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(Alliance News) - Stocks in London are set to steady on Friday at the end of a difficult week dominated by headlines about the Russia-Ukraine crisis.
In early UK economic data, the retail sector rebounded at the start of 2022 after a disappointing Omicron-hit December. UK retail sales rose 1.9% year-on-year in January after a 4.0% fall in December.
Sales were 3.6% above pre-pandemic levels at the start of 2022.
"It was a good month for garden centres, department and household goods stores, with particularly strong trading for furniture and lighting," said Darren Morgan, director of Economic Statistics at the Office for National Statistics.
Sterling was quoted at USD1.3625 early Friday, firm against USD1.3620 at the London equities close on Thursday.
In early company news, lender Natwest unveiled a GBP750 million share buyback programme as it swung to profit in 2021, and industrial property investor Segro topped net asset value forecasts.
IG says futures indicate the FTSE 100 index of large-caps to open up 15.73 points, or 0.2%, at 7,553.10 on Friday. The FTSE 100 closed down 66.41 points, or 0.9%, at 7,537.37 on Thursday.
"Yesterday saw another day of uncertainty and market declines on claims and counterclaims between Russia and NATO about the size and movement of Russian forces on the Ukrainian border," said Michael Hewson, chief market analyst at CMC Markets.
The US said Thursday that Russia is on the verge of unleashing a massive military attack against Ukraine, dismissing Moscow's claim to be pulling forces back, as artillery fire hit a Ukrainian kindergarten.
In a dramatic, previously unscheduled speech to the United Nations in New York, US Secretary of State Antony Blinken said intelligence showed Moscow could order an assault on its neighbour in the "coming days".
Russia denies any invasion plans but warned of "military-technical measures" if its far-reaching demands for a US and NATO pullback from eastern Europe aren't satisfied.
Investor sentiment took a hit from this in New York overnight, with the Dow Jones Industrial Average ending down 1.8%, the S&P 500 down 2.1%, and the Nasdaq Composite down 2.9%.
Losses moderated in the Asian session on Friday, however. The Nikkei 225 index in Tokyo closed down 0.4%. In China, the Shanghai Composite ended up 0.7%, but the Hang Seng index in Hong Kong was down 1.7% in late trade. The S&P/ASX 200 in Sydney fell 1.0%.
The US said late Thursday that Blinken and his Moscow counterpart Sergei Lavrov had agreed to meet next week – provided there was no invasion before then.
"This development looks set to see markets here in Europe open modestly higher on the basis that if the US and Russia continue to talk then the prospect of war has diminished for the time being," CMC's Hewson said.
In early UK company news, NatWest reported a profit for 2021 and said it plans to return GBP750 million to shareholders via a share buyback, and possibly even more.
Net interest income for 2021 rose 1.7% to GBP7.61 billion from GBP7.48 billion the year before, though a dip in non-interest income meant total income for the year was flat at GBP10.51 billion.
The lender swung to a pretax profit of GBP4.03 billion from a loss of GBP481 million the year before, benefiting from an impairment release of GBP1.28 billion versus an expense of GBP3.13 billion.
The impairment release "principally reflects releases in non-default portfolios and the low levels of realised losses we have seen across the year," the bank said.
Natwest laid out plans for a GBP750 million share buyback in the first half of 2022 and said it will consider further repurchases as part of its capital distribution approach. This was alongside a final dividend of 7.5p, more than double 3.0p the year before.
The state-controlled lender also said it will maintain capacity to participate in buybacks of shares held by the UK government.
For 2022, Natwest expects income excluding notable items to be above GBP11.0 billion in the 'go-forward group' - which excludes Ulster Bank RoI and discontinued operations - and it plans to invest around GBP3 billion over 2021 to 2023 while reducing operating costs.
"As our economy recovers and the trend towards digital services accelerates, we are investing to deliver long term value in the bank and drive sustainable growth. We will do this by building closer and deeper relationships with our customers and by supporting their evolving needs and expectations at every stage of their lives," said Chief Executive Alison Rose.
Warehouse property investor Segro reported an adjusted net asset value per share of 1,137 pence at the end of 2021, up 40% from 814p a year before. This beat company-compiled consensus of 998p.
Pretax profit for 2021 multiplied to GBP4.36 billion from GBP1.46 billion in 2020.
"2021 was a highly successful year for Segro as reflected in our full year results which include a GBP4.1 billion portfolio valuation uplift and record levels of rental growth. Investor and occupier supply-demand dynamics in the industrial and logistics sector remain very favourable, led by the long-term trends of digitalisation, supply chain resilience and an increasing focus on sustainability," said Chief Executive David Sleath.
GlaxoSmithKline said it has voluntarily paused enrolment and vaccination in the Grace phase three trial evaluating its potential respiratory syncytial virus maternal vaccine candidate, as well as two other trials investigating this candidate in pregnant women.
"This decision was made following a recommendation from the Independent Data Monitoring Committee based on an observation from a routine safety assessment. Monitoring safety signals is an integral part of the clinical development process for potential new vaccines," the pharmaceutical firm said, adding it will provide a further update in due course.
This decision does not affect the AReSVi 006 phase three trial for RSV older adults, with results from this study on track for the first half of 2022.
NortonLifeLock said it has postponed the closing of its merger with Avast to April, having been previously expected to close later this month.
NortonLifeLock said talks with competition bodies in the UK and Spain are ongoing. As a result of the delay, Avast said it plans to proceed with the payment of a 11.2 cent dividend. The closing is expected to be on April 4, delayed from February 24, with Avast shares delisted on April 5.
The euro traded at USD1.1372 early Friday, unchanged versus USD1.1370 late Thursday.
Against the yen, the dollar edged up to JPY115.06 from JPY115.02. The yen eased after data showed Japan's core consumer prices edged up just 0.2% in January, slightly less than expected, though the increase was the fifth monthly rise.
The core consumer price index, which excludes volatile fresh food prices but includes fuel costs, was up 0.2% in January year-on-year, following similar rises from September to December. The advance follows 18 months of declines or stagnation during the depths of the pandemic, but it fell slightly short of economist expectations for a 0.3% rise.
Safe-haven asset gold softened as risk mood improved into the end of the week. The shining metal was quoted at USD1,891.83 an ounce early Friday, lower than USD1,895.50 on Thursday.
Brent oil was trading at USD92.41 a barrel early Friday, soft on USD92.65 late Thursday.
By Lucy Heming; lucyheming@alliancenews.com
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