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LONDON MARKET PRE-OPEN: Gatwick Drone Hits easyJet Passengers Numbers

Tue, 22nd Jan 2019 07:46

LONDON (Alliance News) - Stock prices in London are set to open lower on Tuesday following a downbeat global economic outlook by the IMF and ahead of the latest UK average earnings and employment data release.In early UK company news, easyJet guided for its full-year performance to be in line with market expectations but passenger numbers were held back by the drone incident at Gatwick airport over Christmas. Dixons Carphone reported "good" Christmas sales, in line with expectations, which saw the mobile phone and consumer electronics retailer produce record sales against a "tough backdrop".IG says futures indicate the FTSE 100 index of large-caps to open 26.39 points or 0.4% lower on Tuesday at 6,944.20. The FTSE 100 index closed up 2.26 points at 6,970.59 on Monday.Stock markets in the US were closed on Monday for Martin Luther King Jr Day and will re-open on Tuesday.In Asia on Tuesday, the Japanese Nikkei 225 index closed down 0.5%. In China, the Shanghai Composite closed down 1.2%, while the Hang Seng index in Hong Kong is down 1.1% in late trade."With no lead from the US, which was closed for the Martin Luther King public holiday, Asian markets dropped lower overnight. The latest report from the IMF confirming the markets' fears over slowing global growth gave traders few reasons to cheer," said Jasper Lawler, head of research at London Capital Group.Lawler added: "The latest IMF report cut global growth to the slowest level in three years, citing the slowing Chinese economy and Brexit as causes for concern. The fund also pointed to weakness in Japan and the eurozone and warned over the impact of trade tensions. The IMF report comes hot on the heels of China reporting the slowest annual economic growth since 1990."In its World Economic Outlook on Monday, the International Monetary Fund cut its estimate for global growth in 2019, highlighting US-China trade tensions and the risk of a no-deal Brexit in Europe.The report estimated global growth in 2018 at 3.7%, in line with the forecast made in October. However, signs of a slowdown in the second half of 2018 are expected to carry over to coming quarters.Global growth is projected to grow 3.5% in 2019, before picking up slightly to 3.6% in 2020. In October, global growth had been seen at 3.7% in 2019 and 3.7% in 2020.In the economic calendar on Tuesday are UK average earnings and unemployment rate, both due at 0930 GMT.Average earnings for the three months to January are expected to rise 3.3% on an annual basis, while the jobless rate is forecast to remain steady at 4.1%.Sterling was quoted at USD1.2870 early Tuesday ahead of the data, lower than USD1.2899 at the London equities close on Monday.easyJet's first-quarter revenue was up 14% on a year before to GBP1.30 billion with passenger revenue up 12% to GBP1.03 billion.The budget airline's passenger numbers in the quarter increased 15% to 21.6 million, which easyJet said was driven by an increase in capacity of 18% to 24.1 million. Passenger numbers and capacity were both "slightly" below easyJet's expectations. The lower numbers were attributed to the drone incided in late December which shut London Gatwick for several days, as well as the late arrival of A321 deliveries from Airbus.Easyjet's load factor in the quarter decreased by 2 percentage points to 89.7%. Total revenue per seat decreased by 4.2%.Blue chip miner BHP Group reported a number of operational difficulties during its first half, though it upgraded copper production guidance nonetheless.For the six months to December, BHP's copper output fell 1% year-on-year to 825,000 tonnes. For the second quarter, production was down 3% year-on-year but up 2% quarter-on-quarter to 416,000 tonnes. Copper guidance for the year ending June has been increased to between 1.65 million tonnes and 1.74 million tonnes, from 1.62 million tonnes and 1.71 million tonnes before.BHP said copper production was helped by "record" production at Cerro Colorado and higher volumes at Spence, though expected lower grades at Escondida did hurt volumes. All three are in Chile. Dixons Carphone's like-for-like sales in the 10 weeks ended January 5 were up 1%, with reported revenue flat. The FTSE 250-listed retailer said like-for-like UK & Ireland electrical sales were up 2%, but mobile sales in the region were down 7%.Like-for-like International sales were up 5%, with reported revenue growth of 4%."Peak trading was solid and in line with expectations, producing record sales against a tough backdrop. We continued to grow our leading electrical market positions in all territories, online and in-store. In UK mobile, performance was as expected. Overall, our Peak trading was disciplined and well-executed, with stable gross margins," said Chief Executive Officer Alex Baldock.Dixons Carphone reiterated its full-year profit target of GBP300 million.A "significant" change in regulation saw IG Group's first-half profit decrease.IG Group reported an interim pretax profit decrease of 17% to GBP113.0 million from GBP136.2 million a year before. The firm's net trading revenue decreased 6% to GBP251.0 million from GBP268.4 million.IG CEO June Felix said: "IG has experienced significant change and will continue to do so in the future. Change will be driven by regulation, by shifting patterns of wealth, and by the continued development of financial markets around the world."IG reiterated its intention to maintain a 43.2 pence annual dividend.Merchant bank Close Brothers said its first-half performance was solid notwithstanding the "difficult trading conditions" in its sector.Close Brothers said its loan book grew 3.1% in the period to GBP7.5 billion and its Banking division continued to perform well, in line with expectations.Negative market movements decreased Close Brothers' assets under management as at December 31 by 3% to GBP10.0 billion.Primary care property investor and developer Assura said, at December 31, it now owns 553 medical centres with a total annualised rent of GBP99.8 million, up from GBP97.0 million at September 30.CEO Jonathan Murphy said: "We are pleased to provide another positive trading update on our business, with GBP67 million of additions to the portfolio in the last three months helping grow our rent roll to GBP99.8 million. Meanwhile we continue to replenish our pipeline of acquisitions and developments which currently stands at GBP170 million."As a result of its "successful growth" in the quarter, Assura is increasing its dividend by 5% to 0.685 pence per quarter, starting from January. UK Prime Minister Theresa May faces fresh clashes in the House of Commons over launching a second Brexit referendum and blocking a no-deal.Labour wants Parliament to be given the option to back a national poll on Brexit when MPs vote on the government's EU exit stance next week.An amendment to the prime minister's Brexit motion calls for a vote on backing Labour's plan for a customs union with the EU, and whether to legislate "to hold a public vote on a deal or a proposition" supported by a Commons majority.The move came is it was understood that Work & Pensions Secretary Amber Rudd had urged Downing Street to allow Tory MPs a free vote on moves aimed at preventing a no deal, amid fears that dozens of ministers could otherwise resign.Meanwhile, the Daily Telegraph reported that Tory HQ has been effectively put on a snap general election "war footing" due to the Brexit situation in Parliament.Elsewhere in the economic calendar on Tuesday, Germany's ZEW economic sentiment survey is at 1000 GMT, while the eurozone ZEW survey is due out at the same time. The World Economic Forum continues in Davos on Tuesday.

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