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(Alliance News) -Â European markets on Wednesday are seen their taking their lead from Wall Street overnight, as stocks in New York rallied and that momentum flowed through to Asia.
In early UK company news, online trading platform IG Group said full-year revenue is set to top market forecasts, gold miner Centamin saw profit halve in a year of "peak reset", and premium mixers maker Fevertree drinks declared a special dividend though cautioned on inflationary pressures.
IG says futures indicate the FTSE 100 index of large-caps will open up 102.70 points, or 1.4%, at 7,278.40 on Wednesday. The FTSE 100 closed down 17.77 points, or 0.3%, at 7,175.70 on Tuesday.
In the US on Tuesday, the Dow Jones Industrial Average ended up 1.8%, the S&P 500 up 2.1% and the Nasdaq Composite up 2.9%.
Stocks in New York closed near session highs, resisting intraday selling pressure, as markets took confidence from a producer price reading that was robust but not hotter than forecast. The US producer price index rose 10% on an annual basis in February, in line with expectations and matching January's figure.
Momentum continued through to Asia, giving the Hong Kong market some much needed respite after a brutal week so far.
The Japanese Nikkei 225 index ended up 1.6%, and the S&P/ASX 200 in Sydney ended 1.1% higher. In China, the Shanghai Composite closed up 3.5%, while the Hang Seng index in Hong Kong shot up 8.2%. But even with Wednesday's jump, the Hang Seng remains 3.1% lower since the week began.
"As a result of yesterday's strong finish European markets look set to open higher this morning; however any rally is likely to find itself pushing against the headwinds of headlines out of Ukraine, as well as the prospect that Russia might default on a bond payment later today," said Michael Hewson, chief market analyst at CMC Markets.
The US is set to unveil a fresh round of security assistance to Ukraine Wednesday, a White House official said, as Western leaders faced mounting pressure to stop Russia's bombardment of civilians and peace talks made halting progress.
The official said President Joe Biden will on Wednesday unveil another USD800 million worth of military aid, expected to include more of the anti-tank and anti-aircraft missiles that have helped slow Russia's three-week-old invasion to a crawl.
The move will coincide with Ukrainian President Volodymyr Zelensky's landmark virtual address to the US Congress â when he is expected to intensify pleas for NATO allies to intervene directly to stop Russian attacks.
Negotiating positions with Russia are now more realistic, Zelensky said in a separate video message. But it would still take a while before Ukraine can be satisfied, he added.
"We all want peace and victory as soon as possible," the president said. "But it takes effort and patience." Every war ends with an agreement, Zelensky asserted, adding: "The meetings will continue."
Markets also will have an eye on Wednesday's interest rate decision from the Federal Reserve, with the US central bank expected to hike interest rates for the first time since 2018.
"This week's growth and inflation forecasts are likely to be significant in that context as markets look to price the prospect of how aggressively the Fed might tighten monetary policy over the next few months," said CMC's Hewson.
The Fed announces its latest interest rate decision at 1800 GMT on Wednesday. Elsewhere, the economic calendar has US retail sales at 1230 GMT.
In early UK company news, IG Group said it expects full-year revenue will moderately exceed current market expectations.
The third quarter that ended February 28 was another one of revenue growth, it said, with net trading revenue up 13% to GBP257.2 million. This reflects an all-time high in the number of active clients at 292,200 versus 220,900 a year before.
"I'm delighted to be reporting another quarter of outstanding performance driven by a record number of clients trading in the period. Today, we have more clients and a broader range of products to trade than ever before in our history," said Chief Executive June Felix.
Egyptian gold miner Centamin reported a drop in revenue and profit for 2021 in a year of "peak reset".
Revenue for 2021 fell 12% to GBP733.3 million and pretax profit halved to GBP153.6 million from GBP315.0 million.
"In December 2020, we announced our three-year reset plans and outlook, which framed 2021 as our peak reset year, meaning lower production and higher capital expenditure. Therefore, understandably, our financial results last year were not as strong as previous years but, importantly, our business is in a much stronger position as we invest in our long-term success," the company said.
Centamin produced 415,370 ounces of gold in 2021, down 8% on 2020, though it expects an improvement in the year ahead with 2022's guidance range sitting at 430,000 ounces to 460,000 ounces.
However, costs are set to also rise. All-in sustaining costs in 2022 are guided between USD1,275 to USD1,425 per ounce sold, reflecting inflationary pressures and a USD226 million comprehensive asset reset and growth investment programme. In 2021, all-in sustaining costs rose 19% to USD1,234.
IT services provider Computacenter said revenue for 2021 was up 24% at GBP6.73 billion from GBP5.44 billion the year before, and pretax profit improved 20% to GBP248.0 million from GBP206.6 million.
The firm plans to make a payout of 66.3 pence per share for 2021, up 31% on 2020. Computacenter added that its cash position was strong at the end of the year and, while it prioritises the organic growth of the business as well as merger and acquisition activity, it will consider "returning value to shareholders".
Computacenter said it is confident of a year of "further progress" in 2022, though added: "Given the profile of our profitability in 2021, we have a more challenging comparison in the first half of 2022 compared to the second, due to the fact that an abnormally high percentage of our profits came in the first half of the year."
Tonic water maker Fevertree Drinks said it will pay a special dividend after a strong 2021, though it cautioned on inflationary pressures.
Revenue for 2021 rose 23% to GBP311.1 million from GBP252.1 million in 2020, with pretax profit increasing 7.8% to GBP55.6 million from GBP51.6 million. Adjusted earnings before interest, tax, depreciation and amortisation rose 11% to GBP63.0 million.
Fevertree said its sales performance in the year was strong given continued widespread On-Trade - meaning restaurant and bar - closures in the first half of 2021. When the On-Trade re-opened, it recovered strongly, the firm said, while its at-home performance remained well above pre-pandemic levels.
"We expect Off-Trade demand to remain at higher levels than pre-pandemic and are well placed to benefit from this sustained shift in consumer behaviour. The On-Trade has continued to recover since the start of the year, and we look forward to a full year of trading through this channel for the first time in over two years," said Fevertree.
For 2022, the company expects revenue growth between 14% and 17%, to a range of GBP355 million to GBP365 million. Fevertree cautioned that commodity prices have increased "dramatically" in recent weeks, and it expects to deliver Ebitda between GBP63 million and GBP66 million for the year ahead - at best this will represent growth of 4.8% on 2021.
Fevertree's total dividend for 2021 was 15.99 pence, up 2% on the 15.68p paid out for 2020. On top of this, it is recommending a special payout of 42.90p, "reflecting our financial strength, ongoing cash generation, as well as our confidence in the continued execution of our strategy."
The dollar was mixed heading into the Fed decision. Sterling was quoted at USD1.3040 early Wednesday, soft on USD1.3049 at the London equities close on Tuesday.
The euro traded at USD1.0962 early Wednesday, firm versus USD1.0957 late Tuesday. Against the yen, the dollar edged up to JPY118.38 versus JPY118.26.
Gold was quoted at USD1,916.44 an ounce early Wednesday, lower than USD1,926.06 on Tuesday. Brent oil was trading at USD102.26 a barrel, up from USD101.36 late Tuesday.
By Lucy Heming;Â lucyheming@alliancenews.com
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