10th May 2018 07:42
LONDON (Alliance News) - Stocks in London are set to open in positive territory on Thursday as the price of Brent crude continued to push higher overnight, fueled by US President Donald Trump's decision late Tuesday to withdraw from the Iran nuclear deal.Brent was quoted at USD77.72 a barrel early Thursday, up from USD76.90 at the London market close on Wednesday.In early UK company news on Thursday, BT saw a rise in annual profit, Next reported better-than-expected first quarter sales and lifted its guidance as a result, and Wm Morrison Supermarkets saw first quarter like-for-like sales rise.Released earlier, Royal Bank of Scotland Group said it has reached a USD4.9 billion settlement with the US Department of Justice over its misselling of residential mortgage-backed securities.Headlining the UK economic calendar on Thursday is the Bank of England's 'Super Thursday', which sees the latest monetary policy decision and inflation report released at 1200 BST. This will be followed by a press conference with Governor Mark Carney."Heavyweight oil stocks lifted the FTSE in the previous session, pushing it to a three-month high. With oil on the rise once again overnight, oil majors such as BP and Shell could be in for another bumper day today. The pound could potentially cap the FTSE's rally, should the Bank of England point towards a hawkish hold," says Jasper Lawler, head of research at London Capital Group.IG says futures indicate the FTSE 100 index of large-caps to open 11.18 points higher at 7,673.70 on Thursday. The index closed up 1.3%, or 96.77 points, at 7,662.52 on Wednesday.Sterling was quoted at USD1.3575 early Thursday ahead of the BoE, flat compared to USD1.3577 at the London equities close on Wednesday."The BoE is widely expected to keep policy on hold and the market is priced appropriately for this. The question is now whether there is still appetite within the MPC to hike rates this year, possibly as soon as August," say analysts at Societe Generale.At the beginning of April, forecasts for a May hike were high. The BoE in February had said it would look to raise rates "somewhat earlier and to a somewhat greater extent" than signalled in November last year.However, consensus forecasts tumbled to around a 50% chance of a May hike after Carney in April said he was "conscious" there are other meetings over 2018.Following these comments, a disappointing first-quarter GDP figure and the latest round of PMI numbers seemed to be the final nail in the coffin for a May hike. A hike in August is now the widely-expected course of action for the BoE this year.In early UK company news on Thursday, Royal Bank of Scotland said it has agreed to pay a USD4.9 billion fine to settle a US Department of Justice investigation into the bank's misselling of residential mortgage-backed securities.RBS said that USD3.46 billion of the amount will be covered by existing provisions, with an incremental charge of USD1.44 billion in the second quarter.RBS Chief Executive officer Ross McEwan said the agreement in principle with the DoJ was "a milestone".McEwan said: "Today's announcement is a milestone moment for the bank. Reaching this settlement in principle with the US Department of Justice will, when finalised, allow us to deal with this significant remaining legacy issue and is the price we have to pay for the global ambitions pursued by this bank before the crisis. Removing the uncertainty over the scale of this settlement means that the investment case for this bank is much clearer."BT said revenue for the year to March 31 fell 1% to GBP23.72 billion from GBP24.06 billion, though pretax profit climbed 11% to GBP2.62 billion from GBP2.35 billion. Adjusted earnings before interest, tax, depreciation and amortisation came in at GBP7.51 billion, down 2%.The company proposed a final dividend of 10.55p, giving a full year dividend of 15.4p, unchanged from last year.For the year ahead, BT said it sees underlying revenue down around 2%, adjusted Ebitda between GBP7.3 billion to GBP7.4 billion, and capital expenditure at GBP3.7 billion.Separately, the company said it and the trustee of the BT Pension Scheme have reached agreement on the 2017 triennial funding valuation. The recovery plan includes "material contributions" by BT to the scheme of GBP4.5 billion by June 30, 2020, when the next valuation is expected to take place.In addition, BT announced a strategy update, with the