LONDON BRIEFING: FTSE 100 to fall as US Fed guides for one rate cut

(Alliance News) - Stocks in London are called to open lower on Thursday, as investors respond to the US Federal Reserve guiding for only one interest rate cut by year-end.

The US Federal Reserve left interest rates unmoved on Wednesday, as expected, and the central bank signalled just one cut could be in the offing before the end of the year.

Focus was on the Fed's latest economic projections, which includes the dot-plot of median interest rate expectations.

The chart suggests only one cut could be forthcoming before the end of 2024. The previous projection suggested three.

In early company news, Trident Royalties directors intend to recommend a GBP144 million takeover by Deterra Global.

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 0.4% at 8,185.30

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Hang Seng: up 0.6% at 18,037.58

Nikkei 225: closed down 0.4% at 38,720.47

S&P/ASX 200: closed up 0.4% at 7,749.70

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DJIA: closed down 35.21 points, 0.1%, at 38,712.21

S&P 500: closed up 0.9% at 5,421.03

Nasdaq Composite: closed up 1.5% at 17,608.44

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EUR: down at USD1.0804 (USD1.0848)

GBP: down at USD1.2778 (USD1.2836)

USD: up at JPY157.07 (JPY155.77)

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Gold: down at USD2,311.40 per ounce (USD2,326.83)

(Brent): up at USD82.25 a barrel (USD82.07)

(changes since previous London equities close)

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ECONOMICS

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Thursday's key economic events still to come:

11:00 CEST eurozone industrial production

08:30 EDT US initial jobless claims

08:30 EDT US PPI

10:30 EDT US EIA natural gas stocks

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UK Prime Minister Rishi Sunak will announce up to GBP242 million in bilateral assistance to Ukraine at the G7 summit in Puglia. The package is to be used for immediate humanitarian, energy and stabilisation needs in Ukraine and to lay the foundations for longer term economic and social recovery and reconstruction, the prime minister said.The GBP242 million was allocated before Sunak called a General Election for July 4.

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BROKER RATING CHANGES

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Jefferies raises Great Portland to 'hold' (underperform) - price target 300 (310) pence

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COMPANIES - FTSE 100

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Halma reported that revenue in the year ended March 31 jumped 10% to GBP2.03 billion from GBP1.85 billion a year earlier. Pretax profit surged 17% to GBP340.3 million from GBP291.5 million. Halma upped its dividend to 21.61p from 20.20p. Chief Executive Marc Ronchetti, said: "We have made a positive start to the new financial year. Our order intake in the year to date is ahead of both revenue and the comparable period last year. We expect to deliver good organic constant currency revenue growth in the year ahead, and an adjusted Ebit margin of around 21%, in the middle of our target range. We remain well positioned to make further progress this year and in the longer term."

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St James's Place named Caroline Waddington as its new chief financial officer. Waddington will succeed Craig Gentle, who will be retiring from the business. She will join St James's Place in the second half of the year, at which point Gentle will step down as director but remain with the company for "a short period to facilitate an orderly handover." Gentle has been with the company since 2016, serving as CFO since 2018. Waddington joins from UBS where she was CFO for the group's UK Credit Suisse entities, as well as chief operating officer for Credit Suisse International. Chair Paul Manduca said: "I am delighted to announce the appointment of Caroline Waddington as SJP's next Chief Financial Officer. Caroline is highly experienced and has proven financial services expertise that she has developed in her career to-date."

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COMPANIES - FTSE 250

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Virgin Money UK reported that pretax profit in the six months ended March 31 rose 18% to GBP279 million from GBP236 million a year earlier. Total income edged up to GBP923 million from GBP914 million. Virgin Money UK declared a 2.0p interim dividend, cut from 3.3p a year earlier. It said it doesn't plan any further dividends or buybacks due to its planned takeover by Nationwide. CEO David Duffy says: "Over the first six months, we have continued to deliver on our strategic ambitions in line with expectations. While we expect there to be headwinds through the second half of the year, we remain well placed to deliver growth in our target segments."

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OTHER COMPANIES

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Deterra Global and Trident Royalties said they have reached an agreement for an all-share cash offer for Trident, a diversified mining royalty company. Trident shareholders will be entitled to receive 49 pence per share, which represents a 23% premium to Trident's closing price of 40.0p on Wednesday. The offer values Trident at GBP144 million. The Trident directors consider the offer to be "fair and reasonable" and intend to recommend shareholders to vote in favour of the takeover.

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PayPoint reported that revenue in the year ended March 31 surged 83% to GBP306.4 million from GBP167.7 million a year earlier. Pretax profit rose 13% to GBP48.2 million from GBP42.6 million. Paypoint paid out a final dividend of 19.2p, up from 18.6p. On the back of the results, PayPoint has announced a three-year share buyback programme. It plans to return at least GBP20 million to shareholders over the next 12 months. CEO Nick Wiles comments: "This has been another year of progress for PayPoint where we have delivered a robust financial performance and made further progress towards delivering GBP100 million Ebitda by the end of FY26. These results reflect both the resilience of our businesses and the transformation delivered over the past three years as we unlock further opportunities and growth across our four business divisions."

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Wise reported that revenue in the year ended March 31 jumped 24% to GBP1.05 billion from GBP846.1 million a year earlier. Pretax profit rose to GBP481.4 million, more than triple GBP146.5 million. Looking ahead, Wise expects 15-20% annual underlying income growth for financial 2025, "driven by customer growth." Co-Founder & CEO Kristo Kaarmann said: "We are investing in infrastructure and customer experiences to serve as much of this huge, under-served cross-border payments market as possible, including starting FY25 by reducing fees further for our customers."

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By Sophie Rose, Alliance News senior reporter

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