Last checked at 
(Alliance News) - Stock prices in London are seen opening flat on Thursday as investors weigh an escalation of tensions between the US and China against hopes that a successful Covid-19 treatment can be found.
In early company news, information and events firm RELX and consumer goods firm Unilever kept their respective dividends unchanged, as RELX felt the effects of the coronavirus pandemic. Speciality chemicals firm Johnson Matthey reported a decline in first-quarter sales due to Covid-19's hit to car production.
IG futures indicate the FTSE 100 index is to open 4.00 points higher at 6,211.10. The blue-chip index closed down 62.63 points, or 1.0%, at 6,207.10 on Wednesday.
RELX posted lower interim revenue and profit as its exhibitions business was "significantly impacted" by Covid-19.
For the half-year ended June 30, revenue fell 10% to GBP3.50 billion from GBP3.89 billion the year before and adjusted pretax profit dropped 25% to GBP858 million from GBP1.14 billion.
RELX kept its interim dividend unchanged at 13.6 pence.
RELX highlighted that its Exhibitions unit, which accounted for 16% of revenue and 13% of adjusted operating profit in 2019, has been hurt significantly by Covid-19, as the pandemic forced countries to block public events and gatherings.
In the Exhibitions arm, first-half revenue of GBP201 million was less than a third of GBP684 million last year, and the business swung to an adjusted operating loss of GBP117 million from a profit of GBP231 million. The outlook for the remainder of 2020 for Exhibitions remains highly uncertain, RELX added.
"Our longer term strategic priority is unchanged: the organic development of increasingly sophisticated information-based analytics and decision tools that deliver enhanced value to our customers, supplemented by selective acquisitions of targeted data, analytics and exhibition assets that support our organic growth strategies," said Chief Executive Erik Engstrom.
Unilever said the effects of Covid-19 varied widely across all channels, regions and categories as consumers had more time to spend in the home and the importance of hygiene became more critical.
For the half-year ended June 30, revenue was EUR25.71 billion, down 1.6% from EUR26.13 billion the year before. Pretax profit rose 4.1% to EUR4.53 billion from EUR4.35 billion.
In addition, underlying sales declined 0.1% with volumes declining 0.3% but prices rising 0.2%. Developed markets grew 2.4%, whilst emerging markets declined 1.9%.
Unilever maintained its quarterly shareholder dividend at EUR0.4104 per share.
"As people spent more time in their homes, we saw growth in home consumption of foods, ice cream and tea. It also meant that consumers had fewer personal care occasions from going to work or socialising, and we saw a decline in our personal care business, except for hygiene products. The effectiveness of good hygiene practices against the spread of Covid-19 increased demand for our hand and home hygiene products, which each grew double digits," the company said.
Johnson Matthey said that despite a sharp decline in first-quarter sales it is seeing a recovery in customer demand and automotive production across its Clean Air unit, which provides emissions control.
The company said group sales were down materially at constant currency due to the effects of the Covid-19 pandemic. The decline was driven by Clean Air as a result of lower consumer demand and temporary manufacturing customer shutdowns, although sales in this sector steadily improved through the quarter.
Johnson Matthey said Clean Air sales were down 50% in the first quarter but improved throughout the period - down 75% in April, 60% in May and 20% in June. Looking forward it anticipates July sales to be down 20%, with improvement through the remainder of the second quarter.
Johnson Matthey said it continues to make progress in commercialising its eLNO material for fuel cells and anticipates soon having five customers in full cell testing.
The company added that it has started to deliver the additional efficiency benefits it recently outlined and expects initial benefits of at least GBP30 million this year.
"Visibility on demand remains limited, and we remain unable to provide financial guidance for the year ending 31 March 2021. However, we expect operating performance will be heavily weighted to the second half with first-half operating performance materially below last year, largely due to weaker activity in Clean Air," the company said.
US-China relations deteriorated once again on Wednesday as Washington ordered the closure of the Chinese consulate in Houston within 72 hours. Relations were already tense over the coronavirus pandemic and Beijing's crackdown in Hong Kong.
China slammed the US move, which came one day after the unveiling of a US indictment targeting two Chinese nationals for allegedly hacking hundreds of companies worldwide and seeking to steal virus vaccine research.
US President Donald Trump threatened more consulate closures, telling reporters "it's always possible".
In Beijing, Chinese foreign ministry spokesman Wang Wenbin said the order to close the consulate was an "outrageous and unjustified move which will sabotage China-US relations."
In the US on Wednesday, Wall Street ended higher, with the Dow Jones Industrial Average up 0.6%, S&P 500 also up 0.6% and Nasdaq Composite up 0.2%.
In China, the Shanghai Composite is down 1.0%, while the Hang Seng index in Hong Kong is up 0.3%. Financial markets in Japan are closed for Marine Day.
"Markets in Asia were more subdued this morning with Japan closed for a public holiday, while markets here in Europe look set to open slightly higher on the back of last night's modest recovery in US markets," said CMC Markets analyst Michael Hewson.
The pound was quoted at USD1.2741 Thursday morning, firm from USD1.2731 at the London equities close Wednesday.
The latest round of negotiations between teams led by the EU's Michel Barnier and UK Prime Minister Boris Johnson's Europe adviser David Frost will conclude on Thursday.
Number 10 played down the prospect of an imminent collapse in negotiations, with insiders saying the talks were "neither at a breakthrough nor a breakdown". But the Daily Telegraph earlier this week reported that the government's working assumption is that Britain will trade with Europe on World Trade Organisation terms - without a UK-EU deal - after the transition period ends on December 31.
The euro stood at USD1.1584, flat from USD1.1585. Against the yen, the dollar was trading at JPY107.15, flat from JPY107.17.
Brent oil was quoted at USD44.36 a barrel Thursday morning, up from USD43.72 a barrel at the London equities close Wednesday.
Gold was priced at USD1,869.70 an ounce early Thursday, up from USD1,861.40 an ounce at the London equities close Wednesday.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
Copyright 2020 Alliance News Limited. All Rights Reserved.