company set to launch "new converged product offerings", improve customer experience by increasing fibre-to-the-premises and mobile infrastructure investment within an annual capital expenditure allocation of around GBP3.7 billion, and a three-year reduction of 13,000 back office and middle management roles.Clothing retailer Next said first-quarter sales were "better than expected", with total sales rising 6.0% in the fourteen weeks to May 7. Within this, Retail fell 4.8% and Online was up 18%.Sales in the period were around GBP40 million ahead of internal forecasts, Next said, boosted in recent weeks by "unusually warm weather". This sales "over-performance" has added around GBP12 million to the company's full-year profit.Next said its central guidance now sees total full price sales growth of 2.2% year-on-year for the 12 months to January 2019, compared to guidance of 1.0% previously.The company now also expects pretax profit of around GBP717 million, as opposed to the GBP705 million guided previously, following its outperformance in the first quarter. This would mark a 1.3% decline on last year, while the previous guidance would have marked a 2.9% fall.ITV said its first-quarter performance was as expected, with total external revenue up 5% to GBP772 million, total ITV Studios revenue up 11% at GBP382 million, and Broadcast & Online revenue up 3% to GBP526 million. Total advertising revenue was up 3% in the first quarter.ITV total advertising - which includes net advertising revenue, online and sponsorship - is expected to be up 2% over the course of the first half, with continued strong growth in online though ITV Family broadly flat. "For the full year we are on track to deliver continued good organic revenue growth in ITV Studios and double digit revenue growth in Online," ITV said.Wm Morrison Supermarkets said like-for-like sales in the first quarter grew 3.6% excluding fuel, comprising contributions from retail of 1.8% and wholesale of 1.8%. Including fuel, this figure was 1.9%.Total sales were 3.8% higher in the thirteen weeks to May 6 excluding fuel, up 2.1% including fuel."We are pleased to have made a strong start to the year, again becoming more competitive for customers while delivering growth on growth. We expect to continue to improve in the year ahead," said Chief Executive David Potts.In the US on Wednesday, Wall Street ended higher, with the Dow Jones Industrial Average ending up 0.8%, the S&P 500 up 1.0% and Nasdaq Composite finishing 1.0% higher.After Wall Street closed on Wednesday, Twenty-First Century Fox said its third quarter profit fell short of expectations as revenue declined.On an adjusted basis, earnings came in at USD0.49 per share, down from USD0.54 per share last year. Analysts polled by Thomson Reuters estimated earnings of USD0.54 per share for the quarter."Our cable segment delivered its highest earnings ever in our fiscal third quarter, propelled by sustained double-digit gains in domestic affiliate revenues. Creatively, we are firing on all cylinders," said Executive Chairmen Rupert and Lachlan Murdoch.Revenue for the quarter dropped 2% to USD7.42 billion from USD7.56 billion last year. Analysts had a consensus revenue estimate of USD7.41 billion for the quarter.In Asia on Thursday, the Japanese Nikkei 225 index closed up 0.4%. In China, the Shanghai Composite is flat, while the Hang Seng index in Hong Kong is 0.6% higher.Data released earlier on Thursday showed China's consumer price inflation eased to a three-month low in April on weak food price growth, while producer price inflation increased for the first time in seven months on commodity prices.Inflation eased to 1.8% in April from 2.1% in March. This was the lowest since January, when the rate was 1.5% and below the expected level of 1.9%. The government targets around 3% inflation for 2018.Another report showed producer price inflation accelerated to 3.4% from 3.1% in March. The rate came in line with expectations, and was the first time prices have increased since last September.To come in the economic calendar on Thursday, UK manufacturing production is at 0930 BST, along with industrial production and the trade balance due at the same time, with the NISER GDP estimate at 1300 BST.In the US, initial jobless claims are at 1330 BST with the consumer price index due at the same time. France and Germany celebrate Ascension Day, but stock markets are open.Related Shares:
MRW.LBTNextITV