6th Nov 2018 08:40
LONDON (Alliance News) - Stocks in London opened marginally lower on Tuesday as investors await the start of the midterm elections in the US, while gains by DS Smith, Associated British Foods and Imperial Brands were not enough to boost the FTSE 100, as Wm Morrison Supermarkets provided drag. Across the pond, the hotly contested midterm elections will determine control of Congress and measure the strength of Democratic opposition to US President Donald Trump.The FTSE 100 was down 0.1%, or 10.26 points at 7,093.58. The FTSE 250 was down 7.98 points at 19,055.73, while the AIM All-Share was up 0.1% at 992.12.The Cboe UK 100 was down 0.3% at 12,035.45, the Cboe UK 250 was 0.1% lower at 17,264.62. The Cboe UK Small Companies was flat at 11,685.82.In mainland Europe, the CAC 40 in Paris was up 0.1% and the DAX 30 in Frankfurt was up 0.3%.On the London Stock Exchange, DS Smith was up 4.0% after the recycled packaging firm said it traded in line with expectations in the first half of its financial year as industry and business trends remained consistent with the prior quarter.DS Smith expects adjusted operating profit and the return on sales for the six months to the end of October to be "materially ahead" of the year before. Adjusted operating profit in the prior year was GBP251 million, while return on sales was at 9.0%.The improved performance has been attributed to the recovery of increased input costs earlier in the year and volume growth in the group's Fast Moving Consumer Goods business.Imperial Brands was up 3.5% after the tobacco company said financial 2018 was a "successful year", with strong financial delivery, revenue and earnings growth, high cash generation and a dividend increase. For the year that ended in September, revenue rose 0.9% to GBP30.52 billion from GBP30.25 billion last year. On an adjusted basis, pretax profit increased 1.8% to GBP3.32 billion from GBP3.26 billion the year before. This beat the company-supplied consensus which had estimated adjusted pretax profit at GBP3.28 billion. Adjusted operating profit at group level was broadly flat at GBP3.77 billion from GBP3.76 billion last year, but higher than the company-supplied consensus estimate of GBP3.72 billion. Imperial Brands declared an annual dividend of 187.8 pence, up 10% from 170.70p last year. This maintains the company's record over recent years of increasing the dividend yearly by at least 10%.In its new 2019 financial year, Imperial Brands expects to deliver constant currency revenue growth at, or over, the upper end of its 1% to 4% estimate.Associated British Foods was up 2.4% after the Primark owner and sugar producer hiked its dividend by 10% despite reporting a drop in annual profit due to one-off items and poor results from sugar. For the financial year that ended September 15, AB Food's pretax profit fell 18% to GBP1.28 billion from GBP1.58 billion a year ago, as the company incurred a GBP34 million loss on sale and closure of businesses compared to a GBP293 million profit on such items the year before. Although on an adjusted basis, pretax profit increased 5% to GBP1.37 billion. Meanwhile, the company's revenue also increased 1.4% to GBP15.57 billion from GBP15.36 billion a year ago.By division, the AB Foods Retail unit, comprised of low-cost fashion chain Primark, "delivered its most significant profit growth in recent years", with adjusted operating profit up 15% to GBP843 million from GBP735 million and revenue up 6.1% to GBP7.48 billion from GBP7.05 billion.The company lifted its full-year dividend by 10% to 45 pence per share after proposing a 33.3p final payout for the year. At the other end of the large cap index, WM Morrison Supermarkets was the worst performer, down 3.8% after the supermarket chain said sales growth slowed on a quarter-on-quarter basis in the third quarter due to the absence of favourable warm weather and the football World Cup, both of which benefited the second quarter.The supermarket chain's like-for-like sales, excluding fuel, rose 5.6% for 13 weeks to November 4, with retail rising 1.3% and wholesale 4.3%. Same-store sales, excluding fuel, were up 6.3% in the second quarter of the current financial year and were up 3.6% in the first quarter. Same-store sales had grown by 2.5% in the third quarter of financial 2018.Total sales for the recent third quarter were up 6.0%, excluding fuel, and up 6.4% including fuel.The pound was firm against the dollar quoted at USD1.3080, up against USD1.3022 at the London equities close Monday.In UK economic data, the "all-important