(Alliance News) - Stock prices in London are seen edging marginally higher on Thursday, with equities registering cautious gains as traders await fresh US economic data that could further fuel inflationary fears.
IG futures indicate the FTSE 100 index is to open 4.2 points, or 0.1%, higher at 7,031.13. The blue-chip index closed 2.86 points lower at 7,026.93 on Wednesday.
In early corporate news, insurer Aviva hailed its first quarter, noting that it registered a record performance in its Savings & Retirement arm. Johnson Matthey's annual revenue was lifted by booming metal prices, though one-off costs hurt profit.
There was more M&A action in London, as financial administration outsourcer Equiniti received a firm takeover offer from Siris Capital, and Morgan Stanley Infrastructure said it is mulling a takeover offer for waste management firm Augean.
In Asia on Thursday, the Shanghai Composite was up 0.4%, the Hang Seng in Hong Kong was down 0.2%, and the Nikkei 225 in Tokyo closed 0.3% lower. The S&P/ASX 200 in Sydney closed flat.
Sentiment in equity markets was tepid ahead of US economic data later on Thursday. A second US gross domestic product estimate, the latest initial jobless claim reading, and personal consumption expenditure figures are released at 1330 BST.
The figures will come amid a backdrop of inflationary nerves and fears that the central banks will taper measures implemented to boost economies battered by Covid-19. The core personal consumption expenditure reading is the US Federal Reserve's preferred gauge of inflation.
"It will be interesting to see whether service consumption has increased relative to goods, though as we also get consumption data," analysts at Danske Bank commented.
The dollar was stronger on Thursday.
The pound was quoted at USD1.4103 in London early on Thursday, down from USD1.4125 at the London equities close Wednesday. The euro stood at USD1.2189, down from USD1.2214.
Against the yen, the dollar was trading at JPY109.13, up from JPY109.01.
In company news in London, Aviva's core general insurance gross written premiums rose 4% annually to GBP2.0 billion in the first quarter of 2021.
The insurer saw "record" net flows in its Savings & Retirement arm, up 31% year-on-year to GBP2.98 billion. Sales at the unit grew 23% to GBP6.17 billion.
Aviva has also made progress in its debt reduction plans, Chief Executive Amanda Blanc highlighted.
"We made very good progress in the first quarter. We concluded the refocus of our portfolio, selling eight non-core businesses which will generate total cash proceeds of GBP7.5 billion once completed. We have made excellent headway in reducing leverage with debt reduction of GBP1.9 billion in the first half of 2021, and we expect the leverage ratio to be around 26% at the half year," Blanc explained.
Specialty chemicals firm Johnson Matthey posted mixed results for the year to March 31. Revenue rose 7.5% to GBP15.67 billion from GBP14.58 billion, though pretax profit dropped 22% to GBP238 million from GBP305 million. Major impairment and restructuring costs amounted to GBP171 million, rising 22%.
"Following a challenging first half, we recovered strongly in the second half helped by a strong recovery in our end markets and higher precious metal prices. We are delivering our efficiency programme, tightly managing working capital and generating cash from our more established businesses which we are continuing to invest for growth, particularly in battery materials and hydrogen," CEO Robert MacLeod said.
Looking ahead, Johnson Matthey said that should precious metals remain at their "current high level", the company will see a net benefit of GBP120 million for the current financial year. It also said capital expenditure will amount to up to GBP600 million, and it expects a GBP25 million profit hit due to foreign exchange movements.
"In 2021-22, assuming our end-markets remain robust, we expect low to mid-teens growth in underlying operating performance at constant precious metal prices and constant currency," the company added.
Gold was quoted at USD1,898.95 an ounce early Thursday, down from USD1,904.70 late Wednesday.
Elsewhere, Daily Mail & General Trust edged its interim payout higher, despite a fall in earnings with virus lockdowns hitting its events arm.
Revenue for the six months to the end of March dropped 15% year-on-year to GBP546.8 million from GBP641.5 million. Pretax profit fell 45% to GBP42.4 million from GBP77.0 million, the Daily Mail newspaper owner said.
It was a first half that saw the media company sell its education technology unit Hobsons for USD410 million.
CEO Paul Zwillenberg added: "We created significant value for our shareholders during the first half, through active management of the portfolio and continued strong operational execution.
"I am also delighted to welcome New Scientist to our market-leading Consumer Media division. It is a high-quality, subscriptions-led business with great people and will further improve the quality of our revenues."
Daily Mail & General inched its interim payout up 1.3% to 7.6p per share from 7.5p.
A wave of M&A deals continued on Thursday. Equiniti received a firm 180p per share takeover offer from Earth Private Holdings, a newly formed company owned by funds managed or advised by Siris Capital.
Equiniti shares closed up 7.5% at 181.00p on Wednesday, giving it a market capitalisation of GBP664.7 million.
The takeover bid values Equiniti at GBP673 million on a fully diluted basis, Siris said. The 180p offer is a 56% premium to Equiniti's 116p share price at the close of play on February, the day before initial press reports of a potential bid for the company.
Equniti's directors backed the offer.
Morgan Stanley Infrastructure confirmed press reports that it is considering a possible takeover offer for West Yorkshire-based waste management firm Augean. MSI said there can be no certainty that an offer will be made for the AIM listing or on what terms.
The latest slice of M&A action follows a busy day for it on Wednesday. Mid-cap pharmaceutical company Vectura agreed to be taken over by Murano Bidco, a company controlled by funds managed by Carlyle Europe Partners V, in a deal worth GBP958 million.
In addition, Spire Healthcare on Wednesday agreed to a cash takeover offer from Ramsay Health Care.
Brent oil was quoted at USD68.42 a barrel on Thursday morning London time, soft from USD68.64 late Wednesday.
By Eric Cunha; ericcunha@alliancenews.com;
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