1st May 2019 07:40
LONDON (Alliance News) - Stock prices in London are set for a strong open on Wednesday with many European and Asian markets closed for May Day, as investors look towards a rate decision from the US central bank. IG says futures indicate the FTSE 100 index of large-caps to open 54.63 points higher at 7,458.40 on Wednesday. The FTSE 100 index closed down 36.89 points, or 0.5%, at 7,403.77 on Thursday.In early UK company news, grocer J Sainsbury reported a fall in profit as it took a GBP46 million charge in relation to its failed takeover attempt of Walmart-owned Asda.Revenue for the year to March 9 rose to GBP29.0 billion from GBP28.46 billion, though pretax profit fell to GBP239 million from GBP409 million. Like-for-like sales slipped 0.2%. The company was hit by GBP396 million in charges in the year, with GBP46 million of this comprising costs related to its aborted Asda takeover. Another GBP81 million was restructuring costs and GBP40 million Argos integration expenses. On an underlying basis, pretax profit rose 7.8% to GBP635 million. This was slightly above market consensus of GBP626 million.Sainsbury's did not comment further on the Asda deal, which was blocked by the UK competition regulator last week.The grocer raised its final dividend to 7.9p, up from 7.1p a year earlier, resulting in a total payout for the year of 11.0p, up from 10.20p. "Retail markets are highly competitive and very promotional and the consumer outlook continues to be uncertain. However, we are well placed to navigate the external environment and remain focused on delivering our strategy," Sainsbury's said.Chief Executive Mike Coup said he is confident in the group's strategy and "clear on what we need to do to continue to evolve the business in a highly competitive market". "We will also continue to strengthen our balance sheet and are making a new commitment to reduce net debt by at least GBP600 million over the next three years," he added.Clothing and homewares retailer Next said first-quarter trading was ahead of expectations due to "unusually warm weather" over Easter. Full price sales in the thirteen weeks to April 27 were up 4.5% year-on-year, which Next said was ahead of its forecast of 3.2% growth. "We believe this over performance versus forecast was mainly as a result of unusually warm weather over the Easter holiday period, which was particularly helpful to our Retail stores," the clothing retailer said. However, Next said it does not believe the over-performance seen in the quarter will continue into coming months, and thus left its annual guidance unchanged. London Stock Exchange Group reported a "good overall" first-quarter income performance despite a challenging market. Total income was up 5% in the three months to March 31 to GBP546 million, with gross profit up 6% to GBP490 million.Within divisions, Information Services revenue rose 6% to GBP214 million and LCH Post Trade income was up 17% to GBP182 million. Italy Post Trade income fell 4% to GBP36 million, while Capital Markets was down 9% to GBP97 million and Technology Services up 9% to GBP14 million."We are investing in and growing our Information Services business, including developing our multi-asset and data and analytics offering. While equity markets were slower due to macroeconomic uncertainty, we have seen an improved listing environment in Q2," commented Chief Executive David Schwimmer.Housebuilder Persimmon said the UK housing market is "resilient" and the level of customer activity "encouraging". The company said visitor levels to site, sales conversion rates and cancellation rates are all running in line with expectations.Persimmon said it current forward sales position is strong, with revenue, including legal completions take to date in 2019, of GBP2.70 billion. The company's weekly private sales rate per site since the start of the year is down 5%, however. The average private selling price has been firm at GBP237,850 versus GBP236,500 a year ago.Lloyds Banking revised its common equity tier one ratio guidance to 12.5% from 13% previously after being notified that the systemic risk buffer for the group's ring fenced bank will be 200 basis points.This equates to 170 basis points at a group level, and is less than the 210 basis points included in the bank's capital guidance. Office workspace provider IWG said sales growth was strong in the first quarter, providing a "good start" to the year. IWG said revenue growth in the three months of March 31 was 11% at constant currency, driven by the Americas, Asia Pacific and the Europe, the Middle East and Africa region. The UK saw a "small decline" in total revenue, though IWG noted that like-for-like revenue from open centres continued the positive improvement seen in the final quarter of 2018. In the afternoon, at 1200 BST, are first-quarter results from pharmaceutical firm GlaxoSmithKline.In the US on Thursday, Wall Street ended mixed, with the Dow Jones Industrial Average ending up 0.2%, the S&P 500 rising 0.1% but Nasdaq Composite shedding 0.6%. The Nasdaq's tumble was due to shares in Google parent Alphabet falling 7.5% on a disappointing set of first-quarter results late Monday. However, likely to boost the tech-heavy index on Wednesday will be iPhone maker Apple, which rose 5.0% in after-hours trade.Apple said late Tuesday that second-quarter profit dropped to USD11.56 billion or USD2.46 per share from USD13.82 billion or USD2.73 per share last year. Revenue fell 5% to USD58.02 billion from last year's USD61.14 billion. Analysts had a consensus revenues prediction of USD57.37 billion.Apple's revenue from iPhones dropped to USD31.05 billion from USD37.56 billion last year. However, iPhone revenue were above analysts' estimates of USD30.5 billion.In the UK, Markit's manufacturing PMI is at 0930 BST.The UK manufacturing PMI reading is expected to fall to 53.0 in April from 55.1 in March, according to consensus figures on FXStreet.In Ireland, manufacturing activity growth slowed to a low not seen since late 2016 in April, driven by new business growth slowing sharply.Data from IHS Markit showed the AIB Ireland Manufacturing Purchasing Managers' Index fell to 52.5 points in April from 53.9 in March, signalling the weakest growth since October 2016 though only just below the 52.6 reported in January. Any figure above 50 represents expansion rather than contraction in the sector.Also already released, shop price increases slowed in April as UK retailers more than doubled the number of products on discount to boost sales.Shop price inflation fell to 0.4% in April from 0.9% in March as the number of both food and non-food products on offer more than doubled compared to both last year and last month, according to the BRC-Nielsen Shop Price Index.Retailers have turned to placing more products on offer with shallower price cuts, with the substantial increase in discounting in April "a testimony to shoppers' reluctance to spend and to the intense competition within the industry", the British Retail Consortium said.In the US, ADP employment is at 1315 BST, a precursor to Friday's closely-watched nonfarm payrolls report. Then, at 1500 BST, is the ISM manufacturing PMI.Headlining the day, however, is the US Federal Reserve's latest monetary policy decision, due at 1900 BST and followed by a press conference with Fed Chair Jerome Powell at 1930 BST."As widely expected, we expect the FOMC to stay on hold at the conclusion of the 30 April-1 May meeting," said Bank of America Merrill Lynch, adding that the central bank should deliver a "balance message" on the economy.On Wednesday, markets in China, German, Italy, Spain and France are closed for the Labour Day holiday. Japan is closed for Accession Day, South Africa for Workers' Day.
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