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(Alliance News) - Stock prices in London are seen adding to Monday's gains on Tuesday, with sentiment positive ahead of the US presidential election.
IG futures indicate the FTSE 100 index is to open 54.6 points higher at 5,709.57. The blue-chip index added 77.70 points, or 1.4%, on Monday at 5,654.97 points.
The pound was quoted at USD1.2929 early Tuesday, up from USD1.2894 at the London equities close on Monday.
"The upward moves that were witnessed yesterday don't appear to have been rooted in any particular fundamental story. The manufacturing data reports from China, Europe and the US were well-received, but the reports weren't that good to solely justify the big gains that were achieved," commented CMC Markets UK Market Analyst David Madden
"In a way, the bullish moves, felt like a relief rally, as stock slumped last week on the planned tighter restrictions for France and Germany, that will come into effect in this month, and now that November has arrived, there was a bounce back."
On the London Stock Exchange, Primark-owner AB Foods posted an annual earnings fall and also decided not to pay a final dividend, after previously having opted against an interim payout. While on the flip side, packaging firm DS Smith affirmed its intention to pay a first-half dividend.
"The increasing restrictions in a number of Primark's major markets, lead us to be cautious. On balance, we have elected not to propose a final dividend for the year whilst we monitor the impact of further Covid-19 restrictions on Primark during this important trading season," AB Foods explained.
It paid a 46.35 pence dividend in financial 2019.
AB Foods said group revenue fell 12% in the year ended September 12 to GBP13.94 billion from USD15.82 billion. Revenue was below market consensus of GBP14.40 billion. Pretax profit plunged 42% to GBP686 million from GBP1.17 billion during a year hit by Covid-19 lockdowns.
Primark revenue alone was 24% lower at GBP5.90 billion, AB Foods noted, adding that UK like-for-like sales are 12% lower since reopening from the Spring Covid-19 lockdown.
Faring better, Grocery revenue was 0.9% higher, and the Agriculture arm saw a 0.7% rise. However, Sugar revenue was down 0.9%, and Ingredients revenue inched 0.1% lower.
"Notwithstanding the currently announced periods of restriction, we expect Primark full year sales and profit to be higher next year. There will be a sales decline in the first half compared to last year but higher sales in the second half," AB Foods guided.
DS Smith said "it remains our intention to declare a dividend" after its performance improved as the six months ended October 31 drew to a close.
"While the profit for the half year will be lower than the comparable prior year period due to Covid, we have seen significant improvement in Q2 compared to Q1, on both sides of the Atlantic," the packaging firm explained.
Corrugated box volumes returned to comparable annual growth in the second quarter, with half year volumes expected to be around 1.5% lower from the year before.
Ryanair - fresh from reporting on Monday a swing to an interim loss during a period that included its normally busy summer season - posted a 70% plunge in October passengers to 4.1 million from 13.8 million a year earlier.
In its short update on Tuesday, the budget airline said it operated just 40% of its usual October schedule, with a 73% load factor.
It was a similar story for eastern Europe-focused Wizz Air. Capacity, measured in seats, was 53% lower year-on-year in October, and passenger numbers plunged 69%. Load factor was 29.4 percentage points lower annually at 65.9%.
Office space operator IWG saw third quarter revenue fell 14% to GBP583.3 milllion from GBP680.3 million. With more working from home due to Covid-19 restrictions, office space providers have seen earnings hit.
IWG added however that is on track to deliver GBP200 million in annual cost savings.
"As anticipated, the third quarter has been a challenging environment for the group as a result of the Covid-19 pandemic. This has also created difficulties for many of our customers whom we have supported with measures worth approximately GBP80 million so far this year, including rent deferrals. This support will continue during the fourth quarter and could rise to approximately GBP100 million for the full year," the company explained.
Housebuilder Crest Nicholson said adjusted pretax profit for the year ended October 31 will be "significantly ahead" of consensus of GBP37.9 million.
The FTSE 250 firm guided for it to come in at the upper end of its previous GBP35 million to GBP45 million forecast range as the trading environment has been "positive" since the UK housing sector re-emerged from the Spring virus shutdown. Forward sales as of October 31 was 2,289 units with gross development value of GBP480.5 million.
It also said it will reinstate its dividend, effective from its financial 2021 interim results on a two and a half times cover basis.
Against the dollar, the euro rose to USD1.1661 early Tuesday from USD1.1630 at the European equities close on Monday.
Versus the Japanese yen, the dollar dropped to JPY104.58 from JPY104.84.
Turning to the US, analysts at Danske Bank noted prediction markets have tipped a 61% chance of Democrat candidate Joe Biden winning the race for the White House.
State law enforcement officials warned Monday against pressure to declare the winner of the US election, amid reporting that President Donald Trump has mulled claiming victory before votes are counted.
"We have experience in handling close elections," Josh Stein, the attorney general of North Carolina, said in a briefing organised by the non-partisan Voter Protection Project.
"We may know the winner Tuesday night...or we may not know the winner," he said.
If Trump declares victory prematurely, he added, "it would be unfortunate, but it really would be irrelevant."
In China, the Shanghai Composite closed 1.4% higher, with the Hang Seng index in Hong Kong up 2.1% late in the session.
Financial markets are closed in Japan on Tuesday, as the country celebrates its Culture Day holiday.
Gold was quoted at USD1.889.73 early Tuesday in London, down a notch from USD1,891.20 late Monday.
A barrel Brent oil fetched USD38.74 early Tuesday in London, up from USD37.94 late Monday.
Oil giant Saudi Aramco released its third-quarter results on Tuesday, with numbers showing a profit fall.
Chief Executive Officer Amin Nasser insisted the company saw "early signs of a recovery in the third quarter".
Net income fell 45% year-on-year to USD11.79 billion and earnings before interest and tax were down 42% to USD25.46 billion. Saudi Aramco said the average realised crude price dropped 30% to USD43.6 a barrel
The data calendar has US factory orders in the afternoon at 1500 GMT, after Irish monthly unemployment data at 1100 GMT.
By Eric Cunha; ericcunha@alliancenews.com;
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