7th Jan 2021 07:43
(Alliance News) - Stock prices in London are seen opening higher on Thursday as equity markets shrugged off unrest in the US Capitol which delayed Congress from certifying November's presidential election result.
Shocking scenes on Wednesday saw angry pro-Trump supporters storm the Capitol. Some 52 people were arrested and four people died, Washington DC Police Chief Robert Contee said. One woman was shot by police in the Capitol building, and later died in hospital, Contee added.
"Traders are unfazed by the chaos that we experienced on Capitol Hill yesterday as stock futures are set to build more gains today. This is mainly because investors are optimistic about the possibility of more stimulus from Democrats. The US Senate is going to be less cumbersome because Vice President-elect Kamala Harrison has the power to swing the pendulum in Democrats' favour as Senate is split 50/50 between Republicans and Democrats," Avatrade analyst Naeem Aslam commented.
IG futures indicate the FTSE 100 index is to open 63.2 points higher at 6,905.06. The blue-chip index closed up 229.61 points, or 3.5%, at 6,841.86 on Wednesday.
On the London Stock Exchange, grocer J Sainsbury and retailer B&M European Value Retail reported hefty festive sales hikes, but budget carrier Ryanair cut its traffic forecast for the year ending March, due to new Covid-19 restrictions in the UK and Ireland.
Gambling firm Entain raised its earnings guidance and unveiled an acquisition, in the wake of shrugging off takeover interest from the US.
Sainsbury's said like-for-like sales in the nine weeks to January 2 - so including the key festive period - were up 9.3% year-on-year.
For the whole of its third-quarter, like-for-likes, excluding fuel, climbed 8.6%. Sales hikes were reported across the board, with grocery sales up 7.4%, general merchandise sales climbing 6.0%, and clothing sales up 0.4%.
Sainsbury's noted that online grocery sales more than doubled.
"Grocery, general merchandise and clothing sales were stronger than our expectations throughout the quarter and particularly since the start of England's second national lockdown and subsequent increased restrictions throughout the UK. general merchandise and clothing gross margins additionally benefited from better than anticipated full price sales, driven by customers shopping earlier for Christmas and successful changes to our Black Friday trading strategy," the company explained.
For the year ending March, Sainsbury's expects underlying pretax profit of at least GBP330 million, meaning a potential 44% fall from GBP586 million in financial 2020.
Meanwhile, B&M European Value Retail said revenue jumped 23% in the 13 weeks to December 26, its third quarter. Revenue totalled GBP1.40 billion, up from GBP1.14 billion.
B&M's UK stores saw annual revenue growth of 27% during the quarter.
B&M slightly nudged down its annual earnings forecast, however. It now expects adjusted earnings before interest, tax, depreciation and amortisation between GBP540 million and GBP570 million. Previous guidance issued in December was for an adjusted Ebitda between GBP600 million and GBP650 million.
Elsewhere among large caps, Ladbrokes Coral owner Entain said it has made a GBP250 million recommended offer for Enlabs, extending the UK bookmaker into Baltic markets.
The SEK40 per share offer values Enlabs at SEK2.80 billion, about GBP250 million. The agreed bid comes in the wake of Entain rejecting a potential takeover offer from its US partner, MGM Resorts International, as too low.
"The acquisition is expected to be earnings accretive in Entain's first full year of ownership," Entain said on Enlabs.
"Enlabs predominantly operates online sports-betting and gaming brands across the fast-growing Baltic region with a small retail presence. It is the market leader in Latvia, the second largest in Estonia and a top-five operator in Lithuania."
Entain said it had the support of the Enlabs board and shareholders representing 42% of the total.
The FTSE 100 firm added that it has continued its "strong performance" during its final quarter, despite government restrictions meaning it was forced to shut its UK bricks and mortar estate.
It bumped up its Ebitda guidance to between GBP825 million and GBP845 million, between 6% and 8% higher than the previous range.
