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(Alliance News) - Stock prices in London are seen opening higher on Tuesday, ahead of a raft of central bank reports later this week and after data showed the UK unemployment rate ticked lower in October, meeting market expectations.
In early UK corporate news, Ocado received a legal boost, as its joint-venture with Marks & Spencer readies for a bumper Christmas. Telecom tycoon Patrick Drahi has lifted his stake in BT.
IG futures indicate the FTSE 100 index is to open 36.9 points, 0.5%, higher at 7,268.34 on Tuesday. The index closed down 60.34 points, 0.8%, at 7,231.44 on Monday.
Markets remain "shaky", analysts at Danske Bank said, adding investors will await a series of monetary policy updates before making big moves.
US stocks tumbled on Monday. The Dow Jones Industrial Average and S&P 500 both fell 0.9%, while the Nasdaq Composite dropped 1.4%.
"Asian markets are following the move lower this morning, with the Chinese property sector weighing on market sentiment," Danske Bank added.
In Asia on Tuesday, the Nikkei 225 in Tokyo fell 0.7%. The Shanghai Composite closed 0.5% lower, while the Hang Seng in Hong Kong was down 1.5% in late trade. The S&P/ASX 200 in Sydney closed marginally lower.
The dollar was stronger early Tuesday.
The pound was quoted at USD1.3206 early Tuesday in London, down from USD1.3230 late Monday. The euro stood at USD1.1273, down from USD1.1283. Against the yen, the dollar was trading at JPY113.65, up from JPY113.50.
The UK unemployment rate edged lower in October, data showed on Tuesday, edging closer to pre-virus levels.
Figures from the Office for National Statistics showed the UK unemployment rate was reduced to 4.2% in the three months to October, having sat at 4.3% in September. The October figure came in line with market consensus cited by FXStreet.
The UK jobless rate is now just 0.2 percentage point higher than it was before the pandemic.
October's labour force survey came shortly after the end of the UK's furlough scheme on September 30, the ONS explained.
CMC Markets analyst Michael Hewson said an unemployment report would typically give the Bank of England something to think about. However, Covid-19 restrictions have since been imposed to combat the spread of the Omicron variant.
"Recent events around the Omicron variant adding to the uncertainty, there is no guarantee that a decent set of unemployment numbers today, and another rise in headline CPI, will tee us up for a Thursday rate increase," Hewson commented before the release of the data.
Still to come on Tuesday is eurozone industrial production data at 1000 GMT and US producer prices at 1330 GMT.
In early corporate news, Ocado is looking forward to a busy festive period, with the grocer also boosted by a legal victory.
A US International Trade Commission patent case verdict, delivered on Monday, "has found in favour of Ocado", the company said.
The dispute was with Norwegian firm Autostore. In October of last year, Autostore had said it sued and already filed complaints in the US and the UK. Autostore accused Ocado's Smart Platform of infringing Autostore's patented technology.
Ocado Smart Platform is a storage and picking system used in fulfilment centres. Autostore's system is also used in warehouses.
A judge found that three of four Autostore patents are invalid, while a fourth has not been infringed.
"A fifth patent was abandoned by AutoStore the night before the trial. Ocado is pleased that the court has rejected AutoStore's attempt to use the ITC process to obstruct the development of Ocado's business in the United States," the FTSE 100-listed firm explained.
"Separately, Ocado continues actively to pursue its claims against AutoStore for infringement of Ocado's patents in both the United States and Europe. Ocado anticipates court determinations injuncting AutoStore and awarding Ocado damages for AutoStore's infringement of Ocado's patents."
On the trading front, Ocado Retail is braced for its "best-ever Christmas ahead".
In the fourth quarter ended November 28, retail revenue fell 3.9% annually to GBP547.8 million, though this was up 32% from 2019. Typical shopping baskets are getting smaller. While average orders per week increased 9% annually, order value fell 12%.
Ocado expects the M&S partnership's annual performance to be in line with guidance. For financial 2022, it expects revenue growth at the top of the pre-virus range of 10% to 15%.
Drahi's Altice lifted its stake in telecommunications firm BT to 18%, from 12% previously. Altice confirmed it has no plans to mount a takeover offer for BT.
Drahi said he holds BT's management in "high regard".
"We are pleased to take this opportunity to increase our shareholding in BT. Over recent months we have engaged constructively with the board and management of BT and look forward to continuing that dialogue," Drahi added.
In response, BT said: "The board and management of BT Group will continue to operate the business in the interest of all shareholders and remains focussed on the successful execution of its strategy and building on recent performance momentum."
Elsewhere in London, Drax Group said its Pinnacle Renewable Energy unit has taken on a bumper biomass supply deal.
Drax said Pinnacle has acquired Pacific BioEnergy's pellet sales contract book, adding 2.8 million tonnes of orders for sustainable biomass supply to third-party customers in Japan and Europe.
The contracts are for delivery between 2022 and 2030, with total incremental revenue over the period at CAD675 million, just shy of GBP400 million.
Drax is a power generator that uses biomass in its own furnaces and also sells it to third-parties.
Drax shares have risen over 50% so far this year. The FTSE 250 stock has a market value of just under GBP2.3 billion.
Gold fetched USD1,786.26 an ounce early Tuesday, down from USD1,788.71 at the London equities close on Monday. Brent oil was quoted at USD74.62 a barrel, down from USD75.05.
By Eric Cunha; ericcunha@alliancenews.com
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