26th Mar 2021 07:48
(Alliance News) - Stock prices in London are seen opening higher on Friday, tracking gains in US and Asian equity markets, as investors cheer US President Joe Biden's pledge to boost vaccination efforts.
In early company news, engineer Smiths Group raised its interim dividend and insurer Aviva's streamlining continued as it exited Poland.
IG futures indicate the FTSE 100 index is to open 51.27 points higher at 6,726.10. The blue-chip index closed down 38.06 points, or 0.6%, at 6,674.83 Thursday.
Smiths Group said it delivered a robust performance in the first half, despite market disruptions caused by the coronavirus pandemic.
For the half year to January 31, revenue was down 7.3% to GBP1.24 billion from GBP1.15 billion the year before, but pretax profit jumped to GBP84 million from GBP46 million.
Smiths Group raised its interim dividend 6.4% to 11.7 pence from 11.0p prior.
Looking ahead, Smiths said there were signs of improving trends in the second half, and it is confident of meeting market expectations for the full year. The company is undertaking a strategic restructuring
programme with a goal to deliver operating margins of 18% to 20%.
"This is a robust set of results relative to our end markets, with a resilient top line, good profit conversion and excellent cash generation. This has been delivered by our exceptional people in very challenging circumstances and my sincere thanks go to them. We have continued to position Smiths in the very best way - strategically, operationally, and financially - to enable us to take full advantage of market recovery when it comes," said Chief Executive Officer Andy Reynolds Smith.
"The accelerating global trends of sustainability and digitisation play to the core strengths and capabilities of Smiths' existing business model. We continue to enhance the positioning of the group for outperformance through targeted investment in innovation and disciplined transactions - including the planned separation of Smiths Medical by the end of 2021, which will focus and simplify the group and maximise value for all stakeholders," added Reynolds Smith.
Also continuing its streamlining effort was Aviva, as the insurer sold its Aviva Poland unit for EUR2.5 billion in cash to Germany's Allianz.
Aviva said it will now focus on its "strongest businesses" in the UK, Ireland and Canada where it has "leading market positions" and strong growth potential. The sale of Aviva Poland is the eighth divestment Aviva has announced in the past eight months under the strategy of CEO Amanda Blanc, and Aviva said this successfully concludes the planned refocus of the company's portfolio.
Blanc said: "The sale of our Polish business is an excellent conclusion to the refocusing of our portfolio announced just eight months ago. The sale of our eight non-core businesses will generate total cash proceeds of GBP7.5 billion. We have made significant progress with our debt reduction plan and in due course we will make a substantial return of capital to shareholders. Our strategic focus is now on our strongest businesses in the UK, Ireland and Canada where we have leading market positions and strong growth potential."
The Japanese Nikkei 225 index closed up 1.6%. In China, the Shanghai Composite ended up 1.6%, while the Hang Seng index in Hong Kong was up 1.8%.
In the US on Thursday, Wall Street ended higher, with the Dow Jones Industrial Average up 0.6%, S&P 500 up 0.5% and Nasdaq Composite up 0.1%.
US President Joe Biden on Thursday promised 200 million doses of Covid-19 vaccine in his first 100 days in office, doubling his initial goal, as he said at his first news conference that he intended to seek another term.
Biden began his news conference by announcing that he planned to administer 200 million doses of Covid-19 vaccine in his first 100 days - the end of April.
Amid speculation that Biden is laying the groundwork for Harris to run in 2024, the president said he was "a great respecter of fate" but plans to run. "My plan is to run for reelection. That's my expectation," Biden said.
CMC Markets analyst Michael Hewson said: "It has been notable this week that for all the concerns about a slowdown in Europe and a delay to an economic reopening that any dips in European stocks have been fairly shallow ones. This suggests that for all of the concerns about valuations, in Europe at least the appetite for stocks is still there, despite the uncertainty around rising infection rates and the slow rollout of vaccines.
"With this in mind and last night's positive US finish we can expect to see a positive start for European markets later this morning."
Meanwhile, the European Commission president has warned AstraZeneca that it must "honour" its vaccine contract with the bloc before exporting doses elsewhere in the world.
Ursula von der Leyen urged "transparency" from other countries, but did not confirm if the EU would bring in tougher export restrictions on coronavirus jabs, amid a row over supplies with the British-Swedish pharmaceutical giant.
However, she acknowledged that worldwide supply chains needed to remain "intact" for vaccine production, while some European leaders appeared optimistic that the UK and EU could soon resolve their dispute over supplies.
Elsewhere, UK Prime Minister Boris Johnson suffered a substantial backbench rebellion as 35 conservative MPs opposed the extension of coronavirus laws for a further six months.
The prime minister had ordered his MPs to support an extension to wide-ranging powers contained in the Coronavirus Act. But several ignored this and opted to vote against, including former cabinet ministers David Davis and Esther McVey.
Still, emergency rules will continue for another six months after the Commons vote to extend the Coronavirus Act 2020 was passed by 484 to 76.
The pound was quoted at USD1.3755 early Friday, up from USD1.3727 at the London equities close Thursday.
The euro was priced at USD1.1783, marginally higher from USD1.1778. Against the yen, the dollar was trading at JPY109.25, up from JPY109.15.
Brent oil was quoted at USD63.02 a barrel Friday morning, up sharply from USD61.61 at the London equities close Thursday. Gold was trading at USD1,728.04 an ounce, lower from USD1,732.44.
The international economic calendar has the German Ifo index at 0900 GMT and US personal income and consumption expenditures at 1230 GMT.
By Arvind Bhunjun; [email protected]
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