9th Jan 2019 07:34
LONDON (Alliance News) - Stocks in London are set for a second consecutive session of gains on Wednesday as the US and China agreed to carry discussions into a third day.In company news, J Sainsbury sales fell in the third quarter amid a "highly competitive and promotional" general merchandise market, while Greggs lifted its annual guidance and Softcat said it is "materially ahead" of where it expected to be at this stage in the year. IG says futures indicate the FTSE 100 index of large-caps to open 62.30 points higher at 6,923.90 on Wednesday. The FTSE 100 index closed up 50.72 points, or 0.7%, at 6,861.60 on Tuesday."Suddenly several of the panic-causing issues that sent markets lower in the final quarter of 2018, appear to be progressing in a more positive manner," said Jasper Lawler, head of research at London Capital Group."The US and China are talking face to face to resolve their trade issues. Federal Reserve Chair Powell has promised that the Fed will remain flexible over rate hiking, and the US economy is strong with job creation at impressive levels," Lawler explained. "From this angle a boost in sentiment and increased appetite for risk is understandable."The US and China decided to extend talks into a third day on Wednesday, with US President Donald Trump on Tuesday tweeting the discussions were going "very well".If the world's two largest economies are unable an agreement by March 1, US tariffs on USD200 billion dollars of Chinese imports could jump from the current rate of 10% to 25%.Meanwhile, Trump on Tuesday, in a nine-minute televised speech, described the situation along the US-Mexico border as a "humanitarian crisis of the heart and soul" and charged that the only reason for the current government shutdown is that Democrats in Congress will not fund border security.Democrats who responded said the president is holding the government hostage over his "obsession" with forcing Americans to pay for what they said is an "expensive and ineffective" border wall.Trump addressed the nation as the US government was in the third week of a partial shutdown brought on by the dispute over funding for border security, including a wall.In the US on Tuesday, Wall Street ended in the green, with the Dow Jones Industrial Average ending up 1.1%, the S&P 500 up 1.0% and Nasdaq Composite closing 1.1% higher.In UK company news, grocer J Sainsbury said sales fell over the Christmas period, dragged down by its General Merchandise arm.Total retail sales were down 0.4% in the 15 weeks to January 5, with like-for-like sales, excluding fuel, down 1.1%. Grocery sales were up 0.4% while General Merchandise fell by 2.3% and Clothing declined by 0.2%. "General Merchandise sales grew strongly over the key Christmas weeks and outperformed the market over the quarter. Sales declined in the quarter due to cautious customer spending and our decision to reduce promotional activity across Black Friday. Clothing performed well, with strong full price sales growth in a tough market," said Chief Executive Mike Coupe.He added that retail markets are "highly competitive" and "very promotional", while the consumer outlook continues to be uncertain. Housebuilder Taylor Wimpey reported a year of "strong performance", in line with expectations, as it maintained its guidance for stable volumes in 2019 though was "mindful of market sensitivity".The company said it expects to report its annual results for 2018 in line with expectations, with the housing market in the year stable against an "uncertain" macroeconomic backdrop. Total home completions were up 3% in 2018 to 14,947, with the company's net private reservation rate 0.80 homes per outlet per week, up from 0.77 in 2017. The average selling price was flat at GBP264,000. "As we transition to our new strategy announced in May 2018, we reiterate our previous guidance for 2019 for similar volumes to 2018, in current market conditions, with significant volume growth potential for 2020 onwards. We will provide further guidance on 2019 as the year progresses," the homebuilder said. Fashion retailer Ted Baker said retail sales were up 12% in the five weeks to January 5, up 11% at constant currency. This was boosted by e-commerce sales, which rose 19%.Against a backdrop of "increased promotional activity", gross margins were in line with expectations for the full year. Ted Baker expects to report results for its financial year ending January 26 in line with expectations. "The Ted Baker brand has delivered a good performance across both our stores and e-commerce business, despite the continuing challenging external trading conditions across our markets. This result again reflects the strength of the brand and the quality of our collections," said acting Chief Executive Lindsay Page. The company said the independent external investigation conducted by Herbert Smith Freehills into media reports of harassment claims made against Ray Kelvin - founder of Ted Baker who is taking a voluntary leave of absence from his role as CEO while the investigation takes place - is progressing and a further update will be made in due course.IT infrastructure firm Softcat in a short statement said it is "materially ahead" of expectations as it approaches the end of its first half after trading continued to be strong since the company's last update in November.Baker Greggs said it saw a "strong finish" to a year of significant strategic progress, with like-for-like sales up as it nudged up its annual profit guidance.Total sales for the year ended December 29 were up 7.2%, while comparable company-managed shop sales were up 2.9%. Underlying pretax profit for the year is expected to be "at least" GBP88 million. In November, the FTSE 250 constituent had guided to profit of at least GBP86 million."Whilst there are many economic and other uncertainties hanging over the consumer environment, we enter the new year with good sales momentum and operational execution, a strong offer and a robust financial position," said Greggs.Gold miner Centamin said production for the fourth quarter was 137,600 ounces, a 17% improvement on the previous quarter, driven by higher grades. Production for the full-year was 472,418 ounces, a 13% reduction on 2017."Concluding an operationally challenging year, the fourth quarter delivered further improvement in the grade from both the open pit and the underground stoping, whilst underground development focused on longer term production access. We look forward to 2019, where the focus remains on ensuring delivery of grade and as such gold production from Sukari, supported by tight cost control across all areas of the organisation and returns for our shareholders," said Chief Executive Andrew Pardey.In the UK, members of Parliament are set to resume their debate on UK Prime Minister Theresa May's Brexit deal as rebel Tories made clear they were ready to wage a parliamentary guerrilla campaign to prevent a no-deal break if she is defeated.The Commons will begin five days of debate on Wednesday culminating in the "meaningful vote" next week which could determine the fate of her government.It comes after the prime minister dramatically pulled a vote before Christmas, admitting she was heading for defeat in the face of opposition from both pro-Leave and pro-Remain Tories.Ahead of the debate, MPs opposed to a no-deal break were flexing their muscles on Tuesday evening to inflict another bruising defeat on the government.Twenty Conservative MPs joined opposition parties in backing a cross-party amendment to the Finance Bill intended to limit the government's powers to make tax changes in the event of no-deal.Sterling was quoted at USD1.2738 early Wednesday, broadly unchanged from the London equities close on Tuesday.In Asia on Wednesday, the Japanese Nikkei 225 index closed up 1.1%. In China, the Shanghai Composite ended 0.7% higher, while the Hang Seng index in Hong Kong is up 2.0%.In the economic calendar on Wednesday is eurozone unemployment is at 1000 GMT. The Bank of Canada releases its latest interest rate decision at 1500 GMT, while Bank of England Governor Mark Carney speaks at 1530 GMT.At 1900 GMT, the US Federal Reserve releases the minutes of the latest Federal Open Market Committee minutes.
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Centamin PLCGreggsTED.LSoftcatTaylor WimpeySainsbury's