Last checked at 
(Alliance News) -Â Stocks in London are set to extend gains on Thursday as US Federal Reserve Chair Jerome Powell managed to soothe fears over runaway inflation and sooner-than-expected policy tightening.
"After last night's record close for the Dow and subsequent rebound in the S&P500 and Nasdaq, markets here in Europe look set to open higher encouraged by the prospects of a continued reopening, and central banks that are in no hurry to pare back their stimulus attempts, as Asia markets reversed yesterday's declines," said Michael Hewson, chief market analyst at CMC Markets.
In early UK company news, Associated British Foods guided to a half-year profit fall with trading at low-cost fashion retailer Primark hit by virus restrictions, while St James's Place said it will pay its withheld 2019 final dividend. BAE Systems similarly caught up on dividends.
IG says futures indicate the FTSE 100 index of large-caps to open up 16.33 points, or 0.2% higher at 6,675.30 on Thursday. The FTSE 100 closed up 33.03 points, or 0.5%, at 6,658.97 on Wednesday.
Wall Street ended in record territory on Wednesday, with the Dow Jones Industrial Average ending up 1.4%, the S&P 500 up 1.1% and the Nasdaq Composite up 0.8%.
On his second day of Congressional testimony, US Federal Reserve Chair Jerome Powell reiterated his view that the US labour market has a long way to go as it recovers from jobs lost in the pandemic and that the central bank is likely to maintain its ultra-easy monetary policy for the foreseeable future.
Jeffery Halley at Oanda commented: "Apart from highlighting something already mentioned here previously, that cost/push inflation as the global recovery gathers pace would be transitory (one-off rises in components of the CPI drop out after a year), Powell emphasised that employment targets were far away and that monetary policy would remain lower for longer.
"That was enough for the perpetual circling dip-buyers in multiple asset classes to re-emerge from hiding. Equities abruptly reversed their losses and powered higher."
The mood was lifted further as analysis by US regulators showed Johnson & Johnson's single-dose vaccine protects against Covid-19.
The US Food & Drug Administration scientists confirmed that overall the vaccine is about 66% effective at preventing moderate to severe Covid-19. The agency also said J&J's shot - one that could help speed vaccinations by requiring just one dose instead of two - is safe to use.
On Friday, the agency's independent advisers will debate whether the evidence is strong enough to recommend the long-anticipated shot. Armed with that advice, the FDA is expected to make a final decision within days.
In yet more positive vaccine news, Pfizer's jab has proven 94% effective in a study involving 1.2 million people in Israel, the first peer-reviewed real world research confirming the power of mass immunization campaigns to bring the pandemic to a close.
The paper, which was published in the New England Journal of Medicine on Wednesday, also demonstrated there is likely a strong protective benefit against infection, a crucial element in breaking onward transmission.
In Asia on Thursday, the Japanese Nikkei 225 index closed up 1.7%. Against the yen, the dollar firmed to JPY106.02 versus JPY106.00.
In China, the Shanghai Composite is up 0.6%, while the Hang Seng index in Hong Kong is up 1.3%. The S&P/ASX 200 in Sydney closed up 0.8%.
In early UK company news, Associated British Foods guided to a sharp fall in half-year sales for fashion retailer Primark given virus restrictions in the period.
AB Foods said Primark's sales for the 24 weeks to February 27 are estimated to be around GBP2.2 billion, down sharply on GBP3.7 billion a year ago. The FTSE 100 constituent noted that the majority of Primark stores were shuttered during November and from the end of December, estimating the loss of sales while stores were closed to be around GBP1.1 billion.
"When stores were open, trading continued to be strong, with sales at minus 15% on a like-for-like basis compared to last year. This performance should be seen in the context of lower category spend and lower footfall reflecting government advice to limit journeys from home," the company said.
Primark's adjusted operating profit for the half-year should be "marginally above break-even", compared to a profit of GBP441 million a year ago.
"Our estimate for the sales which will be lost during the second half of our financial year in respect of the remaining periods of store closures is some GBP480 million, with a loss of contribution, after cost mitigation, of GBP170 million," the company added.
Other segments fared better in the period. AB Foods said it expects revenue and profit in each of its Grocery, Sugar, Agriculture and Ingredients businesses to be ahead of both expectation and the first half of last year.
However, as a consequence of the restrictions placed on Primark, AB Food expects half-year sales, adjusted operating profit and adjusted earnings per share for the group to be lower than last year.
Wealth Manager St James's Place reported an underlying cash result of GBP264.7 million for 2020, a touch above consensus, which lay at GBP260.2 million, but below 2019's GBP273.1 million. Pretax profit tumbled to GBP426.4 million from GBP708.9 million.
