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(Alliance News) - Stock prices in London opened higher on Thursday, as investors digested a mixed set of UK company earnings.
The FTSE 100 index opened up 46.46 points, 0.6%, at 7,931.63. The FTSE 250 was 32.18 points, 0.2%, at 20,335.99, and the AIM All-Share was up just 0.1 of a point at 883.32.
The Cboe UK 100 was up 0.6% at 793.36, the Cboe UK 250 down 0.1% at 17,737.05, and the Cboe Small Companies was up 0.1% at 14,173.52.
In European equities on Thursday, the CAC 40 in Paris was up 1.1%, while the DAX 40 in Frankfurt was 1.2% higher.
Europe's largest economy saw inflation speed up slightly at the beginning of the year, according to preliminary figures.
Destatis said consumer prices in Germany rose 1.0% in January from the month before, reversing a 0.8% monthly decline in December. Annual inflation ticked up slightly to 8.7% from 8.6% at the end of 2022.
In Zurich, Credit Suisse fell 5.9%. The troubled Swiss lender posting an annual net loss of CHF7.29 billion, widening several-fold from CHF1.65 billion in 2021. It was the firm's biggest annual loss since the global financial crisis.
Net revenue plunged 34% to CHF14.92 billion from CHF22.70 billion.
Credit Suisse said its 2022 results were "significantly affected by the challenging macro and geopolitical environment with market uncertainty and client risk aversion", affecting client activity across all of its conditions.
Equities in New York had struggled on Wednesday. The Dow Jones Industrial Average closed down 0.6%, the S&P 500 down 1.1% and the Nasdaq Composite down 1.7%.
This came in the wake of several hawkish comments from Federal Reserve officials, stoking fears of persisted high interest rates and potential further hikes.
In comments reported by Bloomberg, Fed Vice Chair John Williams advocated for a "sufficiently restrictive stance of policy", adding that interest rates were "barely into restrictive territory".
"We're going to need to maintain that for a few years to make sure we get inflation to 2%, and then eventually over time we'll get interest rates presumably back to more normal levels," Williams said.
Fed Governor Christopher Waller added: "It might be a long fight, with interest rates higher for longer than some are currently expecting."
Meanwhile, Minneapolis Fed President Neel Kashkari warned there was "not yet much evidence, in my judgment, that the rate hikes that we've done so far are having much effect on the labour market".
Despite the hawkish rhetoric, the dollar was softer in early trade.
Sterling was quoted at USD1.2127, higher than USD1.2084 at the London equities close on Wednesday. The euro traded at USD1.0757, higher than USD1.0734. Against the yen, the dollar was quoted at JPY130.99, down from JPY131.29.
In the FTSE 100, Asia-focused bank Standard Chartered was the top performer, up 7.6%, while gambling operator Entain shed 11%.
In an earnings call on Wednesday, US casino operator MGM Resorts International confirmed it is no longer considering a takeover of Entain. "The simple answer on Entain is no; we've moved on," said MGM CEO Bill Hornbuckle.
Entain had rebuffed a takeover bid from MGM back in 2021. The two firms operate the BetMGM joint-venture together in the US.
AstraZeneca rose 4.1%, as the pharmaceutical firm swung to an annual profit.
Astra said total revenue in 2022 rose by 19% to USD44.35 billion from USD37.42 billion a year before, or by 24% at constant currency. Growth came from all therapy areas, as well as the addition of Alexion.
It swung to a pretax profit of USD2.50 billion from a loss of USD265 million, while core earnings per share jumped 26% to USD6.66. The pharmaceutical maker saw a weaker fourth quarter, however, as revenue fell by 7% to USD11.21 billion and core EPS fell by 17% to USD1.38. The lower revenue in the quarter was partly due to the decline in Vaxzevria, Astra said. Revenue excluding Vaxzevria rose 17%.
Looking ahead, Astra expects revenue in 2023 to grow at low-to-mid single-digit percentages at constant currency, or by low double-digit percentages excluding Covid-19 medicines. Core EPS is expected to see high single-digit to low double-digit growth.
Shore Capital said Astra's fourth-quarter EPS beat consensus. While Astra's forward guidance was in line with expectations, it "might disappoint" investors, the broker said.
British American Tobacco was down 4.1%. BAT reported a marginal rise in profit for 2022, as the cigarette maker navigated an "increasingly challenging" economic environment, but it noted that momentum in New Category was "strong".
In 2022, revenue grew 7.7% to GBP27.65 billion from GBP25.68 billion, despite lower volumes. The figure was below Vuma-cited market consensus of USD28.02 billion.
Cigarettes and tobacco heating products volumes fell by 4.2%. Pretax profit was up just 1.7% to GBP9.32 billion in 2022 from GBP9.16 billion in 2021.
It improved its total dividend by 1.0% to 217.80 pence from 215.60p a year earlier.
Looking ahead to 2023, BAT expects global tobacco industry volume to fall by around 2%. It expects mid-single figure constant currency adjusted earnings per share growth, which will be weighted towards the second half.
Unilever added 0.6%
The consumer goods firm said annual turnover rose 15% year-on-year to EUR60.07 billion from EUR52.44 billion, as pretax profit rose 21% to EUR10.34 billion from EUR8.56 billion. Underlying sales growth was 9.0%, driven by price growth, given that volumes fell 2.1%. In 2023, Unilever expects to deliver strong underlying sales growth.
Underlying price growth is expected to remain high, with volumes to fall in the first half, but said it is "too early to say" whether volumes will see positive growth in the second half.
Unilever expects 2023 underlying sales growth to be at least in the upper half of a 3% to 5% range.
"Despite sharp rises in material costs, we have prioritised stepping up our brand and marketing investment," said CEO Alan Jope.
According to interactive investor's Richard Hunter, the increased marketing spend shows Unilever "recognises the importance of keeping its brands in the mind of consumers". This is "despite price increases which run the risk of alienating cost-conscious shoppers".
In the FTSE 250, cybersecurity AI firm Darktrace rose 4.5%, as it closed its "largest deal-to-date".
The "multi-million dollar, multi-year" contract was signed with an unnamed "major" provider of critical infrastructure services.
Watches of Switzerland shed 5.7% in early trade.
The luxury watch firm reported double-digit growth in its financial third quarter ended January 29, as revenue rose 17% year-on-year to GBP407 million from GBP348 million. This was driven by luxury watches, "where demand continues to exceed supply".
For the whole of financial 2023, Watches expects to bring in revenue of GBP1.50 billion to GBP1.55 billion, with adjusted earnings before interest and tax to be between GBP163 million to GBP175 million. The guidance is on a pre-IFRS 16 basis, with a constant exchange rate applied to the fourth quarter. CEO Brian Duffy reports the firm's expansion into Europe is seeing "positive" early trading.
On AIM, Genedrive surged 34%.
The molecular diagnostics company said the UK's National Institute for Health & Care Excellence has preliminarily recommended its antiobiotic-induced hearing loss test for use in the National Health Service.
NICE's final guidance will follow a public consultation period, which will close on February 21.
In Asia on Thursday, the Nikkei 225 index closed down 0.1%. In China, the Shanghai Composite rose 1.2%, and the Hang Seng index in Hong Kong added 1.6%. The S&P/ASX 200 in Sydney closed down 0.5%.
Gold was quoted at USD1,884.81 an ounce early Thursday, higher than USD1,878.10 on Wednesday. Brent oil was trading at USD85.27 a barrel, edging up from USD84.01.
In the economic calendar, the US will publish its weekly unemployment insurance claims report at 1330 GMT.
By Elizabeth Winter, Alliance News senior markets reporter
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