Airline Ryanair hit out at the Irish government's latest restrictions, as well as its slow vaccination programme.
The carrier now expects traffic for the year ending March of between 26 million and 30 million, its guidance reduced from the previous forecast of "below 35 million".
Ryanair expects its January traffic to fall to below 1.25 million passengers and Covid-19 restrictions could mean it may only carry 500,000 customers in each of February and March.
The company warned: "In response, Ryanair will significantly cut its flight schedules from Thurs 21 January, which will result in few, if any, flights being operated to/from Ireland or the UK from the end of January until such time as these draconian travel restrictions are removed."
The firm called on the UK and Ireland to speed up their vaccination programmes. Ryanair particularly hit out at Ireland, which it said has vaccinated just 4,000 people, ten times slower than Denmark, a population of a similar size.
"The WHO have previously confirmed that governments should do everything possible to avoid brutal lockdowns, because lockdowns 'do not get rid of the virus'. Ireland's Covid-19 travel restrictions are already the most stringent in Europe, and so these new flight restrictions are inexplicable and ineffective when Ireland continues to operate an open border between the Republic and the North of Ireland," a spokesperson for Ryanair said.
GP surgeries in England are to begin administering the Oxford-AstraZeneca coronavirus vaccine as the UK faces a race to protect the population after the daily reported death toll topped 1,000.
The drive to mass vaccinate the population will take a considerable step forward as the NHS in England said the jab would be rolled out from GP surgeries from Thursday.
The development comes after the UK reported a further 1,041 people had died within 28 days of testing positive for Covid-19 as of Wednesday – the highest daily reported total since April 21.
London's hospitals are on the verge of being overwhelmed by coronavirus even under the 'best case' scenario, according to an official briefing.
The Health Service Journal said NHS England London medical director Vin Diwakar had established the stark predictions to the medical directors of London's hospital trusts on a Zoom call.
The pound was quoted at USD1.3582 early on Thursday, improved from USD1.3570 at the London equities close.
The euro stood at USD1.2318, up from USD1.2275 at the European equities close. Against the yen, the dollar was trading at JPY103.20, down from JPY103.37.
Tokyo's Nikkei 225 rallied 1.6% on Thursday.
Japan's government will declare a coronavirus state of emergency in the greater Tokyo area on Thursday, as media said the capital would again report a record daily number of infections.
In China, the Shanghai Composite closed up 0.7%, while the Hang Seng Index in Hong Kong was 0.2% lower in late trade.
China reported 63 new Covid-19 infections on Thursday – the highest single-day tally since July – as authorities try to stamp out an outbreak of the virus in a city of 11 million near Beijing.
Meanwhile, shares in China's two biggest companies Alibaba and Tencent tumbled in Hong Kong on Thursday in response to the media reports that the Trump administration plans to press ahead with a ban on Americans investing in them.
E-commerce firm Alibaba and internet powerhouse Tencent shed 4.1% and 3.4%
Brent oil was quoted at USD54.72 a barrel on Thursday morning in London, up from USD54.22 at the London equities close on Wednesday.
Gold fetched USD1,926.05 an ounce, improved from USD1,907.65.
The economic events calendar on Thursday has UK construction PMI at 0930 GMT, eurozone inflation and retail sales data at 1000 GMT and the latest US jobless claims figures at 1330 GMT.
CMC Markets analyst David Madden said: "The initial jobless claims report will be in focus in light of the disappointing ADP reading revealed yesterday. Economists are expecting the jobless claims report to be 800,000, up from 787,000. The continuing claims metric is tipped to dip from 5.21 million to 5.2 million.
"Yesterday, the ADP report showed that 123,000 jobs were lost, and keep in mind that in November, 307,000 jobs were created. There have growing concerns that the US economic rebound is losing a little momentum and the ADP update is evidence of such a cooling."
By Eric Cunha; [email protected]
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