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(Alliance News) - Stocks in London are set to open lower on Monday, following a poor finish in New York on Friday and ahead of a key week for inflation readings.
In early UK company news, ASOS said Chief Executive Nick Beighton is stepping down, as it warned on profit in the year ahead due to cost pressures and the falling away of Covid-19-related benefits. AstraZeneca reported positive results for its Covid-19 antibody combination. Electric vehicle charging network Pod Point said it is mulling a London IPO.
IG says futures indicate the FTSE 100 index of large-caps to open down 25.95 points, or 0.4%, at 7,069.60 on Monday. The FTSE 100 closed up 17.51 points, or 0.2%, at 7,095.55 on Friday.
"Even though European markets closed lower on Friday, they still managed to finish the week higher, as did US markets, after what was a rather disappointing US jobs report, as we look forward to a week that sees US earnings season get underway in earnest, and where guidance is likely to be just as important as the headline numbers themselves," said Michael Hewson, chief market analyst at CMC Markets.
Data on Friday showed US nonfarm payrolls majorly disappointed in September. Total nonfarm payroll employment rose by 194,000 in September, less than half the 500,000 new jobs expected by analysts, according to FXStreet.
The Dow Jones Industrial Average ended flat, the S&P 500 down 0.2%, and the Nasdaq Composite down 0.5%.
The mood has lifted at the start of the new week in Asia as traders look ahead to some key inflation data this week.
The Nikkei 225 index in Tokyo ended up 1.6%. Against the yen, the dollar rose strongly to JPY112.74 versus JPY112.03.
In China, the Shanghai Composite was up 0.2%, while the Hang Seng index in Hong Kong rallied 1.9%. The S&P/ASX 200 in Sydney closed down 0.3%, however.
While Monday's economic calendar is quiet, later this week are inflation prints from the US and China.
Fuelling inflation jitters ahead of this, Brent oil was trading at USD83.68 a barrel early Monday, higher than USD83.15 late Friday.
"Fears that inflation will spike yet higher, and thus also become more entrenched than expected, are unlikely to ease this week," said Societe Generale.
In early UK company news, AstraZeneca said its long-acting antibody combination reduced severe Covid-19 or death in patients with mild-to-moderate symptoms.
The trial met its primary endpoint, with a dose of AZD7442 cutting the risk of developing severe Covid or death by 50% compared to placebo in outpatients who had been symptomatic for seven days or less.
A total of 90% of the participants enrolled for the Tackle phase three study were from populations at high risk of progression to severe Covid-19, including those with co-morbidities.
AstraZeneca said it will be discussing the data with health authorities, having last week announced the submission of a request to the US Food & Drug Administration for emergency use authorisation for AZD7442.
Online clothing retailer ASOS unveiled a board shake-up alongside its annual results, which showed a profit hike. However, the fast fashion firm warned on the year ahead amid supply chain issues and other cost pressures.
Revenue for the financial year to August 31 jumped 20% to GBP3.91 billion as retail sales grew 19% to GBP3.78 billion, while pretax profit rose 25% to GBP177.1 million.
However, sales growth in the year ahead is expected to be in the range of 10% to 15%, with interim revenue growth in "mid-single digits". This reflects tougher comparables and industry-wide supply chain pressures. The company expects sales to accelerate in the second half of the year and has laid out plans to generate GBP7 billion of annual revenue over the medium-term.
Adjusted pretax profit for the 2022 financial year is expected around GBP110 million to GBP140 million. This would be well below the GBP193.6 million registered for the financial year just ended.
ASOS flagged "notable cost headwinds", including inbound freight costs, Brexit duty annualisation, outbound delivery costs and labour cost inflation. It also said financial 2021 adjusted profit included GBP67.3 million in Covid-19-rated benefit.
"Looking ahead, while our performance in the next 12 months is likely to be constrained by demand volatility and global supply chain and cost pressures, we are confident in our ability to capture the sizeable opportunities ahead," said Chief Financial Officer & Chief Operating Officer Mat Dunn.
ASOS shook up its board to "underpin delivery of the next phase of its global growth strategy". CEO Beighton is stepping down after 12 years with ASOS, including six as CEO, and a search is underway for his replacement.
CFO Dunn has added the COO role and will run day-to-day operations, effective immediately. Katy Mecklenburgh, currently director of group finance, has become interim CFO.
Chair Adam Crozier, whose decision to step down was previously announced, will be succeeded by Senior Independent Non-Executive Director Ian Dyson.
"Over the last three years we have made significant progress...At the same time, however, we recognise that there is more to do to accelerate the pace and intensity of commercial execution," said Crozier.
EDF-backed electric vehicle charging firm Pod Point is mulling a float on the London Stock Exchange.
Pod Point, founded in 2009, said it is "one of the original" electric vehicle charging providers in the UK. It expects around 25 million charge points will be needed in the UK by 2040, and its outlook is underpinned by a favourable regulatory and political backdrop.
The initial public offer would comprise a primary offer of new shares with proceeds to support Pod Point's growth plans, and an offer of existing shares to be sold by Legal & General Capital Investments. Majority shareholder EDF is expected to retain a stake above 50% after the business floats.
"Today marks an exciting milestone for the business. I am looking forward to helping steer Pod Point's superb team to take advantage of the significant growth opportunity ahead of us. I have no doubt that the company will continue to thrive as one of the United Kingdom's leading EV charging companies, delivering further value to all its stakeholders and ensuring that travel does not damage the earth," said Chair Gareth Davis.
Davis is chair at M&C Saatchi, and has previously held the same role at other London listings, such as William Hill, Ferguson and DS Smith. He was CEO at Imperial Brands until 2010.
Sterling was quoted at USD1.3669 early Monday, up against USD1.3645 at the London equities close on Friday. The euro traded at USD1.1584, firm versus USD1.1578 late Friday.
Britain is on a fresh collision course with the EU over the UK Brexit minister's demand to drop the role of the European Court of Justice from the Northern Ireland Protocol.
David Frost was accused of using an unassailable "red line" to create a "destabilising stand-off" with Brussels amid indications the government was edging closer to overriding parts of its own post-Brexit agreement.
The Tory peer will use a speech in Portugal on Tuesday to say the EU must go further than scrapping its prohibition on British sausages crossing the Irish Sea.
Gold was quoted at USD1,755.97 an ounce early Monday, lower than USD1,759.55 on Friday.
The US third-quarter earnings season starts on Wednesday with financial firms BlackRock and JP Morgan Chase. Bank of America, Morgan Stanley and Citigroup follow on Thursday.
By Lucy Heming; lucyheming@alliancenews.com
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