6th Jan 2020 07:47
(Alliance News) - Stock prices in London are seen opening in the red on Monday as tensions between the US and Iran intensified over the weekend after the US killed an Iranian general on Friday last week.
In early company news, caterer Compass Group confirmed its chair is to step down. Contract-for-difference trading provider Plus500 forecast a lower annual financial performance. Drugmaker AstraZeneca said its treatment for hyperkalaemia was approved in China while another drug made regulatory progress in the US.
IG futures indicate the FTSE 100 index is to open points 44.70 lower at 7,577.70. The blue-chip index closed up 18.10 points, or 0.2%, at 7,622.40 on Friday.
Compass said Paul Walsh has decided to step down as chair to focus on "his other business interests", but will remain with the company until a successor is in place.
"It has been a privilege to serve for the last 6 years as chairman of Compass, which is a world-class business and a true British success story on the global stage. We have a strong and well-established chief executive in place and I will work to ensure a seamless transition to my successor as chairman," Walsh said.
AstraZeneca said the US Food & Drug Administration granted the company a priority review for its Farxiga heart failure drug. AstraZeneca said the FDA accepted a supplemental New Drug Application for Farxiga scheduled for the second quarter of 2020.
In addition, AstraZeneca said its drug to treat hyperkalaemia had been approved in China after a positive clinical trial.
Plus500 said it expect to report revenue and earnings before interest, tax, depreciation and amortisation for 2019 of USD354 million and USD190 million, respectively. For 2018, Plus500 reported revenue and EBITDA of USD720.4 million and USD506 million respectively.
Back at the start of last year, Plus500 had said 2019 earnings for would be materially lower than analyst expectations due to tighter European regulation of the CFDs it sells to retail investors.
The company said it was pleased with the performance which reflects "a much improved second half compared to the first half".
Chief Executive Officer Asaf Elimelech said: "We finished the year in good financial and operational shape following a period of change for the industry, which has provided a more certain regulatory outlook for Plus500. I am encouraged by the momentum we have shown in the second half, reflecting continued optimisation of our marketing spend, enhancements to our customer service, and improvements in our proprietary technology platform. Looking to 2020 we are confident of the prospects for the Group as we focus on further strengthening our customer offering and market positions."
US President Donald Trump threatened "major retaliation" on Sunday if Iran avenges the killing of a key military commander, and he warned of massive economic sanctions against ally Iraq if the country expels US troops based there.
The twin threats came as Iran announced it was further reducing compliance with a tattered international nuclear accord, ending limitations on numbers of centrifuges used to enrich uranium.
The latest blow to the accord, which was meant to ensure Iran did not develop a nuclear weapon under cover of its nuclear industry, deepened the regional crisis set off by Friday's killing of Iranian general Qasem Soleimani in Baghdad. Trump ordered a US drone to fire a missile at Soleimani, one of the most influential people in Iran's government, when he was near the Iraqi capital's international airport.
Gold was quoted at USD1,576.60 an ounce early Monday, sharply higher from USD1,549.40 late Friday. The precious metal was trading at its highest levels since mid-2013 as the demand for safe haven assets increased.
Oil was quoted at USD70.18 a barrel, up from USD68.11 late Friday. The North Sea benchmark touched an overnight high of USD70.72 - its highest level since May.
The pound was quoted at USD1.3077 early Monday, down from USD1.3092 late Friday.
UK Prime Minister Boris Johnson is to assemble key ministers on Monday to discuss the spiralling crisis in the Middle East.
After speaking to the US President on Sunday, Johnson broke his silence to say the UK "will not lament" the death of the leader who he said was "a threat to all our interests".
The euro was quoted at USD1.1160 early Monday, lower than USD1.1177 late Friday.
Against the yen, the dollar was quoted at JPY108.00, firm against JPY107.93 late Friday.
The economic calendar on Monday has services PMI readings from Germany at 0855 GMT, eurozone at 0900 GMT and UK at 0930 GMT.
Already out, Ireland's services sector remained in growth in December, survey data from AIB and IHS Markit showed.
The AIB purchasing managers' index for services expanded at its fastest pace since June, coming in at 55.9 points in December, improved from 53.7 in November and well above the 50.0 mark that separates growth from decline.
The services business activity index has been in a sequence of uninterrupted growth since August 2012, AIB noted.
The Japanese Nikkei 225 index closed down 1.9%. In China, the Shanghai Composite closed down 0.1%, while the Hang Seng index in Hong Kong is down 1.2%.
China's services sector reported a reasonable rise in new work in December, data from Caixin showed on Monday.
The Chinese December services purchasing managers' index was 52.5, from 53.5 in November. This means the services sector remains in expansion, though the rate of growth has eased.
By Arvind Bhunjun; [email protected].
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