Proactive Investors -
- Blue-chips 32 points lower at 7,898
- ASOS (LON:ASOS), Boohoo (LON:BOOH) agree to clarify green claims
- BP (LON:BP), Shell PLC (LON:SHEL) slip as oil recedes for second day
US markets seen higher
The Dow Jones is due to add 154 points on Wednesday’s opening bell to reach 39,834, following losses on Tuesday which pulled indexes further from all-time highs.
Futures had the S&P 500 and Nasdaq up 19 and 73 points respectively meanwhile, at 5,284 and 18,522.
“A relatively quiet US calendar will likely see traders focus on the ability of equity markets to push through after yesterday’s rebound in durable goods sent stocks lower to the benefit of the US dollar,” Scope Markets analyst Joshua Mahony noted.
This had shown durable goods orders climbing by 1.4% in February following a slump in January, signalling a recovery in business equipment investment.
Given the "short-term period of weakness" since US market’s scraped highs last week, Mahony added previous dips had “typically been viewed as an opportunity to buy”.
“With US markets expected to open in the green, the steady decline seen since Thursday's peak looks like a possible opportunity for the bulls to jump in once again,” he said.
Chinese EVs on course to make up quarter of European market this year
A quarter of all electric vehicles sold in Europe this year are set to be Chinese-made, industry organisation Transport & Environment has said.
Following a near-one-fifth market share last year, this is set to grow still over the course of 2024, according to the group.
Though this accounts for Tesla Inc (NASDAQ:TSLA), Dacia and BMW AG (ETR:BMWG) models produced in China, domestic brands such as BYD are set to make up 11% of sales this year, stretching to 20% in 2027.
This comes as the European Union mulls introducing import tariffs to work against subsidies offered to manufacturers in China.
“Tariffs will force carmakers to localise EV production in Europe, and that’s a good thing because we want these jobs and skills,” Transport & Environment senior director Julia Poliscanova commented.
“But tariffs won’t shield legacy carmakers for long. Chinese companies will build factories in Europe and when that happens our car industry needs to be ready.”
Such a tariff would stem from concerns that subsidies offered by China undercut European-made models, with the group noting a 25% tax would make the former more expensive than their European counterparts.
“It is crucial that a higher tariff is accompanied by a regulatory push to increase production of EVs, including electrification targets for company car fleets by 2030 - on top of the agreed 100pc clean car goal in 2035,” Transport & Environment added.
German economy to stagnate this year - think tanks
Germany’s economic growth will likely remain muted throughout this year as inflation, high interest and weak exports continue to bite, economists have warned.
Europe’s largest economy could expand by just 0.1% over the course of 2024 as a result, a group of five think tanks said on Wednesday, compared to initial anticipations for 1.3%.
“Cyclical and structural factors are overlapping in the sluggish overall economic development,” Kiel Institute for the World Economy head Stefan Kooths said.
“Although a recovery is likely to set in from the spring, the overall momentum will not be too strong.”
German gross domestic product (GDP) sank by 0.3% over the course of 2023, with the figure contracting by 0.2% over the final three months of the year... Read more
BP among fallers as FTSE 100 slips
BP PLC emerged as one of the leading fallers on the FTSE 100 as the index shed 20 points to sit at 7,910 on Wednesday morning.
Coinciding with a second consecutive daily fall in oil prices, on the back of data showing US crude stockpiles increased, BP slipped 1.8% to 490.95p.
Flutter Entertainment PLC (LON:FLTRF) and Ocado Group PLC (LON:OCDO) dipped 3% and 2.1% to lead the fallers in the meantime, backtracking on gains seen following reports earlier in the week.
Among risers, Diploma PLC (LON:DPLM) topped the list with gains of 10.9% after striking a £236 million deal to acquire US-based Peerless Aerospace Fastener.
DS Smith PLC (LON:SMDS) also enjoyed hefty gains of 7.5% following confirmation on Tuesday night that it evening that it was in talks about being bought by rival International Paper Co.
British Gas doubles chief executive’s pay
British Gas owner Centrica PLC (LON:CNA) almost doubled chief executive Chris O’Shea’s pay packet last year, from £4.5 million to £8.2 million.
Driven largely share price-linked bonuses, the increase comes after British Gas enjoyed a tenfold increase in profit to £750 million by charging people more in bills under allowances in Ofgem’s energy price.
Centrica remuneration committee chair Carol Arrowsmith said the pay was based on previously agreed terms and pointed out the firm needed to attract high-performing leaders.
“The structure of the package was approved by our shareholders, and it is consistent with similar companies,” she added.
O’Shea himself said “you can't justify a salary of that size” while households continue to struggle with energy bills in the UK during an interview in January.