10th Apr 2019 08:43
LONDON (Alliance News) - London stocks were cautiously higher early Wednesday ahead of several key events, including the European Central Bank's latest policy decision and an emergency Brexit summit in Brussels. Meanwhile, Tesco was helping the FTSE 100 higher after a well-received set of annual results, while the FTSE 250 traded in the green despite a significant drag from drugmaker Indivior as it faced a US indictment. The FTSE 100 was up 4.32 points, or 0.1%, at 7,429.89 early Wednesday. The FTSE 250 was up 19.97 points, or 0.1%, at 19,453.73, while the AIM All-Share was down 0.1% at 926.88.The Cboe UK 100 index was down 0.1% at 12,606.81. The Cboe UK 250 was flat at 17,356.62, and the Cboe UK Small Companies was up 0.1% at 11,255.84.In European equities, the CAC 40 in Paris and the DAX 30 in Frankfurt were both up 0.2% in early dealings.In Asia on Wednesday, the Japanese Nikkei 225 index closed down 0.5%. In China, the Shanghai Composite ended up 0.1%, while the Hang Seng index in Hong Kong is down 0.1% in late trade.In the economic calendar on Wednesday is UK manufacturing production, the trade balance and February's gross domestic product reading at 0930 BST.At 1245 BST is the European Central Bank's latest interest rate decision, followed by a press conference with President Mario Draghi at 1330 BST.In the US, consumer price inflation is out at 1330 BST and minutes from the Federal Reserve's last meeting are released at 1900 BST."Today's European Central Bank policy meeting takes place against a background of disappointing economic growth," said Lloyds Banking. Lloyds said: "No further policy moves are expected today but ECB President Draghi's comments about the health of the economy will be watched closely. He is also likely to be quizzed about his recent remarks on "mitigating the side effects" of negative interest rates."The Fed minutes are "unlikely to provide any major surprises", Lloyds added, and should confirm US interest rates are on hold for now. Meanwhile, the pound will await the outcome of Wednesday's emergency Brexit summit, Lloyds noted. Sterling was quoted at USD1.3067 early Wednesday, up from USD1.3049 at the London equities close on Tuesday.European leaders are poised to grant UK Prime Minister Theresa May a longer extension to Britain's membership of the EU than she will request at a crunch summit.The prime minister is set to repeat her call to delay Brexit until June 30, with the possibility of an earlier departure if the UK's withdrawal deal is ratified. However, European Council president Donald Tusk suggested on the eve of the summit that EU leaders grant the UK a longer extension of up to one year.Tusk, in a letter to the heads of the 27 remaining member states, said there was "little reason to believe" that the ratification of May's beleaguered Brexit deal could be completed by the end of June.He called for the European Council to discuss an alternative, longer extension, such as a "flexible extension" lasting "as long as necessary and no longer than one year".In the FTSE 100, Tesco was the best performer, up 1.8%, after recording a jump in annual profit and boosting its dividend.The UK's biggest supermarket chain by market share also reiterated its confidence in reaching consensus profit expectations in the current financial year on the back of a "strong performance" to date despite challenges in the market.For the year ended February 23, Tesco generated pretax profit of GBP1.67 billion, up from GBP1.30 billion a year ago.Revenue rose 11% year-on-year to GBP63.91 billion from GBP57.49 billion, slightly lagging consensus. Group sales excluding fuels were up 12% to GBP56.88 billion, while on a like-for-like basis sales rose 1.4%.According to company-compiled analyst consensus, pretax profit was expected to rise 22% to GBP1.58 billion, while revenue was forecast 12% higher year-on-year at GBP64.52 billion.Tesco proposed a final dividend of 4.10 pence per share, taking the total payout for the year to 5.77p compared with 3.0p a year ago.Consumer goods firm Unilever was down 1.0% after Barclays started the Ben & Jerry's ice cream owner with an Underweight rating. Helping the FTSE 250 higher was Dunelm, up 4.7% after achieving third quarter sales growth and expecting to beat market profit expectations for the full-year. For the third quarter, or 13 weeks to March 30, Dunelm's total sales were up 6.1% to GBP284.5 million, with like-for-like store sales up 9.8% and comparable online sales 32% higher.Political and economy uncertainty remains "heightened" as the company enters the final quarter of its financial year, Dunelm said, but if there are no significant changes to current consumer trends it expects to report an annual pretax profit "slightly ahead of the top of the range" of current analyst forecasts.Dunelm noted that analyst estimates range between GBP115.6 million to GBP118.5 million."The strong growth in the third quarter reflects our ongoing focus on attracting more customers to the brand and giving them more reasons to shop with us through great product and service. Our performance was also buoyed by a positive homewares market," commented Chief Executive Nick Wilkinson.The mid-cap index was overcoming a significant drag from pharmaceutical firm Indivior, which sank 46% after a US grand jury issued an indictment of 28 felony counts against the company.The felonies, issued in connection with a federal criminal investigation initiated by the Department of Justice in 2013, include one count of conspiracy to commit mail, wire and health care fraud; one count of health care fraud; four counts of mail fraud; and 22 counts of wire fraud.The allegations are based on actions that occurred "almost exclusively" prior to Indivior becoming an independent company following its demerger from Reckitt Benckiser at the end of 2014.Reckitt Benckiser shares were down 2.2% early Wednesday.Indivior said it believes the claims are "unsupported by the facts and the law", and it will contest the allegations."While the company believes that it will successfully defend itself against the government's allegations, an adverse verdict may have a material adverse effect on the company and its financial position and outlook," Indivior warned.Stagecoach was another faller, down 7.8% as it lashed out at the UK government after being disqualified from three UK rail franchise competitions for submitting non-compliant bids in respect of pensions risk.Stagecoach has been excluded from the East Midlands, South Eastern and West Coast Partnership competitions.Stagecoach Chief Executive Martin Griffiths said: "We are extremely concerned at both the DfT's decision and its timing. The Department has had full knowledge of these bids for a lengthy period and we are seeking an urgent meeting to discuss our significant concerns.The Pensions Regulator has indicated that an additional GBP5 billion to GBP6 billion would be needed to "plug the gap" in train company pensions, Stagecoach said.The rail industry proposed solution would have delivered an additional GBP500 million to GBP600 million into the scheme, which Stagecoach believes would have provided "better stability and security"."We are shocked that the government has rejected this for a higher risk approach. We would urge that a full independent value for money review is undertaken into this issue without delay," said Stagecoach.On London's junior AIM market, online fashion retailer ASOS was up 2.6% despite reporting a "disappointing" set of interim results as profit plunged, though the firm retained its annual guidance.Total revenue for the six months to February 28 rose 14% to GBP1.31 billion, but pretax profit dropped 87% to GBP4.0 million. The firm's retail gross margin decreased by 60 basis points to 47.4%, in an overall first half performance the firm deemed "disappointing".On the sales growth, Chief Executive Nick Beighton commented that ASOS is "capable of a lot more"."We have identified a number of things we can do better and are taking action accordingly. We are confident of an improved performance in the second half and are not changing our guidance for the year," the ASOS boss said.
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TescoUnileverSGC.LRB..LDunelmIndiviorASOS