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(Alliance News) - Stock prices in London are seen opening marginally higher on Tuesday, as a lack of detail about the trade deal struck between the US and China has tempered some of the euphoria that brought a record close on Wall Street on Monday.
In early company news, consumer goods firm Unilever said it expects sales growth in 2019 to be slightly below its prior expectations. Distribution firm Bunzl and oilfield services firm Hunting said trading is in line with expectations.
IG futures indicate the FTSE 100 index is to open 9.05 points higher at 7,528.10. The blue-chip index closed up 165.61 points, or 2.3%, at 7,519.05 on Monday, its best closing price since the beginning of August.
Unilever said it expects underlying sales growth for 2019 to be slightly below its guidance of the lower half of its 3% to 5% range.
The Dove soap maker attributed the guidance cut to challenges in some markets, including an economic slowdown in one of its largest markets, South Asia, and continued difficult trading conditions in West Africa.
Further, Unilever said trading conditions in developed markets continue to be challenging, and while there are "early signs of improving performance" in North America, a full recovery there will "take time".
Unilever added that earnings, margin and cash are not expected to be hurt.
"Due to challenges in certain markets, we expect a slight miss to our full-year underlying sales growth delivery. Looking ahead to 2020, growth will be second-half weighted. While we expect improvement in the first half of 2020 versus this quarter, we expect that first-half growth will be below 3%. Our full-year underlying sales growth is expected to be in the lower half of the multi-year range," Chief Executive Officer Alan Jope said.
Bunzl said annual trading expectations remain unchanged, consistent with slowing underlying revenue growth it flagged previously, due to mixed macroeconomic and market conditions in geographies where it operates.
Bunzl said revenue for 2019 is expected to have increased by between 2% and 3% at actual exchange rates. At constant exchange rates, revenue is expected to have risen by around 1% and underlying revenue flat from 2018.
In addition, Bunzl said it has bought Perth Australia-based emergency response supplies firm fire Rescue Safety Australia. It didn't disclose the purchase price.
Testings and inspection firm Intertek said it has entered the travel and tourism sector by acquiring security risk management business Check Safety First for an undisclosed sum. Intertek expects Check Safety First to generate around GBP10 million of revenue in 2019.
Hunting said it expects 2019 earnings before interest tax depreciation and amortisation remaining in the range of current market expectations. However, Hunting said this remains dependent on results for the month of December.
Hunting said it continues to trade profitably and generate cash and given the "strong capital discipline implemented throughout the year".
Elsewhere, Citigroup downgraded state-backed lender Royal Bank of Scotland to Neutral from Buy, and Investec cut merchant bank Close Brothers to Sell from Hold.
The pound was quoted at USD1.3253 early Tuesday, down from USD1.3329 late Monday, amid no-deal Brexit fears.
UK Prime Minister Boris Johnson is to legislate to prevent members of Parliament extending the Brexit transition period beyond the end of 2020, government sources said Monday.
Ministers are understood to have re-worked the Withdrawal Agreement Bill - due to come before the Commons this week - to "legally prohibit" any further extension.
The move comes as MPs gather at Westminster for the first sitting of the new Parliament on Tuesday following last week's general election victory for the Conservatives.
Under current plans, the government intends to end Britain's EU membership on January 31, with an implementation to run to the end of 2020 while it negotiates a free trade agreement with Brussels. However key EU figures - including chief negotiator Michel Barnier - have expressed scepticism a deal can be agreed in time, raising the fresh prospect of a no-deal break unless there is an extension.
The euro was quoted at USD1.1144 early Tuesday, firm from USD1.1139 late Monday. Against the yen, the dollar was trading at JPY109.55, soft against JPY109.65 at the London close Monday.
Brent oil was quoted at USD65.34 early Tuesday, lower than USD65.46 late Monday.
Gold was was quoted at USD1,476.87 early Tuesday, firm from USD1,473.50 late Monday.
In the US on Monday, Wall Street ended higher, with the Dow Jones Industrial Average up 0.4%, S&P 500 up 0.7% and Nasdaq Composite up 0.9%.
All three main US stock indices finished at record highs as investors cheered strong Chinese factory output data and the detente in the trading relationship between Washington and Beijing.
The Japanese Nikkei 225 index closed up 0.5%. In China, the Shanghai Composite closed up 1.3%, and the Hang Seng index in Hong Kong is up 1.1%.
The economic events calendar on Tuesday has UK unemployment data at 0930 GMT. The unemployment rate is expected to edge up to 3.9% from 3.8%.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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