4th Jul 2018 07:41
LONDON (Alliance News) - Stocks in London are set to open lower on Wednesday, with focus in the UK on the Purchasing Managers' Index reading for June due later in the morning.In early UK company news on Wednesday, BP upped its interest in the UK's Clair field and sold its interest in Alaska's Kuparuk field, J Sainsbury saw first quarter like-for-like sales inch higher as it secured a GBP3.5 billion financing package for its Asda deal, and National Express won a EUR1 billion Moroccan bus contract.IG says futures indicate the FTSE 100 index of large-caps to open 20.49 points lower at 7,572.80 on Wednesday. The FTSE 100 index closed up 0.6%, or 45.44 points, at 7,593.29 on Tuesday."Given the current tense global climate any move higher is likely to be short lived. The lower close on Wall Street overnight inspired a sea of red in Asian markets, which is leading to a lower start in Europe this morning. Volatility and volume could be lower on global indices as US markets are closed for a public holiday," said Jasper Lawler, head of research at London Capital Group.In early UK data on Wednesday, the British Retail Consortium said shop prices were down 0.5% on year in June, following a 1.1% drop in May.Food inflation in the UK was up 1.2% on year in June - unchanged from the May reading. Non-food prices fell an annual 1.6%, moderating from the 2.5% tumble in the previous month.To come on Wednesday is the UK services PMI at 0930 BST.The services data comes after a strong set of UK PMI readings for June thus far, with both the manufacturing and construction scores coming in above consensus forecasts."Today's services sector data is also expected to put in a strong showing building on the strong April and May rebounds, which should augur for a strong performance in Q2 GDP data when the first estimate comes in at the end of this month," said CMC Markets chief market analyst Michael Hewson."The continued hot weather as well as England getting through the early rounds of the World Cup should see feel good effect trickle down into the numbers, and after last nights nail biting penalty shootout, against Colombia this should ripple out a little bit into this month as well," Hewson added.The PMI is seen unchanged from May's reading of 54, with any score above 50 indicating expansion in the sector.Sterling was quoted at USD1.3218 early Wednesday ahead of the PMI, higher than USD1.3187 at the London equities close on Tuesday.There are also services PMI readings on Wednesday due from Italy, France, Germany, and the eurozone 0845 BST, 0850 BST, 0855 BST, and 0900 BST, respectively. In UK company news, BP said it has bought a 16.5% interest from ConocoPhillips in the BP-operated Clair field, west of Shetland in the UK. As a result, BP will hold a 45.1% interest in Clair and ConocoPhillips will retain a 7.5% interest.Separately, the London-listed oil major has entered into agreements to sell to ConocoPhillips its entire 39.2% interest in the Greater Kuparuk Area on the north slope of Alaska, as well as its holding in the Kuparuk Transportation Co. "Details of the transactions are not being disclosed but, excluding customary adjustments, the transactions together are expected to be cash neutral for BP and ConocoPhillips," said BP.Fellow FTSE 100 constituent Sainsbury's said total retail sales were up 0.8% in the 16 weeks to June 30, with like-for-like sales excluding fuel growing 0.2%.The first quarter like-for-like growth was slower than the 0.9% recorded for the fourth quarter of Sainsbury's previous financial year, while total retail sales had grown 1.3% in the fourth quarter.Grocery sales grew 0.5% in the first quarter, with Groceries Online and Convenience up 7.3% and 3.6% respectively. Argos online sales, including mobile sales, grew 12% in the period.The grocer said it has agreed a GBP3.5 billion financing package in relation to its proposed takeover of Walmart-owned Asda. The deal was first announced at the end of April."The market remains competitive. However, we have the right strategy in place and our proposal to combine Sainsbury's and Asda will create a dynamic new player in UK retail, with the scale to give customers more of what they want today and create a more resilient and adaptable business for the future," said Chief Executive Mike Coupe.Compass Group said Finance Director Johnny Thomson is standing down from his role, and will leave by the end of December. The search for a successor will be started immediately, the contract caterer said.In the FTSE 250, National Express said its Spanish & Moroccan division, ALSA, has won a Moroccan bus contract worth EUR1 billion over the life of the agreement.The contract - servicing the cities of Rabat, Sale and Temara, Morocco - is expected to carry 109 million passengers a year across 61 routes. It is initially for 15 years, with the option of a further 7 year extension, and services commencing within a year. ALSA will operate the contract as the majority shareholder of a joint venture with CityBus, a local transport company.Meanwhie, SIG said its annual expectations for underlying profit are unchanged "providing there is no further deterioration in UK market conditions".For the six months to June 30, the building products supplier said revenue from continuing operations rose 0.6%, with like-for-like revenue in line with last year. In the UK & Ireland, like-for-like sales were down 3.1%, "reflecting an improved performance during May and June following the significant adverse impact from poor weather conditions earlier in the year."Looking ahead, the company said: "Trading conditions remain mixed across the group's markets, with continued confidence across mainland Europe and Ireland but ongoing challenges in parts of the UK construction sector, particularly commercial new build and RMI markets."Elsewhere on the Main Market, Topps Tiles said like-for-like revenue in the 13 weeks to July 1 fell 2.3%, reflective of a "weaker consumer environment". "Against this background, we believe that we continue to outperform the overall tile market and we are maintaining our focus on tight cost control and strong underlying cash generation," the tile retailer said.In a half session for the US on Tuesday, Wall Street ended lower, with the Dow Jones Industrial Average closing down 0.5%, the S&P 500 down 0.5% and Nasdaq Composite off 0.9%.Markets in the US are closed on Wednesday for the Independence Day holiday, and will reopen on Thursday.In Asia on Wednesday, the Japanese Nikkei 225 index closed down 0.3%. In China, the Shanghai Composite is down 0.8%, while the Hang Seng index in Hong Kong is down 1.1%.The services sector in China continued to expand in June, with a PMI score of 53.9, beating forecasts for a reading of 52.7 and up from 52.9 in May.Meanwhile, Japan's services PMI came in at 51.4, up from 51.0 in May but slightly below forecasts of 51.6.In political news, Germany's Social Democrats have said they need more time to mull the asylum policy deal struck by their coalition partners, the Christian Democrats and the Christian Social Union, before giving it their seal of approval.Social Democrat leader Andrea Nahles and her fellow party member, Finance Minister Olaf Scholz, told reporters that "progress" had been made after a meeting in Berlin, but that more time was needed, adding that the coalition would meet again on Thursday night.In particular, the SPD has misgivings about plans to set up transit centres near the German-Austrian borders, which they fear could see asylum seekers confined.Related Shares:
SIGBPNEX.LSainsbury'sTopps Tiles