7th Dec 2018 07:49
LONDON (Alliance News) - Stock prices in London are seen opening higher on Friday, rebounding from sharp losses on Thursday, after Wall Street recovered ground toward the US close and Asian markets have followed up with gains on Friday.In UK corporate news, housebuilder Berkeley Group's half-year earnings fell and Primark-owner Associated British Foods said it started its financial year in line with expectations. IG futures indicate the FTSE 100 index is to open up 78.75 points at 6,782.80. The blue chip index closed down 217.79 points, or 3.2%, on Thursday at 6,704.05, its lowest level in two years.Berkeley Group reported a drop in half-year earnings amid Brexit-related uncertainty for customers but pledged to return cash to shareholders. For the six months ended October 31, pretax profit fell 26% to GBP401.2 million from GBP539.9 million a year previous, and revenue dipped to GBP1.65 billion from GBP1.66 billion a year before. The housebuilder raised its pretax profit guidance for its current financial year by more than 5%, while guidance for the following two years is unchanged.During the period, the company said it sold 2,027 homes, down from 2,190 homes a year ago at an average selling price of GBP740,000, which was up from GBP721,000, "reflecting the mix of properties sold in the period".Berkeley said it will return GBP139.7 million to shareholders by September 30 next year and expects to return at least GBP16.34 per share to shareholders by September 30, 2021, through either dividend or share buybacks. Its share price at Thursday's close was GBP33.21.Berkeley declared an interim dividend of 7.12 pence."Berkeley has had a good start to the year, and this is reflected in our guidance, which is increased for the full year, and reaffirmed for the next two years, based upon current market conditions. This is in the context of a short-term outlook that is clearly uncertain due to the ongoing Brexit process and a number of headwinds in the operating environment in London and the South East. This uncertainty affects sentiment and confidence which has a consequential adverse impact on investment levels and transaction volumes with a number of developers withdrawing from these markets," said Chief Executive Rob Perrins. Ahead of its annual general meeting Friday, Associated British Foods said sales and profit for the first eight weeks of trading in its current financial year were in line with expectations. However, AB Foods said trading at its Primark clothing chain was challenging during November in a tough retail market, but with "careful inventory management and improved margins" its expectation for an increase in Primark's profit remains unchanged.The company said profit at its sugar unit AB Sugar will be significantly lower "reflecting the full year effect of EU sugar prices"."At current exchange rates we expect no material translation or transactional effect on profit, but the sterling exchange rate can be expected to be volatile given a period of intense Brexit negotiations. Taking all of these factors into account, at this early stage, we still expect adjusted earnings per share for the group for this financial year to be in line with the 2018 financial year," AB Foods said. Stockbroker AJ Bell priced its IPO at 160p per share and said its selling shareholders will raise GBP169.3 million from its listing on the Main Market of the London Stock Exchange. Its market capitalisation is estimated at around GBP651 million. The stock starts trading conditionally on Friday and unconditionally on Wednesday next week.In New York on Thursday, the Dow Jones Industrial Average ended down just 0.3% and the S&P 500 down 0.2%. The Nasdaq Composite gained, rising 0.4%.The Japanese Nikkei 225 index closed up 0.8% on Friday. In China, the Shanghai Composite closed flat, while the Hang Seng index in Hong Kong is down 0.1%.On Thursday, Wall Street initially followed other global markets lower, after the arrest of a top executive at Chinese tech giant Huawei rekindled US-China trade worries. However, New York ended well off the day's lows after reports that the Federal Reserve may consider slowing the pace of US interest rate increases.Citing recent interviews and public statements, the Wall Street Journal said Fed officials still think interest rates will move broadly higher in 2019, but they are becoming "less sure how fast they will need to act or how far they will need to go".The closely watched US jobs report for November will be released at 1330 GMT. The economy is expected to have added 199,000 jobs with a jobless rate of 3.7%.The pound was quoted at USD1.2765, unchanged from the London equities close Thursday.In political news, Prime Minister Theresa May will deploy government ministers to sell her Brexit deal around the UK on Friday after Tory backbenchers handed her a possible lifeline to get it through Parliament.Senior Cabinet ministers, including Chancellor Philip Hammond and Health Secretary Matt Hancock, are among those who will make another late push to garner support for May's Withdrawal Agreement ahead of Tuesday's vote.The move is likely to be seen as a bid to bolster flagging support for May ahead of a crunch Commons vote on her EU withdrawal deal next Tuesday - a showdown the PM made clear on Thursday morning she would not postpone.But it remains to be seen whether it goes far enough to win over enough Tory Brexiteers to get the deal through the Commons.The alteration would mean Parliament would have to approve a decision to trigger the backstop arrangement or extend the transition period beyond December 2020.The economic events calendar on Friday has UK Halifax house price index readings at 0830 GMT and eurozone GDP figures at 1000 GMT.
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