3rd Dec 2019 07:39
(Alliance News) - Stock prices in London are seen opening marginally higher on Tuesday following a lower close on Monday, despite the US threatening new import tariffs on European goods.
In company news plumbing and heating products supplier Ferguson said the demerger of its UK operations is on track, and movie house chain Cineworld Group warned annual trading will miss expectations on delayed movie releases.
IG futures indicate the FTSE 100 index is to open 8.36 points higher at 7,294.30. The large-cap index closed down 60.59 points, or 0.8%, at 7,285.94 on Monday.
For the first quarter ended October 31, Ferguson said revenue was up 5.3% to USD5.21 billion from USD4.95 in the first quarter last year. Trading profit, which excludes exceptional items and amortisation of acquired intangible assets, came in at USD451 million, up 9.2% from USD413 million the year before.
In the US, revenue was up 6.2% to USD4.89 billion from USD4.61 billion in the first quarter last year.
Ferguson said its demerger of Wolseley UK is on track and expects to complete the process in 2020.
"We expect to make further good progress in the year ahead. While US market growth is currently broadly flat. we remain confident of outperforming our end markets and our order books support continued modest revenue growth in the months ahead. This strong focus on growth with continued cost and margin discipline gives us confidence in our expectations for the full year, which remain unchanged," Chief Executive Officer Kevin Murphy said.
Cineworld Group said trading for the full year is expected to be slightly below management's expectations amid a weaker box office performance.
For the period January 1 to December 1, Cineworld said revenue was down 9.7%, with the box office performance - the money it makes from ticket admissions - down 13%.
"As anticipated, the box office performance for the reported period was slower than the comparative period in 2018 reflecting the phasing of major releases and postponement of some highly anticipated movies to 2020," the company said.
Cineworld said the integration plans for US cinema operator Regal Entertainment have progressed well, and it announced an increase in synergies to USD190 million from USD150 million.
"The impact of the major releases in December is expected to continue the recent positive box office trend. However given the weaker full year box office, partially offset by strong execution of synergies and revenue initiatives, management expects trading for the full year to be slightly below management's expectations," the company said.
Ryanair Holdings reported a 6% rise in November traffic to 11 million passengers from 10.4 million at group level, with a load factor of 96%. On a rolling annual basis, group traffic grew 9% to 151.6 million passengers from 139.1 million.
In the US on Monday, Wall Street ended sharply lower, with the Dow Jones Industrial Average down 1.0%, S&P 500 down 0.9% and Nasdaq Composite down 1.1%.
The US is considering slapping additional tariffs on European products as part of the long-running feud between Washington and Brussels over subsidies to airplane manufacturers.
"The US is initiating a process to assess increasing the tariff rates and subjecting additional European Union products to the tariffs," the US Trade Representative's office said.
The USTR announcement came after the World Trade Organization found that the EU had not taken "appropriate steps to remove the adverse effects" of its aid to Airbus.
The WTO previously declared European subsidies for Airbus illegal and then allowed the US to hit back with tariffs on EU imports to be able to recoup up to USD7.5 billion in damages.
The US also threatened to impose tariffs of up to 100% on USD2.4 billion in French goods in retaliation for a digital services tax it says is discriminatory.
French sparkling wine, yogurt and Roquefort cheese are on the list of goods that could be targeted as soon as mid-January after a report from the US Trade Representative's office found the tax penalizes American tech companies such as Alphabet's Google, Apple, Facebook and Amazon.com.
CMC Markets analyst Michael Hewson said: "The big question now is whether the US really means what it says, or whether this will be just another occasion when the US talks tough, only to back away at the last minute. If history is any guide the Europeans are likely to find US crosshairs start to move increasingly their way, the closer to next year's US election we get.
"Unsurprisingly, Asia markets haven't reacted well to the weaker closes in Europe and the US, however given that they were only playing catch-up, European markets still look as if they might open slightly higher this morning."
The Japanese Nikkei 225 index closed down 0.6%. In China, the Shanghai Composite ended up 0.3%, but the Hang Seng index in Hong Kong is down 0.2%.
The pound was quoted at USD1.2941 early Tuesday, firm against USD1.2933 at the London equities close Monday.
The euro was quoted at USD1.1075, down from USD1.1086 late Monday. Against the yen, the dollar was trading at JPY109.16, up from JPY109.03 late Monday.
Brent oil was quoted at USD61.04 early Tuesday, down from USD61.44 late Monday.
In other commodities, gold was quoted at USD1,460.07 early Tuesday, lower than USD1,463.74 late Monday.
The economic events calendar on Tuesday has UK construction PMI data at 0930 GMT and eurozone producer prices at 1000 GMT.
By Arvind Bhunjun; [email protected]
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