(Alliance News) - Stocks in London are set to open higher on Thursday, ahead of the next interest rate call from the European Central Bank, which is widely expected to make its first reduction in nearly five years.
In political news, the election campaign continued, with Chancellor Jeremy Hunt calling on Keir Starmer in The Telegraph to pledge not to increase property tax if Labour wins. Meanwhile, Welsh leader Vaughan Gething vowed not to resign, despite losing a no-confidence vote.
Meanwhile, in corporate news, Mitie saw both revenue and profit rise in the year ended March 31.
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 8,262.40
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Hang Seng: down fractionally at 18,416.93
Nikkei 225: closed up 0.7% at 38,759.83
S&P/ASX 200: closed up 0.7% at 7,822.00
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DJIA: closed up 96.04 points, 0.3%, at 38,807.33
S&P 500: closed up 62.69 points, 1.2%, to 5,354.03
Nasdaq Composite: closed up 330.87 points, 2.0%, at 17,187.92
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EUR: higher at USD1.0888 (USD1.0881)
GBP: higher at USD1.2796 (USD1.2786)
USD: higher at JPY155.86 (JPY154.89)
GOLD: higher at USD2,369.50 per ounce (USD2,322.80)
OIL (Brent): higher at USD78.77 a barrel (USD77.01)
(changes since previous London equities close)
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ECONOMICS
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Thursday's key economic events still to come:
08:30 EDT Canada trade balance
09:30 CEST eurozone construction PMI
11:00 CEST eurozone retail sales
14:15 CEST eurozone ECB interest rate decision
16:15 CEST eurozone ECB President Christine Lagarde speaks
09:30 CEST France construction PMI
11:00 CEST France new car registrations
08:00 CEST Germany factory orders
09:30 CEST Germany construction PMI
11:00 IST Ireland unemployment
09:30 CEST Italy construction PMI
10:00 CEST Italy retail sales
11:00 SAST South Africa current account
09:00 CEST Spain industrial production
07:45 CEST Switzerland unemployment
09:30 BST UK construction PMI
07:30 EDT US challenger job cuts
08:30 EDT US trade balance
08:30 EDT US initial jobless claims
10:30 EDT US EIA natural gas stocks
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The European Central Bank is expected to start cutting interest rates from record highs Thursday, its first reduction in nearly five years, but volatile inflation means the path ahead is uncertain. After an unprecedented streak of eurozone rate hikes beginning in mid-2022 to tame runaway energy and food costs, inflation has been slowly coming down towards the ECB's two-percent target. Rates have been on hold since October, but it is a near certainty the central bank will reduce borrowing costs by a quarter percentage point Thursday, taking its key deposit rate to 3.75%. It will provide a much-needed boost for the beleaguered eurozone economy and be the first cut since September 2019.
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Chancellor Jeremy Hunt has called on Keir Starmer to pledge not to increase property tax if Labour wins the General Election. Hunt, writing for The Telegraph, challenged the Labour leader to match a new Tory pledge not to increase capital gains tax, stamp duty or the number of council tax bands. His comments come after Starmer branded Rishi Sunak a liar and claimed he had broken the ministerial code for suggesting Labour planned to hike taxes by more than GBP2,000. Sunak repeatedly highlighted the allegation during the combative debate with Starmer, claiming "independent Treasury officials" have costed Labour's policies "and they amount to a GBP2,000 tax rise for everyone".
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Wales' leader Vaughan Gething lost a no-confidence vote on Wednesday, less than three months after being elected as first minister in the devolved Welsh administration. The embattled Welsh Labour leader has faced several controversies during his time in office, which also saw the collapse of a coalition between Labour and the Welsh party Plaid Cymru. However, Gething vowed he would not resign despite the vote. But the motion - which was passed with 29 votes for and 27 against in the 60-seat parliament - will add pressure on his already tumultuous time in office.
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Shadow pensions secretary Liz Kendall is taking to the streets of Essex to speak to pensioners. Labour said the Conservatives have worsened the quality of retirement, with the number of over 65s paying income tax nearly doubling since 2009. Ms Kendall is expected to tell pensioners to "look at your wallet, look at the quality of your healthcare and look at the lack of housing for your children and grandchildren and ask yourself, is this as good as it gets?" The Labour candidate is expected to repeat warnings of the Tories' "reckless, unfunded" GBP46 billion tax black hole, which comes with the abolition of national insurance.
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Ireland services expansion accelerated in May, while job growth remained in line with the long-run trend, reported S&P Global. The AIB Services Business Activity Index rose to 55.0 in May from 53.3 in April, signalling a faster increase in Irish service sector activity. The pace of expansion was the strongest since March and broadly in line with the long-run series average since 55.1 in 2000. Technology, Media & Telecoms was the strongest-growing segment at 57.4, having previously been the bottom-ranked sector during March and April. Financial Services ranked second at 56.6.
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The Israeli military said Thursday it had carried out a deadly strike on a UN school in Gaza that it said housed a Hamas compound, with the militant group saying the attack killed at least 27 people. The military said it "eliminated" several "terrorists" after its jets "conducted a precise strike on a Hamas compound embedded inside an UNRWA school in the area of Nuseirat", in central Gaza. UNRWA is the UN agency for Palestinian refugees. Hamas's media office said the strike killed at least 27 people and wounded dozens more, calling it a "horrific massacre... that shames humanity".
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BROKER RATING CHANGES
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JPMorgan cuts B&M European Value Retail price target to 471 (585) pence - 'underweight'
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Deutsche Bank raises Rio Tinto price target to 6200 (6000) pence - 'buy'
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COMPANIES - FTSE 100
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Alphabet looks set for legal troubles, after the UK's Competition Appeal Tribunal greenlit a trial for a multibillion-pound claim against Google for alleged anti-competitiveness in digital advertising. According to AFP, the GBP13.6 billion claim, which was brought by Ad Tech Collective Action, accuses the US tech firm of abusing its dominant position and causing significant losses to UK online publishers. The case centres around ad tech, the system that decides which online adverts people see and how much they cost. At the heart of the Ad Tech Collective Action argument is the claim that Google has abused its position in the market by promoting its own products and services over those of rivals.
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COMPANIES - FTSE 250
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Bridgepoint named Tim Score as its new chair, with effect from July 1, succeeding Founder William Jackson, who will step down at the same time. Jackson will continue to chair Bridgepoint's Private Equity business. Score was formerly deputy chair and senior independent director at Pearson. Outgoing Chair William Jackson said: "I'm delighted that following a Nomination Committee led process, the board has unanimously agreed to appoint Tim Score to the role. Tim takes over as chair with the business enjoying tremendous momentum."
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Mitie posted pretax profit of GBP156.3 million for the year ended March 31, up from GBP105.5 million a year prior. Revenue was GBP4.51 billion, up from GBP4.06 billion, while group revenue came to GBP4.44 billion from GBP3.95 billion. The firm declared a total dividend per share of 4.0 pence, up from 2.9p the year before. Looking ahead, it expects financial 2025 to be another year "of delivery towards medium-term targets", and expects to meet high single digit revenue growth guidance for the year.
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OTHER COMPANIES
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Fevertree celebrated market share gains and "topline growth in the year to date", as it looked ahead to the summer trading period. To date, the firm noted good underlying momentum in Europe, notably in Italy, France and Denmark. It said that the brand continues to grow ahead of the mixer category, with Ginger Beer performing well and Pink Grapefruit gaining good traction. In its 'Rest of the World' region, it expects to deliver strong growth in financial 2024 following the set-up of a new subsidiary model in Australia.
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By Holly Beveridge, Alliance News reporter
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