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(Alliance News) - Stocks in London are expected to open higher on Wednesday, following a largely positive performance in New York.
US earnings season continues to ramp up, with Netflix jumping 8.7% in after-hours trade.
The streaming service reported strong growth in its quarterly revenue, an operating margin ahead of forecast and a record jump in subscriber numbers. Despite recent price hikes, Netflix said global paid streaming memberships rose around 13% to 260.28 million from 230.75 million the year before, with 13.12 million net adds in the quarter - its largest fourth quarter ever.
Meanwhile, there will be flash PMIs from the UK and Europe this morning. They are expected to indicate the nadir for private sector activity has passed, with the readings forecast to have improved from December. The US flash PMIs follow this afternoon.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: called up 17.7 points, 0.2%, at 7,503.43
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Hang Seng: up 2.2% at 15,689.85
Nikkei 225: closed up 0.8% at 36,226.48
S&P/ASX 200: closed up 0.1% at 7,519.20
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DJIA: closed down 96.36 points, 0.3%, at 37,905.45
S&P 500: closed up 0.3% at 4,864.60
Nasdaq Composite: closed up 0.4% at 15,425.94
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EUR: up at USD1.0866 (USD1.0835)
GBP: up at USD1.2707 (USD1.2660)
USD: down at JPY147.83 (JPY148.54)
GOLD: up at USD2,026.86 per ounce (USD2,023.60)
OIL (Brent): down at USD79.66 a barrel (USD79.92)
(changes since previous London equities close)
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ECONOMICS
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Wednesday's key economic events still to come:
10:00 CET eurozone flash composite PMI
09:30 CET Germany flash composite PMI
09:30 GMT UK flash composite PMI
07:00 EST US MBA mortgage applications
09:45 EST US flash composite PMI
10:30 EST US EIA Crude oil stocks
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UK MPs will have the chance to debate the UK's military action against Yemen-based Houthi rebels after Rishi Sunak warned of further airstrikes if attacks on shipping continue. The prime minister resisted calls to allow for a Commons vote after Britain and the US targeted sites linked to the Iran-backed group for the second time. But parliamentarians will on Wednesday be able to express their views on the action, which followed the first wave of joint strikes on January 11. Foreign Secretary David Cameron will head to the region in the coming days in a diplomatic bid to ease heightened tensions.
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Flights have been cancelled and trains suspended as Storm Jocelyn hits the UK – and forecasters say the worst weather is still to come. The severe weather caused major travel disruption and the storm is expected to be at its worst in the early hours of Wednesday – with a possibility that Met Office warnings are extended through the rush hour, the Met Office said. It comes after eight flights were cancelled at Dublin Airport and four at Glasgow Airport on Tuesday evening, train services in Scotland were suspended from 7pm and drivers were warned to postpone journeys.
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BROKER RATING CHANGES
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UBS cuts British American Tobacco to 'neutral' (buy) - price target 2,400 (2,900) pence
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COMPANIES - FTSE 100
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Rio Tinto said it has been informed by authorities that a plane carrying its employees crashed on its way to the Diavik mine, near Forth Smith, Northwest Territories, Canada. The crash resulted in fatalities, Rio Tinto said. "We are working closely with authorities and will help in any way we can with their efforts to find out exactly what has happened," said Chief Executive Jakob Stausholm. Separately, Rio Tinto said it has agreed to buy all electricity from the 1.1 gigawatt Upper Calliope solar farm to provide renewable power for its Gladstone operations. "The agreement will bring more renewable power into one of Australia's most important industrial hubs and marks another step towards Rio Tinto's climate goal of halving its global Scope 1 & 2 carbon emissions this decade," the miner said. It said under a new power purchase agreement with European Energy Australia, it will buy all power generated from the solar farm for 25 years. European Energy will build and operate the plant at a site about 50 kilometres south-west of Gladstone, pending approvals for development and grid connection. Once complete, the Upper Calliope solar farm has the potential to cut Rio Tinto's operating carbon emissions by 1.8 million tonnes per year.
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Flutter Entertainment said its shares listed on Euronext Dublin ceased trading on Tuesday, and will be delisted on Monday. The sports betting company plans to list on the New York Stock Exchange, saying last Thursday this is on track for Monday. It will keep a premium listing in London, remaining in the FTSE 100 index as a result.
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COMPANIES - FTSE 250
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abrdn announced a new transformation programme to bring about annualised cost savings of at least GBP150 million by the end of next year. The programme will include removing management layers, increasing spans of control, efficiencies in outsourcing and technology areas, as well as cutting overheads in group functions and support services. While most of the savings will come from non-staff costs, abdrn expects to cut around 500 roles. At the end of the second half of 2023, assets under management and administration eased to GBP494.9 billion, down from GBP495.7 billion at the end of June. Meanwhile, net outflows widened to GBP12.4 billion in the second half from GBP5.2 billion in the first half. For 2023 as a whole, it expects adjusted operating profit to be broadly in line with consensus, with adjusted capital general to be above consensus.
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JD Wetherspoon updated on its recent trading. In the 25 weeks to January 21, like-for-like sales rose 10% from the prior year. Bar sales were up 12%, food rose 7.9%, while slot/fruit machines rose 10%. Hotel room sales also rose 3.1%. The pub operator said total sales have grown 8.4% in the year to date. It expects debt levels at the end of financial 2024 to be broadly in line with the prior year-end level of GBP642 million. JD Wethersppon said it has a trading estate of 814 pubs. It said five pubs have been sold, with eight leasehold pubs having been surrendered to the landlord or sublet. It has opened two pubs in the year-to-date. It expects its outcome for the financial year to be in line with market expectations. Its half-year finishes on January 28, for which it will announce results on March 22.
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Diversified Energy noted the recent movement in its share price, blaming a short seller report. Its stock is down 28% over the past month, and 56% over the past six months. "The company and board of directors are aware of the recent opportunistic report published by a short seller which repeats previously stated claims that the company has already transparently and proactively addressed with investors and other stakeholders. This report contains numerous inaccuracies, ignores specific financial and operational results and sustainability actions, and is designed for the sole purpose of negatively impacting the company's share price for the short seller's own benefit," the company said. Diversified will continue to "focus on delivering long-term shareholder value, prioritization of outstanding debt reduction, and evaluating strategic growth and accretive value-additive opportunities," it said.
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Cutting International Distributions Services' Royal Mail's letter deliveries to five days a week or three are among options being put forward by the industry watchdog as it warned the universal postal service risks becoming "unsustainable" without reform. Ofcom said Britain's universal postal service "must modernise" as it outlined proposals for its overhaul following a review amid calls from Royal Mail to ditch Saturday letter deliveries due to slumping demand. It said two main options being mooted, cutting the six-day a week service to five days or three, although this would need government and parliament to change current laws, with another proposal being to overhaul first and second class and business services. This could see the introduction of a service where most deliveries take up to three days or longer, with a next-day service still available for any urgent letters.
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OTHER COMPANIES
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Quantum dot maker Nanoco confirmed it has received the second tranche of litigation proceeds from Samsung following last year's settlement for the alleged infringement on Nanoco's intellectual property. It has received a USD71.8 million net sum ."With receipt of these proceeds we can now finalise our plans for the significant return of capital to shareholders. The proceeds will also ensure that our commercial business is properly funded to take advantage of the growing commercial traction and development opportunities for our innovative platform technology," said CEO Brian Tenner.
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By Elizabeth Winter, Alliance News deputy news editor
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