(Alliance News) - London's FTSE 100 is called to open slightly higher on Thursday, on a day when some impetus is expected to fade from markets due to a US holiday.

"Said conditions are likely to persist into Friday as well, with most US participants enjoying their long weekends to the fullest, meaning subdued trade is likely into the weekend, barring any potential unexpected news flow," Pepperstone analyst Michael Brown commented.

Eyes remain on France where worries over a draft budget have hung over the equity and bond markets.

Far-right leader Marine Le Pen threatened last week to bring down the government if demands to amend the budget were not met.

Barnier warned on Tuesday that if the budget did not go through there would be a "big storm and very serious turbulence on the financial markets", in comments reported by Reuters.

The CAC 40 in Paris is called to open 0.1% higher on Thursday, recovering some lost ground after a 0.7% decline on Wednesday. Insurer AXA, down 4.3% and lender Societe Generale, falling 3.5%, were among the benchmark's worst performers on Wednesday.

SPI Asset Management analyst Stephen Innes commented: "If the political backdrop in France deteriorates further, there's a real risk that French government bonds could plummet into the plunge tank and drag the euro down with them."

In early UK corporate news, Dr Martens said recent trading has been "encouraging", though it reported a swing to half-year loss. Loungers agreed to a GBP338.3 million private equity takeover.

Here is what you need to know at the London market open:

----------

MARKETS

----------

FTSE 100: called up 0.1% at 8,281.55

----------

Hang Seng: down 1.3% at 19,358.87

Nikkei 225: up 0.6% at 38,349.06

S&P/ASX 200: up 0.5% at 8,444.30

----------

DJIA: closed down 138.25 points, 0.3%, at 44,722.06

S&P 500: closed down 0.4% at 5,998.74

Nasdaq Composite: closed down 0.6% at 19,060.48

----------

EUR: lower at USD1.0537 (USD1.0579)

GBP: lower at USD1.2652 (USD1.2687)

USD: higher at JPY151.70 (JPY150.71)

GOLD: lower at USD2,637.13 per ounce (USD2,643.13)

(Brent): lower at USD72.09 a barrel (USD72.79)

(changes since previous London equities close)

----------

ECONOMICS

----------

Thursday's key economic events still to come:

10:00 GMT eurozone consumer confidence

13:00 GMT Germany CPI

11:00 GMT Ireland wholesale prices

11:00 GMT Ireland CPI

11:00 GMT Ireland retail sales

US Thanksgiving Day. Financial markets closed.

----------

The number of cars produced in Britain has fallen for the eighth consecutive month, new figures from the Society of Motor Manufacturers & Traders, SMMT, showed. The trade association found UK factories made 15% fewer cars in October this year than October 2023. It found 670,346 units were produced in the UK between January and October 2024, 11% lower than during the same period in 2023. The drop was primarily due to a fall in exports, the SMMT said. It added that the current market for new cars is weak in the UK and EU, with the EU market rising by just 0.7% between January and October this year.

The number of cars produced for domestic use rose by 5.3% but fell by 15% for exports in the first 10 months of 2024 versus last year – equivalent to 89,095 fewer cars being shipped overseas. The trade association said its new figures came as plants continued "their retooling to enable production of the next generation of zero emission vehicles". Around a third of the cars made in Britain in October this year were battery electric, plug-in hybrid and hybrid electric, it added. Mike Hawes, SMMT chief executive, said: "These are deeply concerning times for the automotive industry, with massive investments in plants and new zero emission products under intense pressure. "Slowdowns in the global market – especially for EVs [electric vehicles] – are impacting production output, with the situation in the UK particularly acute given we have arguably the toughest targets and most accelerated timeline but without the consumer incentives necessary to drive demand."

----------

Consumer confidence was little moved in November as consumers weighed the autumn budget and looked ahead to Christmas, a report showed. According to BRC-Opinium data, consumer expectations over the next three months of their personal financial situation improved slightly to negative 3 in November, up from negative 4 in October. The perception of the state of the economy worsened slightly to negative 19 in November, down from negative 17 in October. Personal spending on retail expectations rose slightly to plus 3 in November, up from plus 2 in October but overall remained at plus 17 in November, the same as in October. Personal saving expectations remained at negative 9 in November, the same as in October. British Retail Consortium Chief Executive Helen Dickinson said: "There was little shift in consumer confidence since the chancellor's budget, with many worried about the economy in the lead-up to Christmas. "While there was a very slight improvement in people's expectations of their personal financial situation, this was offset by declining expectations of the wider economy. Personal retail spending remained positive, edging up slightly, though this was to be expected as consumers prepare for the festive season."

----------

BROKER RATING CHANGES

----------

Exane BNP raises Spirax to 'outperform' - price target 8,200 pence

----------

RBC cuts Cranswick to 'sector perform' (outperform) - price target 4,900 (4,700) - pence

----------

COMPANIES - FTSE 100

----------

Aviva said late Wednesday it had made an approach to buy Direct Line Insurance Group, which was rejected. London-based Aviva said the cash and shares proposal was made last week Tuesday. Direct Line shareholders would be entitled to receive 112.5 pence per share in cash, and 0.282 new Aviva shares per Direct Line share. Based on Aviva's share price on the day before the proposal was submitted, the plan valued Direct Line at 250p per share or around GBP3.26 billion. Aviva said it was a "highly attractive" and "compelling" offer with "high execution certainty", which also met Aviva's strict financial criteria for acquisitions. But Aviva said Direct Line on Tuesday had rejected the proposal as substantially undervaluing Direct Line, and has declined to engage further with Aviva. In a statement, Direct Line, the Bromley, London-based motor and home financial services group, said it had concluded that the plan was "highly opportunistic and substantially undervalued the company." In March, Ageas withdrew a proposed bid for Direct Line after failing to secure the backing of its UK peer. The Belgian insurer had made two proposals to buy Direct Line, but its advances were rejected.

