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(Alliance News) - Stock prices in London are seen opening lower on Wednesday as investors digested a fiery and acrimonious US presidential debate that descended into chaos, ahead of November's election.
In early company news, oil major Royal Dutch Shell said it expects to make a substantial amount of job cuts in light of the coronavirus crisis on the oil industry. Caesars Entertainment made a firm offer for bookmaker William Hill. UK energy regulator Ofgem set its sights on PayPoint.
IG futures indicate the FTSE 100 index is to open 24.00 points lower at 5,873.50. The blue-chip index closed down 30.43 points, or 0.5%, at 5,897.50 on Tuesday.
Royal Dutch Shell said it expects third-quarter production to be between 820,000 and 860,000 barrels of oil equivalent per day, while sales volumes are expected in a range between 4 million and 5 million barrels per day.
The Anglo-Dutch firm sees upstream output in a range between 2.15 million to 2.25 million barrels of oil per day. Akin to the second quarter, the Upstream unit's adjusted earnings are expected to show a loss.
Shell said it expects to make job reductions of 7,000 to 9,000 by the end of 2022 following the plunge in oil demand. The "reduced organisational complexity" along with other measures, Shell said, are expected to deliver sustainable annual cost savings of between USD2.0 to USD2.5 billion by 2022.
In addition, the oil major expects a post-tax impairment charge in the range of USD1.0 to USD1.5 billion for the third quarter.
William Hill said it has reached an agreement with suitor Caesars Entertainment to acquire the UK bookmaker. Caesars will offer 272 pence in cash, valuing the high street bookmaker at GBP2.9 billion.
"The William Hill board believes this is the best option for William Hill at an attractive price for shareholders. It recognises the significant progress the William Hill group has made over the last 18 months, as well as the risk and significant investment required to maximise the US opportunity given intense competition in the US and the potential for regulatory disruption in the UK and Europe," said William Hill Chair Roger Devlin.
Ofgem said PayPoint has included exclusivity clauses in most of its contracts with energy suppliers and retailers, limiting their ability to use rival services and thus excluding PayPoint's competitors from the market.
Ofgem said PayPoint has "abused" its dominant market position in the market for over-the-counter payment services for prepayment energy customers for at least the period running from April 2009 to October 2018.
"At this stage of the investigation, our findings are provisional and no conclusion should be drawn that there has been an infringement of competition law at this stage. We will carefully consider any representations from the company before deciding whether the law has in fact been broken," Ofgem said.
Meanwhile in the US overnight, Democrat Joe Biden told a raging President Donald Trump to "shut up" in an opening debate that turned almost immediately into a shouting match 35 days ahead of the most tense US election in recent memory.
The debate in Cleveland, Ohio, was as bad-tempered as had been feared, with Trump leading the way in yelling over his challenger and the Fox News moderator Chris Wallace alike.
At times, neither Biden nor Wallace could get a word in, as Trump loudly touted his economic record and went after Biden's son Hunter over his work for a Ukrainian gas firm.
At one point an exasperated Biden, who leads strongly in the polls, turned to Trump and said: "Will you shut up, man!" Hours before the Cleveland showdown, Biden published his own tax returns - and at the debate demanded that Trump do likewise.
Trump insisted at the debate that he has paid "millions" in taxes.
"The event was described by some as 'chaotic' as both candidates were regularly interrupting each other. Biden attacked the US leader on his handling of the pandemic, while Trump questioned the Democratic candidates' ability to have done a better job in the circumstances. The Donald did not confirm that he will leave the White House peacefully should he lose the election as he seems to be suspicious of postal voting. European indices are called lower," summed up CMC Markets analyst David Madden.
The pound was quoted at USD1.2835 early Wednesday, lower than USD1.2859 at the London equities close Tuesday.
The UK economy's second-quarter slump was not as bad as first estimated, according to the latest figures from the Office for National Statistics on Wednesday.
On an annual basis, UK gross domestic product fell by a revised 21.5% in the three months to June, having contracted 1.7% in the first quarter of 2020. The second-quarter reading was revised to a slightly smaller annual decline from the original estimate of 21.7%.
On a quarterly basis, UK GDP shrank by 19.8%, revised from the initial estimate of a 20.4% fall, having contracted 2.2% in the first three months of 2020. The quarterly figure was in line with the consensus estimate. The ONS said this was the largest quarterly contraction in the UK economy since quarterly records began in 1955.
UK Prime Minister Boris Johnson's controversial Brexit legislation, enabling the UK to break international law, has cleared the House of Commons.
MPs voted 340 to 256, majority 84, in favour of the UK Internal Market Bill at third reading, despite warnings that the "law-breaking" legislation threatens the Union and the country's global reputation.
Ministers have defended powers contained in the legislation, which gives them the opportunity to override the Brexit divorce deal. They argue such powers are needed to protect the relationship between Great Britain and Northern Ireland, amid concerns in Westminster that Brussels could seek to disrupt food goods travelling from Britain to Northern Ireland as part of trade talks.
The euro was priced at USD1.1733 early Wednesday, down from USD1.1741 at the European equities close Tuesday. Against the yen, the dollar was trading at JPY105.50, soft compared to JPY105.61.
Brent oil was quoted at USD41.21 Wednesday morning, up from USD41.08 a barrel at the London equities close on Tuesday. Gold was quoted at USD1,890.01 an ounce, marginally lower against USD1,892.11.
The Japanese Nikkei 225 index closed down 1.5%. In China, the Shanghai Composite is up 0.3%, while the Hang Seng index in Hong Kong is up 1.1%.
Factory activity in China improved slightly in September, according to official data, showing a small rebound in the economy ahead of the week-long National Day public holiday.
The purchasing managers' index is a key gauge of manufacturing activity in the world's second-largest economy, which has largely bounced back after plunging in February because of tough coronavirus measures.
In September, the PMI figure increased slightly to 51.5 after slipping to 51.0 in the previous month. Any figure above the 50-point mark represents growth while below it signals a contraction.
The economic calendar for Wednesday has US ADP employment is due at 1315 BST and GDP at 1330 BST.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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