(Alliance News) - Stock prices in London are seen opening higher on Friday as an EU summit to discuss a proposed EUR750 billion rescue fund gets underway.
In early company news, Irish support services firm DCC said trading in the first quarter continued to improve, but was not as good as last year due to severe lockdown restrictions in place. Home emergency cover provider Homeserve said it was unaffected by lockdown restrictions and expects to deliver a solid performance for the financial year.
IG futures indicate the FTSE 100 index is to open 15.61 points higher at 6,266.30. The blue-chip index closed down 41.96 points, or 0.7%, at 6,250.69 on Thursday.
DCC said trading in the first quarter ended June 30, was resilient and ahead of expectations, although behind the prior year due to the lockdown during April and May.
DCC said operating profit in the DCC LPG unit was behind the prior year due to weakness in commercial and industrial volumes, particularly in Britain and Ireland. The DCC Retail & Oil division performed well in the quarter, driven by good performances from both the British and Danish businesses, it added.
Operating profit in DCC Technology was behind the prior year, although trading improved steadily through the quarter, DCC said. The company added that DCC Healthcare performed strongly during the quarter, with operating profit well ahead of the prior year.
Looking ahead, DCC said it has a diverse and resilient business model, leading market positions and an extremely strong balance sheet. The company also said it is well-positioned to continue its growth and development into the future.
"Although a seasonally quieter period for the group, I have been pleased with the performance of each of DCC's divisions during the quarter. The trading performance of the group has been very resilient, considering the significant challenges presented by the necessary restrictions. The improving performance through the quarter has meant we have recommenced selective organic development capital expenditure to ensure we are in a position to capture any opportunity for market share gains during this period," said Chief Executive Donal Murphy.
Homeserve said its Membership businesses, policy renewal and mid-term cancellation rates have continued in line with historic trends in a "traditionally quieter period" spanning April to mid-July.
The home repairs and improvements company said it has felt no effects from the Covid-19 pandemic saying "customer satisfaction is at record highs", reflecting strong service levels during the pandemic. Further, M&A activity has restarted, it said, with a strong pipeline of targets and four profitable acquisitions completed in May and June, with the most significant of these bringing 38,000 new policy customers in Spain.
Homeserve added that it continues to expect to deliver a solid performance in financial 2021.
Essentra said its US subsidiary Essentra FZE has agreed to pay a USD666,543 fine to the US Department of Justice for a scheme to supply North Korea with tobacco products.
The settlement resolves a 2018 investigation that found that two employees of Essentra FZE, who were subsequently dismissed by the company, knowingly agreed to participate in unauthorized transactions.
"A very thorough and in-depth investigation has been carried out to fully understand the root cause of the issues we have seen. We have made a very significant investment of both time and money, which has now equipped us with enhanced protection against any potential future issues of this nature," said Essentra CEO Paul Forman.
Anglo-Australian miner Rio Tinto left its annual guidance unchanged after posting mixed second-quarter production figures.
Bauxite and iron ore output grew in the three months to June 30, though there was a double-digit fall in titanium dioxide slag production, figures from the miner showed.
Rio did edge its capital expenditure forecasts higher as the bite from Covid-19 eased and the US dollar weakened.
The euro was changing hands at USD1.1429 early Friday, firm from USD1.1419.
All eyes will be on the crunch meeting of EU leaders in Brussels on Friday and Saturday, at which they will wrangle over a proposed EUR750 billion recovery fund to kickstart the bloc's battered economy.
"Funds will be deployed to countries that have been hardest hit. The current proposal is that EUR500 will be handed out as grants, while the remaining EUR250 billion will be dispensed as loans. The 'frugal four', The Netherlands, Sweden, Denmark and Austria, oppose such a large percentage of the funds being allocated as grants without conditions. The likes of Spain and Italy would benefit from the current proposal, so the old north-south divide pops up again. There is no doubt the region needs a financial boost, but nothing is likely to be agreed upon soon," said CMC Markets analyst David Madden.
The Japanese Nikkei 225 index ended down 0.4%. In China, the Shanghai Composite is down 0.3%, while the Hang Seng index in Hong Kong is up 0.6%.
"Overall, short-term flows appear to be dominating Asian markets with no overriding theme apparent. Investors seem to have one eye on the door for the weekend. We would expect much the same to be evident in European markets ahead of the EU leaders' summit later today," said OANDA analyst Jeffery Halley.
The pound was quoted at USD1.2562 Friday morning, down from USD1.2607 at the London equities close on Thursday.
The UK government on Thursday said it will partially ease a two-week-old local lockdown imposed on the central English city of Leicester, after the number of new coronavirus cases had fallen. However, Health Secretary Matt Hancock told lawmakers that indicators of Covid-19 in the city remained well above the average seen across England and in surrounding areas. The mixed picture meant restrictions on schools, early years childcare and non-essential retail stores will be relaxed from July 24, he added.
Against the yen, the dollar was trading at JPY107.18 early Friday, marginally firm from JPY107.11 on Thursday afternoon in London.
Brent oil was trading at USD43.18 a barrel Friday morning, lower than USD43.72 Thursday evening. Gold was quoted at USD1,799.11 an ounce, down from USD1,805.00 an ounce.
In the economic calendar, there is a eurozone consumer price index and construction output prints at 1000 BST. In the US, there is a Michigan consumer sentiment index reading at 1500 BST.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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