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LONDON (Alliance News) - London share prices are set to open higher Wednesday, taking a lead from positive Asian stock trading, as Tesco reported a swing to a big loss on huge impairments.
IG says futures indicate the FTSE 100 to open 7 points higher at 7,069.0. The index closed up 0.2% at 7,062.93, in a light day in terms of economic data that let corporate news take centre stage, with Sky and ARM Holdings reaching new record highs after positive earnings reports.
Tesco said before the open Wednesday it swung to a big loss in its recently-ended financial year, after booking a staggering GBP7.0 billion of impairments, writedowns and restructuring charges as it tried to put a difficult year behind it and get back on track.
The UK's largest retailer reported a pretax loss for the year ended February 28 of GBP6.38 billion, compared with a profit of GBP2.26 billion a year earlier, as it booked GBP5.61 billion of impairments, mainly on its property portfolio, GBP570 million of stock-related charges, GBP416 million in restructuring costs, and a GBP208 million adjustment accounting for profit overstatements in previous years.
Its closely-watched trading profit, which excludes the one-off items, dropped by 59% to GBP1.39 billion.
Following the results from Tesco, the release of the minutes from bank of England's last monetary policy meeting, due at 0930 BST, is next up for the market's attention.
"It will be interesting to see whether the [BoE] committee?s views have changed on the prospects for inflation and wages in light of the more recent data, which has remained fairly positive, throughout the first quarter of this year," says Michael Hewson, chief market analyst at CMC Markets UK.
Asian stocks are trading higher Wednesday. The Japanese Nikkei 225 has closed up 1.1% at 20,133.90, above the 20,000 mark and at 15-year highs, while the Hang Seng trades up 0.2% at 27,904.11. The Shanghai Composite is up 1.8% at 4,372.56, a level that index hasn't seen since 2008.
Wall Street ended mixed Tuesday. The DJIA closed down 0.5% and the S&P 500 ended down 0.2%. Meanwhile, the Nasdaq Composite ended up 0.4%.
In London, Anglo-Dutch publisher Reed Elsevier reiterated its outlook for the full year, and said the simplification of its corporate structure and name change to RELX is on track to complete at the beginning of July subject to approval at its annual general meeting. The company announced plans to transfer the assets of its UK and Dutch parent companies into a new single group entity called RELX Group at the time of its full year results in February, although it will not change its brand or name for customer facing products and business units.
Rolls-Royce Holdings said Chief Executive John Rishton will retire on July 2 and be succeeded by former ARM Holdings CEO Warren East, who was CEO of the chip designer from 2001 to 2013, and became a non-executive director on the Rolls-Royce board in January 2014.
BP Chief Executive Bob Dudley has said the company has no appetite for a mega-merger, cooling speculation that the takeover of BG Group by Royal Dutch Shell will spark a wave of deals in the oil and gas industry, the Financial Times reports.
Separately, BP is seeking buyers for up to USD2 billion worth of its US pipelines and storage terminals as the group seeks to offload some of its non-drilling infrastructure, Bloomberg reported on Tuesday. The oil company has sent offering materials to potential buyers of two of its assets in the past fortnight, Bloomberg said, citing people familiar with the matter.
Meanwhile, Vodafone Group has held early talks with French telecoms company Altice about acquiring Portuguese cable business Cabovisão, the Financial Times reported on Tuesday. The European Commission cleared Altice's EUR7.4 billion takeover of Portugal Telecom on Monday, on the condition it divests its existing Cabovisão and Oni businesses in Portugal.
Overnight, BHP Billiton, the world's biggest miner, said its iron ore production for the third quarter rose 20% year-over-year to 58.98 million tons. Iron ore production for the 2015 financial year is now expected to be 230 million tons, 2% higher than prior guidance.
Third quarter production of metallurgical coal, which is used in steel making, remained flat with last year at 11.46 million tons. However, energy coal production increased 11% from the prior-year quarter to 19.71 million tons. The miner said its total petroleum production for the third quarter increased 1% from the year-ago period to 61.5 million barrels of oil equivalent.
Also in the economic calendar Wednesday, eurozone consumer confidence is due at 1500 BST. In the US, the house price index is at 1400 BST, existing home sales are at 1500 BST, while EIA crude oil stocks is at 1530 BST.
By Daniel Ruiz; danielruiz@alliancenews.com
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