golden quarter" for retail sales has got off to a fairly flat start as cautious consumer spending continues in the UK into the final three months of 2018, a report has found.October marked the start of the golden quarter - the last three months of the year when some retailers earn the majority of their profits as shoppers stock up for Christmas.But the British Retail Consortium-KPMG retail sales monitor found that in October, total retail sales increased by 1.3% year-on-year across the UK. On a like-for-like basis, retail sales increased by 0.1% from October 2017.Ahead, UK Prime Minister Theresa May faces her Cabinet on Tuesday after Dublin insisted it would not accept any unilateral UK ability to end a Brexit backstop agreement on the Irish border.May is understood to be seeking an opt-out to dampen hardline Conservative and DUP concerns over plans for the whole of the UK to remain temporarily in a customs union with the EU after Brexit in order to avoid a hard border in Ireland.The Japanese Nikkei 225 index closed up 1.1%. In China, the Shanghai Composite closed down 0.2%, while the Hang Seng index in Hong Kong closed up 0.5%.In the US on Monday, Wall Street ended broadly higher, with the Dow Jones Industrial Average up 0.8% and S&P 500 up 0.6%, though the Nasdaq Composite closed 0.4% lower.Voters in the US will head to the polls on Tuesday for the highly anticipated midterm elections, which will decide control of both the House and Senate.All 435 seats in the US House of Representatives are up for re-election. A total of 35 US Senate seats out of the 100 total are in play, as well as almost 40 out of 50 state governor positions and the balance of power in virtually every state chamber.US President Trump's Republican party currently holds a monopoly in Washington. Should Democrats win control of the House of Representatives, as strategists in both parties suggest is likely, they could derail Trump's legislative agenda for the next two years."With the Democrats favourites to take control of the House and the Republicans the Senate, the next couple of years may be far more difficult for Trump. When you consider how markets have done since his election victory - granted, primarily on the back of tax reforms - it's easy to see why this may not be the most investor-friendly result," said Oanda senior market analyst Craig Erlam.In the economic events calendar there are services PMI readings from Italy, France, Germany and eurozone at 0845 GMT, 0850 GMT, 0855 GMT and 0900 GMT respectively. There is also eurozone producer prices at 1000 GMT.The pound was firm against the dollar quoted at USD1.3064, up against USD1.3022 at the London equities close Monday.UK Prime Minister Theresa May faces her Cabinet on Tuesday after Dublin insisted it would not accept any unilateral UK ability to end a Brexit backstop agreement on the Irish border.The meeting of senior ministers comes after Justice Secretary David Gauke said a no-deal EU exit would be "very bad" for the UK economy. May is understood to be seeking an opt-out to dampen hardline Conservative and DUP concerns over plans for the whole of the UK to remain temporarily in a customs union with the EU after Brexit in order to avoid a hard border in Ireland.Remain would win a new Brexit poll by 54% to 46%, according to analysis of one of the largest surveys carried out on the issue. Some 20,000 people were questioned in a Survation poll for Channel 4 which estimated 105 local authority areas that voted Leave in 2016 would now be carried by the Remain side.The euro was firm against the dollar quoted at USD1.1419 compared to USD1.1401 late Monday.In the latest developments regarding the Italy's face-off with Brussels, eurozone finance ministers have called on the country to overhaul its 2019 spending plans, with neither Brussels nor Rome showing signs of backing down in what has become a major EU row. Italy's big-spending budget, which was rejected last month by the European Commission for not complying with budgetary rules, has roiled markets. Yet the country's populist government is so far refusing to yield to pressure. Following a meeting to discuss the budgets of eurozone member states on Monday, the finance ministers said they agreed with the commission's decision. Italy faces a deadline of November 13 to submit a new budget. The commission will then decide on November 21 whether to accept the revisions. Ultimately, if Rome is found in breach, it could face fines - an unprecedented move for Brussels.
Related Shares:
Smith (DS)MRW.LAB FoodsImperial Brands