21st Apr 2020 07:50
(Alliance News) - Stock prices in London are seen opening sharply lower on Tuesday, tracking Asian equity markets after US crude oil futures prices plunged below zero overnight for the first time ever.
In early company news, Primark clothing chain owner Associated British Foods said it will not pay an interim dividend in light of the coronavirus outbreak and cannot provide any financial guidance. London Stock Exchange Group said it is committed to its acquisition of market data firm Refinitiv as it reported positive first-quarter earnings and confirmed its dividend payment.
IG futures indicate the FTSE 100 index is to open 107.73 points, or 1.9%, lower at 5,705.10. The blue-chip index closed up 25.87 points, or 0.5%, at 5,812.83 on Monday.
Associated British Foods said it delivered an "encouraging" trading performance in the first half of its financial year, prior to the worst of the coronavirus outbreak in Europe and the US.
For the half-year ended February 29, revenue rose 2% to GBP7.65 billion from GBP7.53 billion the year before, but pretax profit fell 42% to GBP298 million from GBP515 million.
AB Foods attributed the fall in profit to exceptional items of GB309 million charged in the half-year compared to GBP79 million in the same period last year.
In light of the pandemic, AB Foods has decided not to declare an interim dividend, saying it was prudent given the focus on managing the group's cash outflow in the second half of the financial year.
"Our expectation for the aggregate operating result for our Sugar, Grocery, Ingredients and Agriculture businesses in the second half is unchanged. We have good visibility that we will be able to mitigate half of the operating costs of the Primark business while the stores remain closed. The timing of the reopening of the stores, however, remains uncertain; moreover, the process of reopening, once it begins, is likely to be complex. As a result, it is too early to provide earnings guidance for the remainder of the current financial year," Chair Michael McLintock.
London Stock Exchange Group also said it delivered a good first-quarter performance against an "unprecedented market backdrop".
For the quarter ended March 31, total income increased 13% to GBP615 million. It said this was driven by increased equity trading in Capital Markets and higher clearing activity across listed and over-the-counter products, leading to higher net treasury income in the Post Trade unit.
Post Trade Income rose 17% to GBP271 million, while LCH revenue was up 11%.
LSEG said its integration planning for market data and trading technology provider Refinitiv is progressing well and still expects to complete the acquisition in the second half of 2020.
"While the group has performed well in Q1, it is too early to comment specifically on the impact of the coronavirus pandemic on the outlook for LSEG and its customers for the remainder of the year. The group believes the longer-term drivers of growth in each of its business lines remain intact," LSEG said.
The Japanese Nikkei 225 index closed down 2.0%. In China, the Shanghai Composite is down 1.5%, while the Hang Seng index in Hong Kong is down 2.3%.
In the US on Monday, Wall Street ended lower, with the Dow Jones Industrial Average down 2.4%, S&P 500 down 1.0% and Nasdaq Composite down 1.2%.
Stocks on Wall Street ended in the red after the price for US benchmark West Texas Intermediate crude for May delivery plunged to negative USD37.63 a barrel ahead of the contract's expiry on Tuesday.
Oil prices crashed amid a devastating supply glut and lack of storage space, which has forced traders to pay others to take the crude off their hands.
Brent oil, the international crude benchmark, was quoted at USD25.37 a barrel early Tuesday, down from USD26.22 late Monday.
The pound was quoted at USD1.2411 early Tuesday, lower than USD1.2458 at the London equities close Monday.
The UK unemployment rate edged higher in February just before the coronavirus began to hit the UK economy, according to the Office For National Statistics.
The unemployment rate in the UK increased to 4.0% in February, prior to the major impact of the new coronavirus outbreak, up from 3.9% in January. Consensus estimates had expected the jobless rate to remain at 3.9%.
Meanwhile, UK job vacancies dived in the three months to March as the labour market contracted in the face of the lockdown to contain the virus. The Office for National Statistics said the number of job vacancies plunged by 52,000 to 795,000 for the quarter.
The euro was quoted at USD1.0833, down from USD1.0873. Against the yen, the dollar was quoted at JPY107.46, down from JPY107.72.
Gold was quoted at USD1,690.29 an ounce, soft from USD1,692.55 late Monday.
By Arvind Bhunjun; [email protected]
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