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(Alliance News) - Stock prices in London were mostly higher at midday on Thursday ahead of an expected 40-year high US consumer price index print, as the Biden administration sought to downplay the predicted rise.
Annual inflation is expected to have picked up to 7.3% in January from 7.0% in December, according to market consensus cited by FXStreet. The economic indicator is released at 1330 GMT.
"The data is incredibly important to the Federal Reserve's thinking on how fast interest rates will need to go up, and so the numbers are likely to move markets, particularly if the cost of living is going up fast," said AJ Bell's Russ Mould.
The FTSE 100 index was up 24.62 points, or 0.3%, at 7,668.04. The mid-cap FTSE 250 index was up 35.79 points, or 0.2%, at 22,219.80. The AIM All-Share index was down 4.01 points, 0.4%, at 1,091.05.
The Cboe UK 100 index was up 0.3% at 760.84. The Cboe 250 was up 0.1% at 19,856.08, but the Cboe Small Companies was 0.1% lower at 15,603.02.
In mainland Europe, the CAC 40 stock index in Paris was up 0.1% and the DAX 40 in Frankfurt was 0.3% higher.
"We expect a high yearly inflation reading in tomorrow's data," White House Press Secretary Jen Psaki told reporters. "Above 7%, as I think some are predicting, would not be a surprise."
President Joe Biden's approval ratings last year sank amid the spike in inflation caused by a combination of supply chain snarls, component shortages and the US economy's rebound from Covid-19. While the price increases were particularly severe for used cars and energy, particularly gasoline, they also hit items such as food and rent.
Psaki sought to downplay the high number expected for January. "What we're looking at is recent trends...the inflationary increases are decreasing month to month," she said.
The month-on-month increase in December CPI was 0.5%, less than the 0.8% rate a month prior.
"Leading outside forecasters continue to project that inflation is expected to decrease and expected to moderate over the course of this year," Psaki added.
In London, Informa was the best FTSE 100 performer, up 7.0%.
The business information publisher and events organiser said it would launch a share buyback and said it saw a strong performance through 2021. In addition, Informa agreed to sell Pharma Intelligence, the largest business within its Informa Intelligence division, to Warburg Pincus for GBP1.9 billion.
The buyback programme will commence with immediate effect and run through to the AGM in June. The maximum amount allocated to the initial tranche of the buyback programme will be GBP100 million, Informa said.
Ahead of its annual results on March 15, Informa said it expects to report trading in 2021 in line with guidance of GBP1.8 billion revenue and GBP375 million of adjusted operating profit. It posted revenue of GBP1.6 billion and adjusted operating profit of GBP267.8 million in 2020.
AstraZeneca was up 2.6% after the drugmaker said sales shot up in 2021, helped by its Covid-19 vaccine.
Revenue for 2021 rose 41% on a reported basis, and 38% at constant currencies, to USD37.42 billion from USD26.62 billion in 2020, lifted as product sales increased 41% to USD36.54 billion. Excluding Covid vaccine revenue, total sales for the year still rose a robust 26% to USD33.44 billion.
Despite the sales growth, Astra swung to a pretax loss of USD265 million for 2021 from a profit of USD3.92 billion in 2020. This was due to research & development costs jumping 63% to USD9.74 billion from USD5.99 billion and selling, general & administrative expense increasing 35% to USD15.23 billion from USD11.29 billion.
In 2022, Covid-19 medicine revenue is expected to decline by a low-to-mid twenties percentage, with an expected decline in sales of vaccine Vaxzevria being partially offset by growth in Evusheld, a Covid antibody treatment.
B&M European Value Retail was up 1.0% after RBC upgraded the variety retailer to 'sector perform' from 'underperform'.
Prudential was up 0.5%. The insurer said Chief Executive Officer Mike Wells intends to retire from his role at the insurer at the end of March 2022 and will not stand for re-election as a director at the next annual general meeting.
Prudential said it is conducting a search for a CEO to be based in Asia to succeed Wells, which includes both internal and external candidates. Wells became CEO in 2015, having previously led Prudential's US business Jackson.
Mark FitzPatrick, currently CFO and COO, will become interim CEO when Wells steps down. FitzPatrick has asked the board not to consider him for the permanent CEO role, the company said.
