TOP NEWS SUMMARY: Quarterly UK GDP Gains 1.3% In Line With Forecasts

LONDON (Alliance News) - The following is a summary of top news stories ...

Alliance News 10 August, 2018 | 11:10AM
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LONDON (Alliance News) - The following is a summary of top news stories Friday.
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COMPANIES
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Sports Direct International has acquired 169-year-old British department store chain House of Fraser for GBP90 million in cash, saving around 17,000 jobs. The sports clothing and equipment retailer will buy the business and assets of House of Fraser from administrator Ernst & Young of the company's main operating units - House of Fraser Ltd, House of Fraser (Stores) Ltd and James Beattie Ltd. Under the deal, Sports Direct has acquired the House of Fraser brand, all of its UK stores and all of the stock in the business. This came after House of Fraser was plunged into crisis following C.banner, the Chinese owner of Hamleys, pulling its investment into the troubled retail chain. C.banner was planning to buy a 51% stake in House of Fraser and plough GBP70 million into the ailing retailer, but scrapped the move last week.
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Nationwide Building Society said the absence of a one-off disposal gain, competitive market conditions and a continuing trend of borrowers switching to lower priced products resulted in a year-on-year drop in first quarter profit. The unlisted British mutual financial institution also that its full year outlook remains unchanged and that the UK economy is expected to grow at a modest pace over the next 12 months. Nationwide, the largest building society in the UK, recorded statutory pretax profit of GBP281 million for the three months to June-end, down from GBP322 million recorded a year ago, which included an exceptional gain of GBP26 million from disposal of payment systems provider VocaLink.
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The biggest industrial action by pilots in Ryanair's history got under way on Friday, with nearly 400 flights across Europe cancelled due to the 24-hour stoppage. The cancellations constitute about a sixth of the Irish budget airline's 2,400 scheduled flights on Friday, affecting some 55,000 passengers at the peak of the European holiday season. Pilots and crew are seeking new contracts that include better pay and working conditions. In a statement late Thursday, Ryanair said it had taken "every step to minimize the disruption." It called the strike "regrettable and unjustified" and called on unions to continue negotiations. Ryanair has only recognized pilots unions since last year, taking the step during negotiations to ward off a previous threat of strikes.
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News Corp, the publishing company owned by media baron Rupert Murdoch, reported that its fourth quarter earnings trumped Wall Street estimates, as revenue surged nearly 30% and surpassed expectations. The New York-based media company reported a fourth-quarter loss of USD372 million or USD0.64 per share, compare to last year's loss of USD430 million or USD0.74 per share. Adjusted earnings were USD45 million or USD0.08 per share, down from USD65 million or USD0.11 per share. Analysts polled by Thomson Reuters expected earnings of USD0.06 per share. Revenue for the quarter rose to 29% to USD2.69 billion from USD2.08 billion last year. Analysts had a consensus revenue estimate of USD2.68 billion.
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MARKETS
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Stocks in London were lower with Evraz the worst performer in the FTSE 100, while the pound traded around its worst levels since August last year despite the latest UK GDP reading coming in in line with expectations. Ahead, focus is on the US consumer price index at 1330 BST. Before the data, Wall Street was pointed to a lower open with the Dow Jones called down 0.4%.
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FTSE 100: down 0.6% at 7,693.82
FTSE 250: down 0.3% at 20,740.62
AIM ALL-SHARE: down 0.1% at 1,088.28

GBP: down at USD1.2782 (USD1.2873)
EUR: down at USD1.1469 (USD1.1573)

GOLD: soft at USD1,210.30 per ounce (USD1,213.90)
OIL (Brent): flat at USD72.14 a barrel (USD72.15)

(changes since previous London equities close)
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ECONOMICS AND GENERAL
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UK economic growth doubled in the second quarter driven by stronger growth in both services and construction sectors, first quarterly estimate from the Office for National Statistics showed. Gross domestic product rose 0.4%, faster than the 0.2% expansion seen in the first quarter. The rate came in line with expectations. The dominant services output expanded 0.5%, and construction logged a quarterly growth of 0.9%. However, production dropped 0.8%. On a yearly basis, UK GDP advanced 1.3% versus 1.2% growth seen a quarter ago.
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The Japanese economy expanded at an annualized rate of 1.9% in the April-to-June quarter, for the first growth in two quarters amid a recovery in business spending and private consumption, the government said Friday. The reading beat the 1.3% growth forecast by analysts polled by the Nikkei business daily and followed a 0.6% contraction in the previous three months. Moderate growth was seen in corporate investment in the April-to-June period, which rose 1.3%, following a 0.5% increase in the previous quarter. GDP private consumption was up 0.7% on quarter, topping forecasts for 0.2% after easing 0.1% in the three months prior.
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Senior Zimbabwean opposition politician Tendai Biti was charged with inciting violence and released on bail on Thursday, with the country still on edge following a disputed election and violent protests. "Tendai Biti was released earlier today following my intervention," said Zimbabwean President Emmerson Mnangagwa, who won the elections on July 30. "No one is above the law," he added on Twitter. "Thus due to the serious nature of the allegations of incitement, due process will continue." Biti fled to neighbouring Zambia on Wednesday after Zimbabwean police indicated that they wanted to question him over post-election violence that saw soldiers use live bullets to disperse opposition protestors, killing six.
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By Safiya Shariff; safiyashariff@alliancenews.com

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