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London pre-open: Stocks seen muted ahead of retail sales

Fri, 17th Feb 2017 07:28

(ShareCast News) - London stocks were set for a muted open on Friday as investors await the release of retail sales figures.

The FTSE 100 was expected to open unchanged at 7,278.

CMC Markets' Michael Hewson said: "When December's UK retail sales numbers came out there was some puzzlement as to why they were so poor given that in the week leading up to the release a stream of retailers had put out some fairly positive trading updates, for the pre and post-Christmas period.

"There were some exceptions, clothing retailer Next being the most notable with yet another profits warning, so it was a surprise when we saw a 1.9% decline, a number which almost wiped out the entire quarter's positive trading. Since then we've seen inflationary pressures increase in the latest January inflation data, and the most recent wages data up to December has shown some signs of softening, even though the labour market continues to hold up well.

"This might suggest that we could well see a weak January UK retail sales number when the latest numbers are released later this morning, particularly since last week's British Retail consortium January sales numbers showed a decline of 0.6%. Even so it has to be said that it's not always a good leading indicator given that we saw is post a 1% gain for December, the complete opposite of the ONS numbers."

Expectations for the numbers - due at 0930 GMT - are for a rise of 0.9% on the month and a 3.4% drop on an annualised basis.

In corporate news, AstraZeneca reported positive results from its Phase III OLYMPIAD trial of its breast cancer treatment Lynparza (olaparib).

Patients treated with Lynparza showed a statistically-significant and clinically-meaningful improvement in progression-free survival (PFS) compared with those who received chemotherapy (capecitabine, vinorelbine or eribulin).

Manufacturer Morgan Advanced Materials will sell its Europe-based rotary transfer systems business to Moog, a US manufacturer of motion and fluid control systems, for about 40m on a cash and debt free basis.

The sale is in line with the FTSE 250 company's strategy to simplify its portfolio and focus on global technology businesses of scale, while the rotary business for Moog will complement its European presence in the motion control manufacturing market.

Millennium & Copthorne Hotels posted its final results for the 2016 calendar year on Friday, with group revenue per available room (RevPAR) increasing by 6.6% to 76.71.

Total revenue in reported currency for 2016 grew by 79m or 9.3% to 926m, although in constant currency, revenue was flat indicating that exchange translation contributed 79m to total reported revenue.

Essentra posted better-than-expected full-2016 fiscal year earnings per share while keeping its dividend flat, with the latter as expected.

EPS came in at 36.3p compared to consensus of 35.6p, with the annual dividend steady at 20.7p.

During the year, the supplier of plastic and fibre products made three profit warnings, driven by tough conditions in its Health & Personal Care Packaging unit and short-term issues at its Filter Products arm.

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