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(Alliance News) - Stock prices in London are seen opening higher on Tuesday following a late rally in New York on Monday and despite political risks linked to Ukraine.
In early company news, automotive fluid storage manufacturer TI Fluid named a new chair while reporting a strong 2021 financial performance. Oil and gas firm Capricorn Energy was optimistic over its production targets. Pub operator Marston's said trading was hurt by Omicron.
IG futures indicate the FTSE 100 index is to open 58.05 points higher at 7,355.20. The blue-chip index closed down 196.98 points, or 2.6%, to 7,297.15 on Monday.
TI Fluid Systems expects 2021 revenue of EUR2.95 billion with a 7% adjusted earnings before interest and tax margin. It posted revenue of EUR2.81 billion and an adjusted Ebit margin of 6.2% in 2020.
TI Fluid Systems also said Chair Manfred Wennemer has decided to retire and step down immediately following the company's 2022 annual general meeting on May 18.
Wennemer will be succeeded by Senior Independent Director Tim Cobbold who joined the board in November 2019 and has over thirty years of experience in a variety of sectors, TI Fluid said. The company also said it was looking to recruit two new independent non-executive directors.
Capricorn Energy said it was encouraged by the initial operating performance of its newly acquired Western Desert assets in Egypt, with production growth ahead of expectations.
The company, formerly known as Cairn Energy, said that with the tax refund from the government of India due and active management of its asset portfolio, it is well positioned to continue delivery of its business model of returning value to shareholders, whilst building sustainable cashflow generation and growth.
Capricorn plans to return up to USD700 million of the India tax refund proceeds to shareholders. Of this, USD500 million will be returned to shareholders by way of tender offer, while USD200 million will be returned via an ongoing share repurchase programme.
In Egypt, 2021 production following completion of the acquisition in September, averaged 36,300 barrels of oil equivalent per day net to Capricorn's working interest. This was within the guidance range for working interest production of 33,000 to 38,000 boepd announced in March.
For 2022, Capricorn working interest production in Egypt is anticipated to average 37,000 to 43,000 boepd, with production growing throughout the year and 2022 exit rates forecast to exceed the top end of guidance range.
"We are actively pursuing opportunities to grow our producing asset base within our strict capital allocation criteria. With balance sheet strength and financial flexibility, Capricorn enters 2022 positioned to make another significant capital return to shareholders with the company having concluded all required steps to enable payment of the India tax refund," said Chief Executive Officer Simon Thompson.
Marston's said the emergence of the Omicron variant and subsequent UK government guidance to work from home temporarily hurt consumer sentiment.
For the 16-week period to January 22, like-for-like sales were down 3.9% compared to the same period in the 2019 financial year.
"From a geographic perspective, the group's pubs in Wales and Scotland were more significantly impacted than those in England by the tighter restrictions that were enforced during the period," Marston's said.
"Costs remain in line with the guidance provided at the preliminary results in November," it added.
Calls for a higher open for shares in London follow a late rebound in New York on Monday. The Dow Jones Industrial Average up 0.3%, S&P 500 up 0.3% and Nasdaq Composite up 0.6%.
Having spent most of Monday in the red, Wall Street stocks staged a feverish comeback ahead of a key Federal Reserve meeting after stumbling to multi-month lows that briefly took the S&P 500 into a correction.
Investors expect the Fed on Wednesday to line up a March rate hike and see three further hikes after this in 2022. The two-day meeting starts on Tuesday.
However, Asian equity markets have tumbled on Tuesday amid growing concern about Russia's troop build-up on Ukraine's border and warnings of a possible invasion.
The Japanese Nikkei 225 index closed down 1.7%. In China, the Shanghai Composite ended down 2.6%, while the Hang Seng index in Hong Kong was down 2.6%. The S&P/ASX 200 in Sydney closed down 2.5%.
US President Joe Biden declared "total" unity among Western powers on Monday, after crisis talks with European leaders on deterring Russia from an attack against Ukraine, while the Pentagon said 8,500 US troops were put on standby for possible deployment to boost NATO.
"I had a very, very, very good meeting - total unanimity with all the European leaders," Biden told reporters shortly after finishing a one hour and 20 minute video conference with allied leaders from Europe and NATO.
In London, UK Prime Minister Boris Johnson's office also said "the leaders agreed on the importance of international unity in the face of growing Russian hostility."
German Chancellor Olaf Scholz said "it is up to Russia to undertake visible de-escalation," while NATO Secretary General Jens Stoltenberg warned of "severe costs" if there is "any further aggression" by Moscow against Ukraine.
"As a result of yesterday's startling rebound in the US, markets here in Europe look set to open higher this morning, despite a negative Asia session, with the volatility set to continue, with the only US economic numbers of consequence being US consumer confidence for January," said CMC Markets analyst Michael Hewson.
The pound was quoted at USD1.3478 early Tuesday, up from USD1.3451 at the London equities close Monday.
The euro was priced at USD1.1310, marginally lower from USD1.1312. Against the yen, the dollar was trading at JPY113.73, down from JPY113.88.
Brent oil was quoted at USD87.00 a barrel Tuesday morning, up sharply from USD85.51 late Monday. Gold stood at USD1,842.11 an ounce, higher against USD1,833.82.
The economic calendar has Ifo's German business climate index at 0900 GMT and US consumer confidence at 1500 GMT.
The US Federal Reserve's first monetary policy meeting of the year gets underway on Tuesday, with a policy announcement on Wednesday at 1900 GMT and press conference with Fed Chair Jerome Powell at 1930 GMT.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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