(Alliance News) - Stocks in London are called higher on Friday, as investors consider the week's central bank decisions, with the latest coming from Japan.
The Bank of Japan said it would maintain its long-standing, ultra-loose monetary policy as it looks to boost economic growth.
It left its negative interest rate in place and did not adjust its yield curve control, a way of controlling long-term interest rates.
While expected, the decision has left investors and traders "increasingly scratching their heads" as to why the BoJ isn't considering paring back its loose policy, CMC Markets analyst Michael Hewson commented, especially given inflation recently hit its highest level since the 1980s.
Meanwhile, in early UK company news, Tesco reaffirmed annual guidance, as sales grew in its first quarter. ITV confirmed media reports it was looking at buying production group All3Media. Currys said it was considering selling off its Greek operations.
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 13.2 points, 0.2%, at 7,641.46
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Hang Seng: up 1.4% at 20,114.97
Nikkei 225: closed up 0.7% at 33,725.28
S&P/ASX 200: closed up 1.1% at 7,251.20
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DJIA: closed up 428.73 points, or 1.3%, at 34,408.06
S&P 500: closed up 1.2% at 4,425.84
Nasdaq Composite: closed up 1.2% at 13,782.82
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EUR: up at USD1.0943 (USD1.0930)
GBP: up at USD1.2788 (USD1.2759)
USD: up at JPY140.72 (JPY140.52)
GOLD: up at USD1,957.53 per ounce (USD1,955.88)
OIL (Brent): up at USD75.53 a barrel (USD74.81)
(changes since previous London equities close)
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ECONOMICS
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Friday's key economic events still to come:
11:00 CEST EU labour cost index
11:00 CEST EU CPI
09:30 BST UK BoE and Ipsos inflation attitudes survey
09:30 BST UK BoE statistics on banks' external claims
10:00 EDT US University of Michigan survey of consumers
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UK Prime Minister Rishi Sunak will face a test of his leadership in two by-elections on July 20 caused by Boris Johnson and an ally. The former prime minister quit his Uxbridge & South Ruislip seat to avoid the judgment of the Privileges Committee. The cross-party panel subsequently recommended he should have faced a 90-day suspension for deliberately misleading MPs over partygate and his conduct in attacking the committee. Another contest will be held in Selby and Ainsty, triggered by Nigel Adams who quit as a Conservative MP after being denied a peerage in Johnson's resignation honours list. The fallout from a scathing report which found Johnson lied to MPs over partygate has left UK PM Sunak with a battle to hold his warring Tory party together. The Commons will vote on Monday on the Privileges Committee's report, which recommended that Johnson should have faced a 90-day suspension had he not already resigned in advance of its judgment and be banned from holding a pass to access Parliament. MPs will be given a free vote, but allies of Johnson warned Tories they could face battles with their local parties to remain as candidates at the next election if they back the motion.
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Former UK prime minister Liz Truss conceded to "mistakes" over her disastrous short-lived tenure last year – but blamed the economic "establishment" for torpedoing her policies. The ex-Conservative leader issued guarded regrets in her first broadcast TV interview since she was ousted in October after just 49 days. "Whilst I did what I could to deliver my policies, I also recognise I made mistakes as well," Truss told a sympathetic audience during a live question-and-answer session on the right-wing channel GB News. "And I wasn't as ready as I should have been. And I wasn't prepared for some of the onslaught and brickbats that I got," she added.
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BROKER RATING CHANGES
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Jefferies cuts Jadestone Energy price target to 50 (85) pence - 'buy'
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Barclays raises Shell price target to 3,500 (3,300) pence - 'overweight'
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COMPANIES - FTSE 100
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Tesco said it seeing signs that inflation is easing in the grocery market, and the supermarket chain backed annual guidance as it kicked off its financial year with a sales hike. Tesco said revenue in the 13 weeks to May 27, its first-quarter, rose 9.4% to GBP15.17 billion. The measures excludes both VAT and fuel, but includes Tesco Bank. In the UK & Ireland alone, sales were up 9.5% to GBP13.79 billion. In Central Europe, they improved 7.9% to GBP1.04 billion. In the Booker wholesale arm, they increased 8.1% to GBP2.28 billion. Tesco Bank sales improved 14% to GBP334 million. Looking ahead, Tesco said it still expects retail free cash flow within its GBP1.4 billion to GBP1.8 billion target range. At best, this would be a 16% fall from GBP2.13 billion in financial 2023. It still expects a "broadly flat level" of retail adjusted operating profit. Retail adjusted operating profit fell 6.1% to GBP2.49 billion from GBP2.65 billion in financial 2023. Chief Executive Ken Murphy said: "We are very conscious that many of our customers continue to face significant cost-of-living pressures and we have led the way in cutting prices on everyday essential items. There are encouraging early signs that inflation is starting to ease across the market and we will keep working tirelessly to ensure customers receive the best possible value at Tesco."
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Glencore said it has closed the sale of its 100% interest in Cobar Management, which owns the Cobar copper mine in New South Wales, Australia. The miner received USD775 million in cash from Metals Acquisition Corp, and also took USD100 million worth of shares in MAC, now holding just shy of a 21% stake. A further USD75 million deferred payment is due to be paid within the next year, with a possible USD150 million contingent payment, which will depend upon future prices of copper. "The sale of CSA Mine is consistent with delivering our strategy of simplifying and aligning our global portfolio to focus on lower-cost, long-life assets," Glencore said.
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COMPANIES - FTSE 250
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Media company and broadcaster ITV confirmed a Reuters report from Thursday that it is considering an acquisition of production group All3Media. All3Media is jointly owned by Warner Bros Discovery and Liberty Global. According to Reuters sources, ITV is considering combining the business with its Studios unit, and Liberty Global could possibly retain a stake. As well as jointly-owning All3Media, Liberty Global has a roughly 9.9% stake in ITV. Reuters had previously reported All3Media, which produces Fleabag and Midsomer Murders, could fetch a price tag over GBP1 billion. "There can be no certainty as to whether any transaction will take place, nor as to the terms of any such transaction," ITV said on Friday.
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Electronics retailer Currys said it was beginning a strategic review for its Greek business Kotsovolos, which could potentially result in a sale of the business. "The board regularly reviews the group structure through the lens of driving shareholder value and believes that the strength of the Kotsovolos brand, the long-term track record of profitable delivery and leading market position are not currently reflected in the group's valuation," Currys explained. The company said the decision comes in light of the "robust" outlook for Greece's economy, and the business's future growth opportunities.
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OTHER COMPANIES
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Cellular agriculture company Agronomics noted that Californian company Upside Food has become the first cell-cultivated meat firm in the world to receive label approval from the US Department of Agriculture. "This clearly indicates the positive direction of travel for our industry, and we are confident that cultivated meat products will soon be on US shelves," said Agronomics Co-Founder & Executive Director Jim Mellon. The US approval will also pave the way for approvals for cellular food products jurisdictions elsewhere, he added.
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Marlowe is mulling a sale of a division, which could net it GBP650 million worth of proceeds, Sky News reported on Friday. The software and service provider is working on a strategic review of its testing, inspection and certification division.
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By Elizabeth Winter, Alliance News senior markets reporter
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