AA..L Share News (AA.)

LONDON (Alliance News) - Stocks in London on Wednesday are set to continue the week's rally in the wake of more upbeat economic data from China and optimism over the latest round of US-Sino trade talks. In early UK company news, defence firm Babcock International hired Rolls-Royce Non-Executive Director Ruth Cairnie to take over the role of chair, Stagecoach said a better-than-expected rail performance has led to increased annual forecasts, and AA reported a set of in-line results and said it has won a contract with insurer Admiral.IG says futures indicate the FTSE 100 index of large-caps to open 6.78 points higher at 7,397.90 on Wednesday. The FTSE 100 index closed up 73.74 points, or 1.0%, at 7,391.12 on Tuesday."Asian markets advanced to fresh seven-month highs overnight and European bourses look set to open higher amid further signs of recovery in China," said Jasper Lawler at London Capital Group. "Layered on top is some more trade talk optimism as oil nears USD70 per barrel."Released overnight, the Caixin China composite purchasing managers' index posted a solid increased in business activity in March. IHS Markit said the PMI rose to 52.9 in March from 50.7 in February, signalling the strongest increase in activity since June 2018. Any score above 50 indicates expansion.IHS Markit said the overall expansion was helped by an improved performance in both the manufacturing and service sectors. "In general, China's economic fundamentals recovered in March, with domestic and external demand, as well as manufacturing employment, improving," said Zhengsheng Zhong, director of macroeconomic analysis at CEBM Group. Meanwhile, the Japan services and composite PMIs both slipped in March, though both remained in expansion territory.Stocks in Asia rose overnight, with the Japanese Nikkei 225 index ending up 1.0%. In China, the Shanghai Composite is up 0.4%, while the Hang Seng index in Hong Kong is up 0.9%.In the US on Tuesday, Wall Street ended mixed, with the Dow Jones Industrial Average finishing down 0.3%, the S&P 500 flat, and the Nasdaq Composite up 0.3%."Trade talks will regain focus on Wednesday when China's Vice Premier Liu He, with a delegation of trade negotiators, head to Washington. Any positive headlines could offer stocks the next step up," explained Lawler. Boosting sentiment, White House economic adviser Larry Kudlow said on Tuesday that the world's two largest economies "expect to make more headway" in trade talks this week.Brent was quoted at USD69.82 a barrel early Wednesday, up from USD69.34 late Tuesday.Meanwhile, sterling was higher early Wednesday, quoted at USD1.3144 from USD1.3030 at the London equities close on Tuesday after UK Prime Minister Theresa May said she will be seeking a further extension to Article 50.Her short statement came on a day when a cross-party group of senior MPs launched a bid to force the prime minister to stop no-deal Brexit by tabling a bill requiring her to extend the negotiation process beyond April 12.Number 10 made clear on Tuesday that an exit without agreement in 10 days time remains the legal default unless MPs approve a deal. And EU chief negotiator Michel Barnier said a no-deal departure was becoming "day after day more likely".May said she would try to strike a compromise deal with Labour leader Jeremy Corbyn but it would have to include her current deal.Corbyn said he would be "very happy" to meet the prime minister in a bid to offer "certainty and security" to the British people - but Tory Brexiteers reacted with fury.In early company news, transport operator Stagecoach further upped its annual guidance following "strong trade and positive progress" in its UK Rail division.For the 44 weeks to March 2, UK Rail revenue - excluding Virgin Trains East Coat - was up 1.4% on a like-for-like basis. The Virgin Rail Group posted a 6.7% rise in revenue in the same period.Among other divisions, regional UK bus operations rose 3.5% while London bus services generated 1.3% growth in like-for-like revenue. The rail performance was ahead of expectations, said Stagecoach, with continued good underlying revenue trends. "We have continued to make progress in achieving favourable outcomes from concluding industry charges and contractual matters associated with the expired South West Trains franchise, resulting in additional profit being recognised in the current financial year," said Stagecoach.This has resulted in an increase in expectations for adjusted earnings per share, Stagecoach said, without specifying what it expects to generate in its current financial year. In December, Stagecoach had increased its adjusted EPS expectations to reflect the above-forecast rail earnings in the first half of the year.Defence firm Babcock said it has appointed Rolls-Royce Non-Executive Ruth Cairnie as chair, effective from July. Cairnie will join the board of Babcock as a non-exec immediately, and will assume the role of chair on incumbent Mike Turner's retirement at the company's annual general meeting in July. He has been in the role for eleven years. As well as her role at Rolls-Royce, Cairnie is also a non-executive director of Primark owner Associated British Foods and ContourGlobal.Roadside rescue firm AA reported a set of annual results in line with expectations, as it also announced the award of a contract with blue-chip insurer Admiral. Revenue for the year to January 31 rose to GBP979 million from GBP960 million the year before, though pretax profit dropped nearly a third to GBP53 million from GBP141 million.The fall in profit followed an investment of GBP26 million by AA into its Roadside and Insurance units as part of its strategic plan, and was also "distorted" by a GBP22 million non-cash adjustment for Guaranteed Minimum Pension equalisation and a pension credit of GBP34 million in the prior year.Trading earnings before interest, tax, depreciation and amortisation came in at GBP341 million, in the middle of the firm's guidance range of GBP335 million to GBP345 million. AA recommended a final dividend of 1.4p per share, bringing the total payout for the year to 2p, less than half the 5p paid out the year before.Separately, AA said it has been awarded a three-year contract with insurer Admiral. AA will offer roadside assistance to Admiral's 4.3 million UK motor insurance customers, AA said, though no financial details of the deal were disclosed.Contracts-for-difference provider CMC Markets said its performance in its recently ended financial year was hit by reduced client trading activity following the implementation of European regulations. This was compounded by "challenging" market conditions in the fourth quarter, the firm added. As a result, CMC Markets expects to generate CFD and spread-bet revenue of GBP110 million for the year which ended on Sunday. This would be 37% lower than the prior year. More positively, operating costs are expected to be marginally lower year-on-year and slightly below previous guidance.Looking ahead, CMC Markets said the hit from European Securities & Markets Authority margin rules is showing signs of stabilising. "Since the introduction of the new rules, client money has remained strong, and active client and new client numbers have remained stable resulting in the group having confidence in meeting the consensus FY 2020 outlook," CMC Markets said.In the economic calendar on Wednesday, there are services PMIs from France at 0850 BST, Germany at 0855 BST, the eurozone at 0900 BST, the UK at 0930 BST and the US at 1445 BST.Outside of this, eurozone retail sales are at 1000 BST on Wednesday and US MBA mortgage applications at 1200 BST, with ADP employment change - a precursor to the closely watched nonfarm payrolls due on Friday - at 1315 BST.