(Alliance News) - Stocks in London were set to open slightly higher on Tuesday as unrest in the world's second largest economy continued.

China's major cities of Beijing and Shanghai were blanketed with security in the wake of nationwide rallies calling for political freedoms and an end to Covid lockdowns.

The country's leadership is facing a wave of protest not seen in decades, fuelled by anger over the unrelenting lockdowns as well as deep-rooted frustrations over China's political direction. And with police cars, foot patrols, a network of surveillance cameras, and aided by the icy wind, Beijing authorities also appeared to have deterred fresh gatherings.

In semi-autonomous Hong Kong, however, where mass democracy protests erupted in 2019, dozens gathered at the Chinese University to mourn the victims of the Urumqi fire. The demonstrators said Covid restrictions were to blame for hampering rescue efforts of the deadly fire.

China on Tuesday said it will speed up a push to vaccinate people aged 60 and older against Covid-19 after the country posted record daily case numbers in recent days.

Beijing's National Health Commission pledged to "accelerate the increase in the vaccination rate for people over the age of 80, and continue to increase the vaccination rate for people aged 60-79", adding it would "establish a special working group...to make special arrangements for the vaccination of the elderly against Covid".

Bloomberg reported on Monday that Apple will suffer an iPhone production shortfall of six million units due to turmoil at a key facility in China.

Bloomberg, citing a personal familiar with assembly operations, said the outcome will depend on how fast Foxconn Technology can get workers back to production lines after a wave of Covid-19 curb protests.

Foxconn assembles iPhones at a facility in Zhengzhou, China. Apple shares closed down 2.6% on Monday.

Hawkish words from St Louis Federal Reserve President James Bullard also pushed US markets lower and stalled the strength of the US dollar despite the risk-off sentiment.

James Bullard said markets are underestimating the chances that US central bankers may enact more chunky rate hikes next year to tame inflation, Bloomberg reported on Monday.

Bullard affirmed that he believes the Federal Reserve will need to lift the federal funds rate to at least the bottom of a 5% to 7% range. The benchmark rate is currently 3.75% to 4.00%.

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

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MARKETS

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FTSE 100: called up 28.78 points, or 0.4%, at 7,502.80

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Hang Seng: up 3.5% at 17,902.85

Nikkei 225: closed down 0.5% at 28,027.84

S&P/ASX 200: closed up 0.3% at 7,253.30

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DJIA: closed down 497.57 points, or 1.5%, at 33,849.46

S&P 500: closed down 1.5% at 3,963.94

Nasdaq Composite: closed down 1.6% at 11,049.50

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EUR: lower at USD1.0368 (USD1.0377)

GBP: lower at USD1.1996 (USD1.2025)

USD: lower at JPY138.40 (JPY138.89)

Gold: higher at USD1,753.88 per ounce (USD1,743.16)

Oil (Brent): higher at USD85.54 a barrel (USD82.84)

(changes since previous London equities close)

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ECONOMICS

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Tuesday's key economic events still to come:

11:00 CET EU economic sentiment indicator

14:00 CET Germany provisional consumer price index

10:00 CET Italy industrial turnover  

11:00 CET Italy producer price index

09:00 CET Spain flash estimate CPI

09:00 CET Switzerland gross domestic product

08:55 EST US Johnson Redbook retail sales index

09:00 EST US house price index

10:00 EST US consumer confidence index

16:30 EST US API weekly statistical bulletin

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European Parliament and EU member states negotiators have agreed to tighten rules for products sold online to better protect consumers. Online retailers as well as companies in the supply chain are to carry more responsibility for the products sold online, according to a "provisional political agreement" reached late on Monday. The aim, among other things, is for harmful products to be recalled as quickly as possible in the future. This concerns products, for example, that are sold by online retailers like Amazon in the EU but delivered from a non-EU country. "As a result, products that do not meet our safety standards end up in the [EU's] internal market," said Anna Cavazzini, chair of the Committee on the Internal Market and Consumer Protection in the European Parliament.

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BROKER RATING CHANGES

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Berenberg raises LondonMetric Property to 'hold' ('sell') - price target 185 (200) pence

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Berenberg cuts boohoo to 'hold' ('buy') - price target 45 (140) pence

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Jefferies raises Barclays price target to 318 (299) pence - 'buy'

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COMPANIES - FTSE 100

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Pharmaceutical firm AstraZeneca agreed to acquire Neogene Therapeutics Inc, a clinical stage biotechnology company focused on the discovery, development and manufacturing of T-cell receptor therapies for the treatment of cancer. AstraZeneca said it will pay up to USD320 million. This will include an initial cash payment of USD200 million upon closing and a further USD120 million, contingent on the meeting of unspecified milestones. Neogene will operate as a wholly-owned subsidiary of AstraZeneca, with operations in Amsterdam and California. The transaction is expected to close in the first quarter of 2023, and does not impact the firm's financial guidance for 2022. FTSE 250-listed healthcare sector investor Syncona, which holds an 8% stake in Neogene, said it will receive USD16 million from Astra's initial payment.

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COMPANIES - FTSE 250

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easyJet reported a "record bounce back" in the year ended September 30, with a sharp rise in annual revenue and a significantly narrowed loss. The low-cost airline's pretax loss narrowed to GBP208 million from GBP1.04 billion the previous year, as revenue multiplied to GBP5.77 billion from GBP1.46 billion the year prior. easyJet credited the relaxation of pandemic restrictions and an increase in ancillary products for the revenue rise. Passengers in the year totalled 69.7 million with an 85.5% load factor, compared to just 20.4 million with a 72.5% load factor the previous year. easyJet expects load factor to improve another 10 percentage points in the first quarter of financial 2023. It said Easter ticket yields are showing strength compared to 2022's. easyJet did not declare a dividend.

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London-focused real estate investment trust Shaftesbury reported a "rapid" rebound in the West End of London's economy as Covid-related disruption receded and everyday activity returned to normality. In the financial year that ended September 30, the firm swung to a pretax profit of GBP119.1 million from a loss of GBP194.9 million. Rental income rose to GBP110.4 million from GBP105.0 million, as net property income rose to GBP82.8 million from GBP64.7 million. In the recent year, Shaftesbury recorded a valuation surplus of GBP100.4 million compared to a deficit of GBP196.8 million a year prior. it reported rent collection had returned to its pre-pandemic level at 99%. Shaftesbury declared a total payout of 9.9 pence, up 55% against the year prior.

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OTHER COMPANIES

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Treatt, an ingredient supplier for the beverage, flavour and fragrance industry, announced a rise in annual revenue but a fall in profit amid negative impacts from Covid restrictions in China, volatile currency movements, and cost inflation. In the financial year that ended September 30, Treatt reported a pretax profit of GBP16.2 million, down from GBP19.6 million the previous year. Cost of sales jumped to GBP101.1 million from GBP82.1 million, offsetting revenue which grew to GBP140.2 million from GBP124.3 million. Treatt noted sales growth across all its categories expect hard tea. It proposed a total dividend of 7.85 pence per share, up 4.7% against the previous year.

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By Heather Rydings; heatherrydings@alliancenews.com

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