FTSE 100 slips
The FTSE 100 is down 0.4% this morning.
The economic calendar is quiet today, particularly as US stock markets are closed for the Juneteenth holiday. European Central Bank members Philip Lane, Isabel Schnabel and Luis de Guindos will be speaking at different events today. The light calendar is putting geopolitics under the spotlight as US secretary of state Anthony Blinken completes his visit to China.
The main event for UK traders this week is the Bank of England interest rate decision on Thursday, with inflation data out the day before on Wednesday. The BoE is expected to hike rates again. Central bank action is a key theme this week considering China will make its decision on prime loan rates tomorrow and Federal Reserve chair Jerome Powell will testify before lawmakers on Wednesday and Thursday.
FTSE 100 analysis: Where next for the UK 100?
The UK 100, which tracks the FTSE 100, has drifted between a ceiling of 7,650 and the June-low of 7,452 this month and we are waiting for the index to break out of this range to decide where it is headed next.
The index tested the upper end of that range on Friday, with the long upper wick suggesting appetite was tested. It would need to make a sustained move above here in order to climb toward 7,710, marking the level of support that held throughout most of May.
On the downside, we have seen signs that 7,573 is emerging as a new level of support over the past week, which may hold the index up if it comes under pressure before the June-low comes back into play.
Top UK stock news
The latest FTSE index review takes effect today, with IMI joining the FTSE 100 and replacing British Land. IMI is up 0.6% today while British Land is down 1.1%. Meanwhile, we will see Capita, Empiric Student Property, ME Group International, North Atlantic Smaller Cos Investment Trust and Tyman all join the FTSE 250, replacing ASOS, Capricorn Energy, Huntinh, Tullow Oil and Videndum.
AstraZeneca is down 0.4% in early trade. The pharmaceutical giant has drawn up plans to separate its business in China and spin it off through its own listing in Hong Kong or Shanghai as a way to shelter it from mounting geopolitical tensions, the Financial Times reported over the weekend. Unnamed sources said the idea has been on the table for years but that there was no guarantee a separation will take place. AstraZeneca is expected to retain control of the business if it goes ahead with the plan.
Coca-Cola HBC is down 2.4% after announcing it has agreed to buy Brown-Forman Finland Oy, the owner of the Finlandia vodka brand, for $220 million. The deal is expected to close in the second half of 2023 if it can clear the regulatory hurdles. Around 2.7 million nine litre cases are sold of Finlandia annually. Coca-Cola HBC has been distributing Finlandia and other premium spirits for over 17 years.
Spectris is down 0.4% and has agreed to buy MicroStrain Sensing Systems Business for $37.6 million, equal to £29.4 million. The company makes inertial and wireless sensing systems for the industrial and aerospace markets. MicroStrain made revenue of $15.4 million in the year to the end of June 2022. It will be folded into Spectris Dynamics.
London housebuilders such as Berkeley Group are on the radar today after a survey out from property portal Rightmove showed asking prices in the capital slid 1.6% in June compared to May, whilst prices everywhere else stayed broadly flat. Other stocks including Taylor Wimpey and Barratt Developments may also move on the news.
Bellway has launched the second tranche of its share buyback programme, which will see it repurchase up to £50 million worth of stock. The first tranche was completed last week and saw Bellway buy over 2.1 million shares for around £50 million. The second tranche should be completed by November 16.
Oil giants like BP and Shell are likely to react to the drop in oil prices, with Brent down 0.7% this morning after seeing a rally late last week. BP is down 0.5% while Shell is trading 0.3% lower.
Iron ore miner Rio Tinto is down 1.2% after it said around 30 wagons of a self-driving train were derailed over the weekend, according to an email sent to Reuters. The miner is trying to recover the loaded wagons.
British American Tobacco is down 0.8% this morning after shaking-up its management following the appointment of new chief executive Tadeu Marroco last month. John Vandermeulen will take up the new role of chief operating officer at the start of July. Paul McCrory will take up the role on the board as director of corporate and regulatory affairs while James Barrett has also been promoted to the board as director of business development, both from the start of September.
Kainos Group CEO Brendan Mooney has agreed to complete his term by the end of September 2023, when current digital services director Russell Sloan will become CEO. Sloan has been with Kainos since 1999. The stock is down 2.5% today.
Energean is down 1.8% this morning after it said its subsidiary plans to offer $650 million of senior secured notes that will mature in 2033, with proceeds being used to repay its existing $625 million, 4.5% senior secured notes that are due in 2024.
NextEnergy Solar Fund is up 0.8% after it raised its total dividend for the year to the end of March to 7.52p from the 7.16p payout made the year before, and said it is aiming to grow this another 11% in the new financial year to 8.35p. That came as it reported a net asset value of 114.3p per share, up from 113.5p the year before. Annual EPS dropped to 8.2p from 21.7p.
Firstgroup has been upgraded to Buy from Hold by HSBC, which has a price target of 155p on the travel operator. The stock is up 2.6% at 139.80p in early trade today.
