20th Oct 2021 07:47
(Alliance News) -Â Stocks in London are set to open slightly lower on Wednesday, failing to follow positive momentum from New York overnight.
Meanwhile, the pound eased in early trade after the UK inflation rate unexpectedly softened in September.
In early UK company news, Burberry appointed Versace's Jonathan Akeroyd as its new chief executive, and Deliveroo raised its full-year gross transaction value guidance.
IG says futures indicate the FTSE 100 index of large-caps to open down 6.03 points, or 0.1%, at 7,211.50 on Wednesday. The FTSE 100 closed up 13.70 points, or 0.2%, at 7,217.53 on Tuesday.
The pound softened early Wednesday after data showed the UK inflation rate eased a touch last month.
The consumer price index rose 3.1% year-on-year in September, slowing from August's 3.2% growth. Analysts had been expecting the September reading to remain stable at 3.2%, according to FXStreet.
"Annual inflation fell back a little in September due to the unwinding effect of last year's 'Eat Out to Help Out', which was a factor in pushing up the rate in August," said Mike Hardie, Head of Prices at the Office for National Statistics.
The data comes after recent comments from Bank of England Governor Andrew Bailey that the UK central bank will have to act to ease inflationary pressures - leading to warnings from economists that the BoE could raise rates as soon as next month.
"That's why we, at the Bank of England, have signalled, and this is another such signal, that we will have to act," Bailey said, according to the Financial Times. "But of course that action comes in our monetary policy meetings."
Sterling was quoted at USD1.3791 following the inflation data, soft on USD1.3800 at the London equities close on Tuesday.
Also due on Wednesday is eurozone inflation, at 1000 BST. The flash reading of 1.9% year-on-year growth in consumer prices is expected to be confirmed.
The euro traded at USD1.1638 early Wednesday, essentially flat from USD1.1640 late Tuesday.
Against the yen, the dollar rose to JPY114.49 from JPY114.23.
In Asia on Wednesday, the Japanese Nikkei 225 index closed up 0.1%. In China, the Shanghai Composite was down 0.1%, while the Hang Seng index in Hong Kong shot up 1.2%. The S&P/ASX 200 in Sydney ended up 0.5%.
In the US on Tuesday, Wall Street ended higher, with the Dow Jones Industrial Average adding 0.6%, the S&P 500 up 0.7% and the Nasdaq Composite up 0.7%.
"Overnight, US earnings and recovery package hopes kept the music playing on Wall Street, which shook of higher US yields and posited another positive finish," said Jeffery Halley, senior market analyst at Oanda.
Shares in Netflix slipped 1.4% post-market despite the video streaming service reporting a rise in earnings and subscriber growth as it hailed recent hit show 'Squid Game'.
For the three months to September 30, revenue was up 16% at USD7.48 billion from USD6.44 billion in the third quarter last year. Third quarter net income was up 84% at USD1.45 billion from USD790 million the year before with diluted earnings per share of USD3.19, up from USD1.74 a year ago.
Meanwhile, United Airlines shares rose 2.3% after-hours after swinging to net income of USD473 million in the three months to September 30 from a loss of USD1.84 billion the same period a year before.
Oanda's Halley said: "US earnings will continue to drive sentiment globally ex-China, and as long as they remain upbeat, so should equity markets this week."
In early UK company news, British luxury fashion brand Burberry found a replacement for Chief Executive Marco Gobbetti in the form of ex-Alexander McQueen boss Jonathan Akeroyd.
Akeroyd, currently CEO of Milan-based Gianni Versace, will join Burberry to take up the same role on April 1, 2022. In his time at Versace, he has "reorganised and accelerated growth at the iconic Italian fashion house", Burberry said.
He was previously CEO of British luxury brand Alexander McQueen.
Gobbetti will leave Burberry at the end of 2021, and Gerry Murphy will chair the executive committee from this date until Akeroyd arrives.
Chilean miner Antofagasta backed its 2021 copper production guidance, but moderated warned output is set to dip next year.
Copper output in the third quarter was 181,100 tonnes, 1.5% higher than in the previous quarter on higher production at Centinela, partly offset by lower throughput at Los Pelambres. Cash costs before by-product credits in the third quarter were USD1.79 per pound, being 2 cents higher than the second quarter as the energy crisis pushed up input prices.
For the full-year, guidance for copper production of 710,000 to 740,000 tonnes was unchanged. For 2022 however, Antofagasta now expects output of 660,000 to 690,000 tonnes.
"Since we last reported, there has been no material rainfall at our operations and as we head into the summer months, we do not expect any rain until the next rainy season, which begins in June next year," said Chief Executive Ivan Arriagada.
"The construction of the desalination plant at Los Pelambres is on track for completion in H2 2022 and we now anticipate group production in 2022 to be between 660,000 and 690,000 tonnes reflecting the previously advised production tonnes at risk at Los Pelambres due to the weather, and lower grades at Centinela concentrates."
Cybersecurity firm Avast backed its outlook after third-quarter growth.
Revenue for the third quarter of 2021 rose 3.0% to USD232.7 million, and was up 5.6% on an organic basis. Adjusted earnings before interest, tax, depreciation and amortisation edged up 0.8% to USD127.0 million.
"Billings growth accelerated through the quarter, and we expect H2 billings growth of mid to high single digits," the company said.
Avast reaffirmed its full-year outlook for revenue to be at the upper end of 6% to 8% growth, and a broadly flat adjusted Ebitda margin percentage.
Deliveroo raised its outlook following a "strong" third quarter performance despite the lifting of most remaining coronavirus restrictions in the UK during the period.
The food delivery firm reported annual growth in gross transaction value of 54% in the third quarter of 2021 at GBP1.59 billion, describing orders as "resilient" despite lockdown restrictions being eased in the UK. It did note a "modest" reduction in average order value, with this slipping 6% year-on-year to GBP21.4 from GBP22.8.
On the back of this, Deliveroo raised its full-year gross transaction value guidance to growth of 60% to 70%, versus prior guidance of 50% to 60%. Its margin outlook was unchanged, seen in a range of 7.50% to 7.75%.
"While we are mindful of current and potential macroeconomic disruptions and uncertainties, we expect further strong performance in the remainder of the year and we are increasing our full-year GTV growth guidance," said Founder & Chief Executive Will Shu.
Gold was quoted at USD1,775.92 an ounce early Wednesday, slightly higher than USD1,772.17 on Tuesday. Brent oil was trading at USD84.50 a barrel, easing from USD84.64 late Tuesday.
By Lucy Heming;Â [email protected]
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