At the other end of London large-caps, Relx was down 3.0%, after the data analytics provider's earnings missed market forecasts.
For 2021, Relx generated revenue of GBP7.24 billion, up from GBP7.11 billion in 2020. However, the figure missed consensus estimates of GBP7.34 billion. Pretax profit was GBP1.80 billion, up from GBP1.48 billion in 2020, but was below forecasts of GBP2.1 billion.
Relx raised its annual dividend by 6.0% to 49.8 pence from 47.0p the year before and said it will launch a GBP500 million share buyback in 2022.
Looking ahead, the Anglo-Dutch firm expects 2022 full year underlying growth rates in revenue and adjusted operating profit, as well as constant currency growth in adjusted earnings per share, to remain above historical trends.
Unilever was down 1.2%. The consumer goods firm launched another large share buyback programme and promised to make no major acquisition in the "foreseeable future" after its failed tilt at the GSK Consumer Healthcare business.
For 2021, Unilever generated revenue of EUR52.44 billion, up from EUR50.72 billion in 2020. The figure was higher than the company-compiled consensus forecast of EUR52.11 billion. Pretax profit rose to EUR8.6 billion from EUR8.0 billion the year prior. Underlying operating profit was EUR9.6 billion, up from EUR9.4 billion in 2020.
Underlying sales growth was 4.5% in 2021, beating the consensus estimate of 4.3%. Unilever declared a quarterly dividend of EUR0.4268 per share, which results in 3% dividend growth for 2021.
The under-fire company also said it will conduct a share buyback programme of up to EUR3 billion over the next two years, which it expects to commence in the first quarter. This matches the amount of share buybacks the company completed in 2021.
In the FTSE 250, Darktrace was the best performer, up 4.5%, after the cybersecurity provider said it signed a "million-dollar deal" with an unnamed global electronics corporation.
The dollar was higher across the board. The pound was quoted at USD1.3547 at midday on Thursday in London, down from USD1.3551 at the London equities close Wednesday.
The euro was priced at USD1.1426, down from USD1.1437. Against the Japanese yen, the dollar was trading at JPY115.63, up from JPY115.44.
Brent oil was quoted at USD91.23 a barrel Thursday at midday, down from USD91.90 late Wednesday. Gold stood at USD1,835.80 an ounce, higher against USD1,830.69.
New York was pointed to a mostly lower start as earnings season continues and ahead of the US inflation reading.
The Dow Jones Industrial Average was called up 0.5%, but the S&P 500 was pointed down 0.1%, and the Nasdaq Composite down 0.3%, based on futures trading. The three indices had closed up 0.9%, 1.5% and 2.1% respectively on Wednesday.
Dow constituent Walt Disney shares were up 7.6% in pre-market trade after the entertainment company late Wednesday posted a hefty annual rise in subscriptions of its flagship streaming service.
In the three months to January 1, revenue jumped 34% to USD21.82 billion from USD16.25 billion a year earlier. Pretax profit jumped to USD1.69 billion from USD46 million. Revenue topped CNN cited consensus of USD20.3 billion.
Revenue in its Disney Media & Entertainment Distribution jumped 15%, while it more than doubled in the Disney Parks, Experiences & Products arm. Disney reported sharp subscriber growth in its Disney+ streaming service, beating Wall Street estimates. Subscribers grew 37% annually to 129.8 million from 94.9 million a year earlier.
Uber Technologies was up 5.3% in the pre-market Thursday. It swung to profit for the final quarter of 2021, leading to a massively narrowed loss for the year as a whole, driven by sharp revenue growth from both ride-hailing and food delivery.
For the fourth quarter ended December 31, the San Francisco, California-based firm posted net income of USD892 million, swinging from a loss of USD968 million the same period a year before. This was on revenue which grew 83% year-on-year to USD5.78 billion from USD3.17 billion, as gross bookings increased 51% to USD25.87 billion from USD17.15 billion.
In the US earnings calendar, there are fourth-quarter results due from soft drinks maker Coca-Cola, tobacco firm Philip Morris International and social media platform Twitter - its first without founder Jack Dorsey at the helm.
Philip Morris and Coca-Cola both reported higher fourth-quarter revenue and earnings per share. Twitter reported higher revenue but lower operating income.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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