage will very materially affect operating profit in this financial year," the automated test and assurance solutions provider warned. The uptick in Telecommunications orders seen over the second quarter "dissipated" over the summer, and the expected rebound in September has not materialised. However, it saw strong growth in its non-telecommunications end markets. For the nine months to the end of September, it expects revenue to be around 20% behind the prior year. "We do not see the year-on-year performance improving in the remaining quarter. We continue to effectively manage gross margin, which continues to track to plan," it added.
----------
TI Fluid Systems said it will begin a share buyback programme for up to EUR40 million. It will run in a series of tranches up to a maximum consideration of EUR5 million each, with the first to start from today and end no later than March 29 next year. All shares repurchased will be cancelled.
----------
OTHER COMPANIES
----------
Novartis said it has completed its spin-off of Sandoz, its generics and biosimilars business. In July, Basel, Switzerland-based pharmaceutical firm, Novartis, announced plans for the 100% spin-off of its Sandoz business. It was then voted on by shareholders in September. This means that its generics and biosimilar business will list separately in Zurich, whilst Novartis becomes a focused medicine company. Shares of Sandoz will be listed and commence trading Wednesday under the symbol "SDZ" on the SIX Swiss Exchange. Sandoz said it is entering a "new era" as a "stand alone global and European champion in generic and biosimilar medicines". Looking ahead, Novartis reiterated its full-year guidance. It expects high-single-digit sales growth, whilst group core operating income is forecast to grow in low-double-digits to mid-teens.
----------
By Elizabeth Winter, Alliance News senior markets reporter
Comments and questions to newsroom@alliancenews.com
Copyright 2023 Alliance News Ltd. All Rights Reserved.
