19th Nov 2019 07:42
(Alliance News) - Stocks in London look set to open higher on Tuesday despite some nerves on the US and China trade war front, with Melrose Industries and easyJet both calling trading in line, despite reporting contrasting effects from worker strikes.
IG says futures indicate the FTSE 100 index of large-caps to open 17.5 points higher at 7,322.80 on Tuesday. The index closed up 4.76 points, or 0.1%, at 7,307.70 on Monday.
FTSE 100-listed Melrose Industries said it is trading in line with expectations in 2019, though two of its units have been hurt by the recent General Motors strike in the US.
Sales in the industrial turnaround firm's Automotive unit were down 5% year-on-year in the period to from July 1 to October 31, and its Powder Metallurgy saw a 13% sales decline, both feeling the bite from the GM strike action.
Nearly 50,000 GM workers downed tools in mid-September, launching the biggest labour dispute to hit the automaker in more than a decade. The strike ended in October after a 40-day walkout.
Hazard detection and life protection technology manufacturer Halma edged its dividend higher after delivering first half earnings growth.
The FTSE 100 firm posted a 12% revenue rise to GBP653.7 million, with pretax profit rising 12% to GBP105.8 million.
Halma proposed a 6.54 pence per share interim payout, 7.0% up from 6.11p last year.
Budget airline easyJet said its full-year results were in line with expectations but reported "some weakness in consumer confidence".
Revenue increased by 8.3% to GBP6.39 billion, pretax profit fell by 3.4% to GBP445 million from GBP430 million however. Passenger revenue was 6.9% higher with the firm saying it benefited from strike action at IAG-owned flag carrier British Airways.
easyJet said headline costs, excluding fuel were 10% higher at GBP4.54 billion.
Headline pretax pretax profit was down 26% to GBP427 million but towards the top end of its GBP420 million to GBP430 million guidance range.
Looking ahead, easyJet said forward bookings for the first half of the 2020 financial year are "reassuring", slightly ahead of last year's levels.
Also in the FTSE 250, Homeserve reported an interim earnings rise, and added that it has agreed to acquire a 79% stake in US-based directory website operator eLocal. The home improvements firm will pay USD140 million on a "debt free, cash free" basis.
In the first half, Homeserve's revenue rose 13% to GBP457.7 million, with pretax profit up 2.1% from last year to GBP28.8 million from GBP24.6 million.
Boris Johnson and Jeremy Corbyn are set to go head-to-head in the first televised debate of the UK general election campaign.
The two leaders will face off in an hour-long encounter screened live on ITV on Tuesday evening.
The way was cleared for the debate to go ahead after the High Court in London rejected a legal challenge by the Liberal Democrats and the SNP over the exclusion of their leaders.
With Labour trailing in the opinion polls, Corbyn goes into the event – staged at studios in MediaCityUK, Salford – hoping for an opportunity to make up ground on the Conservatives.
In contrast, Johnson, who was criticised for his reluctance to debate directly with his rivals in the Tory leadership election, will be seeking to avoid any misstep which hands ammunition to his opponents.
In the US on Monday, Wall Street ended higher, with the Dow Jones Industrial Average, S&P 500 and Nasdaq Composite all edging 0.1% higher.
"In the latest rumour mill-churn, Chinese headlines suggest the mood in Beijing was 'pessimistic' regarding the trade deal as Trump is supposedly not in favour of any tariff rollbacks. It appears that Beijing is very much bothered as China thought both sides had agreed to do so in principle. With the constant stream of trade talk confusion, it makes one wonder if anyone is even remotely on the same page," Axitrader Asia market strategist Stephen Innes said.
He continued: "But on the back of the constant zig-zags in the US-Sino trade headlines over the past two weeks, I guess it's safe to assume a positive trade headline will be next up on the news feed agenda?"
US Federal Reserve Chair Jerome Powell reasserted the independence of the US central bank during White House talks with Trump on Monday.
Powell attended the meeting, which comes amid an unprecedented campaign of public attacks on the central bank, at the invitation of the president, and was joined by Treasury Secretary Steven Mnuchin.
Trump, who has lambasted Powell in harsh, personal terms over monetary policy, tweeted that the meeting was "good & cordial". He added that topics discussed included interest rates, inflation, foreign exchange and the Fed's balance sheet policies.
In a second tweet Monday evening, however, Trump said that during the meeting he protested "that our Fed Rate is set too high relative to the interest rates of other competitor countries".
Trump reportedly has backed off from a proposed ban on certain flavours of e-cigarettes, fearing that such a move could cost him votes in next year's US presidential election.
Aides allegedly advised him to hold fire on signing a memo to ban popular e-cigarette flavours such as fruit and menthol, warning that it could damage his re-election chances next year in some key battleground states, The New York Times and Washington Post both reported.
The Nikkei 225 closed 0.5% lower on Tuesday in Tokyo, China's Shanghai Composite closed up 0.9% and Hang Seng in Hong Kong is 1.4% higher in late trade.
The economic events calendar on Tuesday has eurozone current account figures at 0900 GMT.
Government officials from the 28 member states and lawmakers have agreed to provide around EUR153.6 billion in disbursements next year, after failing to hash out a deal on Friday.
EU member states had agreed on a budget of EUR153.1 billion for next year, while lawmakers from the European Parliament were initially pushing for a more ambitious EUR159.1 billion.
By Eric Cunha; [email protected]
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