Last checked at 
(Alliance News) - Stocks in London are set to pull back on Tuesday following a solid start to the week, taking a lead from price declines in Asia overnight and as markets eye New York's return from holiday.
Markets in the US were shut on Monday to observe Independence Day and will reopen on Tuesday.
In early UK company news, supermarket chain J Sainsbury raised its profit guidance after sales beat expectations across the board in the first quarter. Online grocer Ocado unveiled a slimmed interim loss and a new deal for its technology platform, with Spain's Alcampo. AstraZeneca received takeover clearance from the European Commission for its Alexion Pharmaceuticals deal.
IG says futures indicate the FTSE 100 index of large-caps to open down 23.91 points, or 0.3%, at 7,141.00 on Tuesday. The FTSE 100 closed up 41.64 points, or 0.6%, at 7,164.91 on Monday.
The pull-back in London comes after a largely downbeat performance in Asia overnight. The Japanese Nikkei 225 index ended up 0.2%, but in China, the Shanghai Composite was down 0.6%, while the Hang Seng index in Hong Kong was down 0.3%. The S&P/ASX 200 in Sydney finished 0.7% lower.
However, oil majors in London may get a lift as energy prices continued to climb amid an impasse among members of the OPEC+ cartel.
Brent oil was quoted at USD77.41 a barrel early Tuesday, rising from USD76.94 late Monday and continuing to trade around its best levels since late 2018.
This was after the 23 members of the OPEC+ group of oil producers cancelled a meeting scheduled for Monday that was supposed to overcome an impasse over crude output levels.
The meeting "has been called off", an OPEC statement said, quoting Secretary General Mohammed Barkindo.
At stake is a proposal that would see the world's leading oil producers raise output by 400,000 barrels per day each month from August to December. But that plan risks being delayed or even failing over a further proposal to extend a deadline on capping output to the end of 2022. Holding out against the new deal is the United Arab Emirates.
In early UK company news, J Sainsbury raised its profit guidance following a strong start to its financial year, with grocery, general merchandise and clothing sales all topping internal expectations.
First quarter like-for-like sales were up 1.6% on a year ago when stripping out fuel. Total sales were up 1.6% year-on-year and were 10% higher on a two-year basis.
Grocery sales were up 0.8% year-on-year and 11% higher compared with two years ago. General merchandise sales were down 1.4% year-on-year and clothing sales jumped 58%.
The FTSE 100-listed grocer noted the lower general merchandise sales against last year's "elevated levels", but said this was still ahead of expectations.
"Sales of grocery, general merchandise and clothing were all higher than our expectations throughout the quarter. Grocery sales benefited from higher in-home consumption due to continued Covid-19 restrictions. In addition, we continued to outperform competitors and grow market share, reflecting improved value, more innovation and better customer service," the grocer said.
Sainsbury's said it is using some of the profit boost from its sales outperformance to drive investment plans, particularly to improve its value position, meaning lower prices. It also noted tough comparables ahead as lockdown restrictions continue to ease.
Even so, it now expects to report underlying pretax profit of at least GBP660 million in the financial year to March 2022. Back in April, alongside the release of its annual results, Sainsbury's said it expected underlying pretax profit in the 2022 financial year to exceed the GBP586 million reported in the 2020 financial year, and was "comfortable" with consensus of around GBP620 million.
Online rival Ocado reported a slimmed half-year loss as it unveiled a partnership with Auchan Retail to develop Alcampo's online business in Spain.
Auchan Retail, which has operations across 13 countries, operates the Alcampo brand in Spain via a network of 310 stores with revenue totalling EUR4.5 billion in 2020. There has been a significant acceleration in online grocery shopping during the pandemic, Ocado said, and the partnership will allow Alcampo meet growing demand for competitively priced, high quality grocery e-commerce.
Ocado and Alcampo will initially build a customer fulfilment centre to serve the Madrid region from 2024, with additional automated warehouses to be announced at future dates. The fee structure with Alcampo is similar to that agreed with other international Ocado Solutions partners.
Ocado and Auchan Retail will also explore the potential to extend their partnership into other geographies.
"The appetite for our unique end-to-end platform remains strong as retailers look to take advantage of the channel shift which is now redrawing the landscape of the global grocery market," said Chief Executive Tim Steiner.
Separately, Ocado said revenue for the half-year to May 30 was GBP1.32 billion, up 21% from GBP1.09 billion a year ago, while the online grocer's pretax loss slimmed to GBP23.6 million from GBP40.6 million.
Sales growth in the period was driven by strong demand for Ocado Retail - its joint venture with Marks & Spencer - and the increased popularity of online grocery shopping in response to Covid-19.
Though uncertainty remains over the performance of Ocado Retail in the second half of the year as pandemic restrictions ease, Ocado said it is encouraged by its performance in the second quarter which showed a strong increase in customer transactions offsetting a normalisation in average basket value.
However, it now expects a GBP30 million lower earnings before interest, taxes, depreciation and amortisation contribution between the International Solutions, UK Solutions & Logistics and Other segments.
"Overall, taking into account the encouraging performance of Ocado Retail, with these incremental investments and other impacts we are maintaining our full year outlook and do not expect a material change to consensus group Ebitda forecast," it said.
AstraZeneca said its proposed takeover of Alexion Pharmaceuticals has received clearance from the European Commission. The pharmaceutical firm has received competition approvals in the US, Japan and other countries, though it is still awaiting clearance in the UK.
"We continue to progress towards the completion of the acquisition during this quarter," said Chief Financial Officer Marc Dunoyer.
Bridgepoint confirmed plans to float on the London Stock Exchange. The private equity firm - which was spun out of NatWest Group in 2000 - is looking to float at least a quarter of its shares to raise around GBP300 million from the IPO to fund growth plans, boost cash in its own funds, and pay down debts. It expects to be eligible for inclusion in FTSE indices.
Gold was quoted at USD1,804.50 an ounce early Tuesday, up from USD1,791.50 on Monday, as the dollar weakened.
Sterling was quoted at USD1.3895, up from USD1.3851 at the London equities close on Monday.
UK Prime Minister Boris Johnson has promised to tear up England's coronavirus regulations at the next stage of the road map.
Johnson has gambled on trusting the public's judgment and the protection offered by vaccines as he scrapped mandatory mask-wearing and lifted social distancing requirements. The so-called "freedom day" is expected on July 19, with a decision on whether or not to go ahead being taken a week earlier.
Under Step 4 of the easing road map, there will be no limits on social contact, meaning the end of the orders such as the "rule of six" and restrictions on guests at weddings and mourners at funerals. All remaining businesses will be able to reopen, including nightclubs, while capacity caps will be lifted and bars and restaurants will no longer be restricted to table service.
Meanwhile, Germany's health agency said on Monday five so-called virus variant countries would be reclassified as "high incidence areas", lifting a ban on entry for travellers from those nations who are not German residents or citizens.
The Robert Koch Institute said India, Nepal, Russia, Portugal and the UK would be reclassified from Wednesday, meaning any traveller will be able to enter as long as they observe quarantine and testing rules.
The euro traded at USD1.1892 early Tuesday, higher than USD1.1865 late Monday. Against the yen, the dollar was quoted at JPY110.81, flat versus JPY110.84.
In the economic calendar on Tuesday, there is a UK construction PMI reading at 0930 BST, and eurozone retail sales at 1000 BST. In the afternoon, there are US IHS Markit services PMI at 1445 BST and ISM services PMI at 1500 BST.
By Lucy Heming; lucyheming@alliancenews.com
Copyright 2021 Alliance News Limited. All Rights Reserved.