Cirencester-headquartered St James's Place had already reported on its fund performance for 2020. In late January, the FTSE 100 constituent said it ended last year with GBP129.34 billion in funds under management - a record for the company - compared to GBP116.99 billion at the same point a year before.
St James's Place said the withheld final dividend for 2019 of 11.22 pence will be paid as an interim dividend during the first quarter of 2021. The firm proposed a final dividend of 38.49p, with this being the firm's only dividend for 2020, versus a total payout of 49.71p for 2019, a figure that includes the withheld final dividend no set to be paid.
"At the outset of the pandemic the board made the difficult decision to withhold 11.22 pence of the 2019 final dividend, until such time when the financial and economic impact of Covid-19 became clearer. I am pleased to report that we have not needed to utilise those funds and, whilst the pandemic is still on-going, we now have the confidence to pay this withheld amount as a further interim dividend during the first quarter," said Chief Executive Andrew Croft.
He added: "In the near term, whilst we are encouraged by the moderate growth in new business we have seen in the early weeks of 2021, the external environment remains challenging."
Aerospace and defence company BAE Systems declared a 23.7p dividend for 2020 and similarly said it additionally will pay 13.8p as a catch-up of the 2019 final dividend that had been deferred due to Covid-19. The announcement came as BAE report profit after tax in 2020 of GBP1.37 billion, down from GBP1.53 billion in 2019. Operating profit however edged up to GBP1.93 billion from GBP1.90 billion. BAE said it has an order backlog of GBP45.2 billion.
Hikma Pharmaceuticals reported growth in both revenue and profit for 2020.
Revenue for 2020 rose 6% to USD2.34 billion while pretax profit increased 14% to USD558 million from USD491 million. The firm declared a full-year dividend of 50 cents per share, up from 44 cents in 2019.
Injectables revenue grew 9% to USD977 million in 2020 with a core operating margin of 38.6% versus 38.0% in 2019. Generics revenue grew 3% to USD744 million with a core operating margin of 21.6% versus 17.2%.
Branded revenue grew 5% at constant currency to USD613 million with the core operating margin weakening to 20.6% from 22.1%.
For 2021, Hikma expects Injectables revenue to grow in the mid-single digits with a core operating margin in the range of 37% to 38%. Generics revenue is seen around USD770 million to USD810 million and a core operating margin around 20%. Branded revenue is expected to grow in the mid-single digits in constant currency.
Miner Anglo American reported a slip in 2020 earnings but lifted its final dividend.
Revenue for 2020 grew 3% to USD30.90 billion, with underlying earnings before interest, tax, depreciation and amortisation falling 2% to USD9.80 billion.
The firm declared a final dividend of USD0.72, up 53% on a year ago.
"The resilience of our diversified business, following the operational disruptions of the first half and benefiting from strong metals prices in the latter months, generated underlying Ebitda of USD9.8 billion, with an increased mining Ebitda margin of 43%," said Chief Executive Mark Cutifani.
"Our balanced investment programme is driving material business improvement, while also delivering margin-enhancing and sector leading volume growth of 20-25% over the next three to five years, that includes first copper production from Quellaveco in 2022. Together with our P101 and technology work, we are on track to deliver our targeted USD3-4 billion annual run-rate of incremental improvement by the end of 2022, also taking us towards our longer term target of a 45-50% mining Ebitda margin."
Released earlier on Thursday, Standard Chartered reported a sharp drop in profit for 2020, with both profit and income unable to match market consensus, but believes it is well placed to capture the benefits from a global economy returning to growth.
Chief Executive Bill Winters said: "We are weathering the health crisis and geopolitical tensions very well. We remain strong and profitable, although clearly impacted by credit challenges and low interest rates. Our strategic transformation continues to progress well, and our outlook is bright."
For 2020, the London-headquartered but Asia-focused bank recorded pretax profit of USD1.61 billion, down 57% from the USD3.71 billion reported in 2019. StanChart's profit mark came in below market consensus of USD1.85 billion.
StanChart shares in Hong Kong were down 2.0%.
Sterling was quoted at USD1.4138 early Thursday, higher than USD1.4100 at the London equities close on Wednesday. The euro traded at USD1.2170 early Thursday, up from USD1.2127 late Wednesday.
Gold was quoted at USD1,792.35 an ounce early Thursday, soft on USD1,796.20 on Wednesday. Brent oil was trading at USD67.42 a barrel, climbing from USD67.02 late Wednesday.
The economic events calendar on Thursday has eurozone consumer confidence figures at 1000 GMT. In the afternoon there are US GDP readings and the latest jobless claims numbers at 1330 GMT.
By Lucy Heming;Â lucyheming@alliancenews.com
Copyright 2021 Alliance News Limited. All Rights Reserved.