----------

COMPANIES - FTSE 250

----------

Boot maker Dr Martens left its guidance unmoved, and said trading since the start of the autumn-winter period has been "encouraging". In addition, it said new boss Ije Nwokorie will take on the chief executive officer position from early next month. Dr Martens said results for the half-year to September 29 were in line with expectations. Revenue declined 18% on GBP324.6 million from GBP395.8 million, with the firm sinking to a pretax loss of GBP28.7 million from profit of GBP25.8 million. "Our first half performance was in line with expectations and we remain confident in our ability to deliver on our plans and the targets we set for FY25. As we shared in May, this is a year of transition and we have made good progress with our four main objectives: pivot our marketing to a relentless focus on our product, turn around our USA [direct-to-consumer] performance, reduce our operating cost base and strengthen the balance sheet. Our new marketing campaigns are showing encouraging early signs, with strong sales of new product, giving us confidence that we will return USA DTC to positive growth in the second half," outgoing CEO Kenny Wilson said. The firm noted it took "swift action" to keep a lid costs and it expects the benefit of savings for the next financial year to be at the top of a previous GBP20 million to GBP25 million range. Dr Martens added: "Trading since the start of the AW24 season has been encouraging, with all three regions positive, albeit the peak weeks of trading remain ahead of us. Encouragingly, trading has been driven by good DTC sales of new products supported by our new product-led marketing approach." The company cut its dividend by 46% to 0.85 pence from 1.56p, "in line with prior guidance". Back in April, it said Nwokorie would be the next CEO. Nwokorie assumes the position on January 6. Outgoing Wilson added: "The early success of our new product ranges provides a strong foundation as we enter the important peak trading period and as I prepare to hand over the reins to Ije in the new year."

----------

Grocer and warehouse technology provider Ocado Group said supermarket chain Morrisons will "gradually cease deliveries" from a customer fulfilment centre in south-east London "in order to continue building further volumes" from another in the West Midlands. Ocado said its 50%-owned Ocado Retail joint-venture and Morrisons share "fulfilment capacity" at two CFCs, one in Erith, London and another in Dordon, Warwickshire. "We engage actively with both Morrisons and Ocado Retail to support their expansion and development within the online grocery market. This includes strategic discussions on the optimal use of our CFCs to support each partner to achieve their growth ambitions. Following recent discussions, Morrisons will gradually cease deliveries from Ocado's Erith CFC in order to continue building further volumes from Ocado's Dordon CFC, as well as expansion of their store network where online orders are fulfilled using Ocado's AI-powered In-Store Fulfilment solution," Ocado Group explained. "As Ocado Retail continues to grow robustly and approaches full capacity in its current network, this decision now opens an attractive option to provide Ocado Retail with extra network capacity over the near term." Subject to the conclusion of talks with Ocado Retail, 50% owned by Marks & Spencer, Ocado Group expects the developments to have a "broadly neutral" net cash impact over the next financial year and the one after. It wraps up its financial year around early December.

----------

OTHER COMPANIES

----------

THG said it will be eligible for FTSE index inclusion in March with a transfer of its listing category expected to take effect early in January. The e-commerce firm is sizing up changing the listing category to Equity Shares (Commercial Companies), from Equity Shares (Transition) Category. No shareholder backing is needed for the move, which is expected to come into effect on January 6, subject to Financial Conduct Authority approval. "The board believes that the transfer will bring with it a number of benefits to the company and its shareholders," THG said. "FTSE Russell meets on a quarterly basis to review the constituents of the FTSE UK Index Series, incorporating the FTSE 100, FTSE 250 and FTSE SmallCap indices. It is anticipated that, subject to the transfer becoming effective and other conditions being met, the company will be eligible to be considered for inclusion into the FTSE UK Index Series. The company expects to be eligible for acceptance into the FTSE UK Index Series in March 2025."

----------

Loungers backed a roughly GBP340 million takeover offer from private equity firm Fortress Investment Group. Fortress will pay 310 pence in cash for each share in the operator of cafes and bars, giving a GBP338.3 million equity value and a GBP350.5 million enterprise value. It is a 30% premium to the 238p closing price on Wednesday. Shareholders holding just over 40% of Loungers shares have backed the offer. The takeover is expected to become effective in the first quarter of 2025. Loungers Chair Alex Reilley said: "We remain very confident about Loungers' future prospects and the half year results that we announced separately today clearly demonstrate the strong momentum that we have in the business. Loungers has come a long way since we opened our first site in Bristol in 2002, and we are hugely proud of the jobs we've created, the positive impact we've made on the UK's high streets, and the outstanding hospitality our amazing teams have provided since then. We are more ambitious than ever and we see Fortress as being an ideal partner to help us take Loungers into the next phase of its growth journey. We believe that the Acquisition represents a compelling proposition for all of our stakeholders and will allow us to execute our ambitious growth plans even more decisively and effectively." Loungers said pretax profit in the half-year to October 6 shot up 51% on-year to GBP6.0 million from GBP3.9 million. Revenue improved 19% to GBP178.3 million from GBP149.6 million a year prior. "The business has continued to trade well over the first seven weeks of Q3, with like-for-like sales growth of 3.9% (5.1% over the first six weeks to 17 November, which excludes the last week's trading which was impacted by Storm Bert)," it added.

----------

By Eric Cunha, Alliance News news editor

Comments and questions to newsroom@alliancenews.com

Copyright 2024 Alliance News Ltd. All Rights Reserved.