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(Alliance News) - Stock prices in London are seen opening higher on Friday, with the pound lower amid Brexit deal jitters, but there was caution elsewhere ahead of the key US nonfarm payrolls report later in the day.
On the London Stock Exchange, Associated British Foods said it lost GBP430 million in autumn sales due to lockdowns forcing closures of its Primark retail arm. Housebuilder Berkeley posted a first-half earnings fall but outlined plans for a previously deferred GBP455 million to go towards "incremental new land investment or enhanced cash returns".
IG futures indicate the FTSE 100 index is to open 25.7 points higher at 6,515.97. The blue-chip index closed up 26.88 points, or 0.4%, at 6,490.27 on Thursday.
In mainland Europe, the CAC 40 in Paris is called down 0.1% and Frankfurt's DAX 30 is called 0.3% lower.
"US and European futures are trading with caution ahead of crucial data as traders do not want to get caught on the wrong side of the trade. There are also concerns about Pfizer’s supply chain for its coronavirus vaccine production. On top of this, we are also looking at much tighter restrictions taking place in some states in the US. California has announced that it will lock down its economy if critical-care in hospitals reach capacity," Avatrade analyst Naeem Aslam said.
AB Foods said sales since in the days since Primark fast-fashion stores lifted shutters once again have been "very strong".
"We have extended the opening hours during this festive season in most of our stores in the Republic of Ireland and England to cater for the anticipated higher customer demand and to help ensure a safer environment by spreading shopping hours over a longer period," Chair Michael McLintock will say at the diversified firm's annual general meeting Friday.
"Our estimate for the loss of sales for the announced periods of closure this Autumn is now some GBP430 million. The operating costs of the stores which were closed were reduced by some 25% during this period of closure. All orders placed with our suppliers have been honoured. In a small number of markets trading hours and store occupancy levels continue to be restricted and uncertainty about further temporary store closures in the short-term remains."
AB Foods expects both Primark's annual sales and profit to be higher year-on-year and, elsewhere, its Grocery, Sugar, Ingredients and Agriculture units are trading ahead of expectations.
Berkeley posted a 17% fall in pretax profit to GBP230.8 million in the six months ended October 31 from GBP276.7 million a year before.
Revenue slipped 3.8% to GBP895.9 million from GBP930.9 million. The company sold 1,104 homes during the period, down 21% from 1,389 a year earlier, though the average selling price rose 24% to GBP799,000.
Back in June, Berkeley deferred for up to two years a GBP455 million return of surplus capital, due to Covid-19 uncertainty. It had been due to be delivered by March 2021.
On Friday, the company confirmed the previously earmarked sum will now be delivered by the end of April 2023, "through either enhanced cash returns to shareholders, incremental land investment or a combination thereof".
During the half year, the housebuilder returned GBP171.4 million to shareholders, up 14% from GBP149.8 million a year earlier.
Elsewhere, Paddy Power-owner Flutter Entertainment on Friday said it raised GBP1.1 billion from a placing of its shares at 14,000 pence each, a 2.1% discount to its closing price on Thursday.
The cash will help fund a USD4.18 billion deal announced on Thursday to own nearly all of the FanDuel business, boosting its US exposure. Flutter said it will top up its stake in FanDuel - a fantasy sports, casino and horse racing business - by just over of 37%. It will have a 95% stake following the deal.
The move to boost its FanDuel stake comes as London-listed peers have received interest from the US or have moved to boost their exposure in the lucrative gambling market there. On Wednesday, 888 Holdings said it has penned "multi-year market access agreements" which will double the number of US states in which it operates.
Among the mid-caps, Pets At Home Group said it will repay the GBP28.9 million business rates relief it received through the Covid-19 pandemic.
"The aggregate result of Covid-specific costs and restrictions means that the financial impact of the pandemic on our business this year, currently estimated at over GBP35 million, will no longer be offset by the rates relief received," the animal products retailer said.
Japan's Nikkei 225 lost 0.2% on Thursday. China's Shanghai Composite ended the day up 0.1%, while the Hang Seng index in Hong Kong was up 0.2%.
"Today's key release is the non-farm payroll data for November. Consensus expects that another 475,000 jobs were created last month. The 'continuing claims' data yesterday showed that 5.5 million Americans are still claiming unemployment benefit and hence there is still some way until the unemployment has been brought down to pre-crisis levels," analysts at Danske Bank explained.
The ADP jobs report on Wednesday, a precursor, showed the US private sector employment increased by less than expected in November amid a resurgence of coronavirus infections.
Private sector employment increased by 307,000 jobs in November, below October's revised reading of 404,000 and undershooting expectations of 410,000, according to FXStreet consensus.
The nonfarm payrolls reports is due at 1330 GMT.
In economic data already out, German factory orders climbed 2.9% monthly in October, beating consensus estimates of a 1.5% rise.
Data from the Bundesbank showed a 1.8% annual rise in factory orders, a sizeable beat on market estimates which had tipped a 2% fall.
In September, factory orders fell 1.1% annually and rose 1.1% monthly.
The pound was quoted at USD1.3450 on Friday morning, down from USD1.3485 at the London equities close on Thursday. The euro stood USD1.2159 on Friday morning, up from USD1.2153.
Talks on a post-Brexit trade deal have suffered a blow, with the UK accusing the EU of making fresh demands at the 11th hour.
The UK's current trading arrangements with the bloc expire at the end of the month, leaving little time to get a deal agreed by negotiators and approved by the EU's leaders, Westminster and the European Parliament.
Hopes of an imminent deal appear to be fading after Thursday's negotiations in London between the teams led by David Frost and the EU's Michel Barnier.
Against the Japanese yen, the dollar was trading at JPY103.89, improved from JPY103.73.
Pfizer and partners BioNTech encountered supply chain challenges and have halved the number of vaccines they plan to distribute globally this year, the Wall Street Journal reported on Thursday.
The scaling up of the raw material supply chain took longer than planned, the WSJ explained, citing a spokesperson of Pfizer.
The partners planned to roll out 100 million jabs worldwide this year, but this has now been reduced to 50 million.
Brent oil fetched USD49.56 on Friday morning, improved from USD48.50 a barrel at the London equities close on Thursday.
Commodity traders took heart from news that members of the OPEC+ cartel struck a deal to increase production over the coming months, but by less than anticipated in their previous accord.
Gold was quoted at USD1,842.49 an ounce, up from USD1,826.52 at the London equity market close on Thursday.
By Eric Cunha; ericcunha@alliancenews.com;
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