(Alliance News) - Stock prices in London are seen opening higher on Friday, with sentiment on the up ahead of a key US jobs report, shaking off hefty declines for US tech shares overnight.
IG futures indicate the FTSE 100 index is to open 54.1 points, 0.7%, higher at 7,582.94. The large-cap index closed down 54.16 points, or 0.7%, to 7,528.84 on Thursday. The FTSE is up 0.8% so far this week.
In early UK corporate news, travel food and beverage outlets operator SSP said the emergence of the Omicron variant has hit sales in recent weeks. Real estate investment trust Shaftesbury also noted a "short period of disruption caused by Omicron restrictions". Africa-focused telecommunications services provider Airtel Africa said earnings have grown so far in its financial year.
On Thursday, the BoE lifted the Bank Rate by 25 basis points and came within one vote of a 50 basis point hike.
The ECB President Christine Lagarde, meanwhile, said risks to the inflation outlook were tilted to the upside. Although the ECB left monetary policy, investor focus has turned to later meetings and the prospect of an interest rate hike this year, something the central bank once labelled as unlikely.
Analysts at Danske Bank said the "ECB is very likely to join the hiking club later this year".
"After the hawkish ECB meeting yesterday, we changed our ECB call and now expect the ECB to hike the deposit facility rate by 25bp in December and in March 2023, which will bring the deposit facility rate to 0%," analysts at Danish financial services firm commented.
The pound advanced following the BoE decision, but has since given back some ground. The euro has continued in ascent.
The pound was quoted at USD1.3586 early Friday, down from USD1.3616 at the London equities close on Thursday. The euro stood at USD1.1453, up from USD1.1425. Against the yen, the dollar was trading at JPY114.99, up from JPY114.85.
Back in London, Upper Crust-owner SSP said overall sales in the eight week to January 30 were at 57% of pre-virus levels.
In the first nine weeks of its financial year, which runs to September 30, 2022, sales had been at 66% of 2019 levels.
"The spread of the Omicron variant around the world and the subsequent government restrictions have inevitably had an impact on passenger numbers in many of our market," SSP explained.
"Trading remained resilient during December and throughout the holiday period, before softening in early January."
Fortunes recently have been "more encouraging", however, as government curbs are lifted.
SSP noted that during its first quarter, it was profitable at an underlying earnings before interest, tax, depreciation and amortisation level.
"Whilst the Omicron variant continues to have some impact on trading, we are confident in our ability to manage any short-term volatility and, subject to no further government restrictions being introduced, we are well positioned for the important summer trading period. Our medium-term expectations, which are for a return to like-for-like revenues and Ebitda margins at broadly similar levels to 2019 by 2024, remain unchanged," SSP said.
Shaftesbury, a REIT focused on London's West End region, also noted an Omicron hit but said its occupiers have "weathered" disruption.
A rebound in "confidence and activity" continued through the crucial pre-Christmas trading period. However, Omicron's emergence led to short-term disruption due to government curbs and staffing issues.
The UK government turned to 'plan B' measures to help stem the spread of the variant.
"Rent collection has continued to improve. For the quarter to 31 December 2021, we have collected 88% of contracted rents to date, 10% remains outstanding and 2% has been waived, with our rental support now only being granted on an exceptional case-by-case basis," Shaftesbury said.
Collection rates in January, meanwhile,"reflected the short-term trading and cash flow reduction" caused by Omicron. Collection rates for the month are currently at 77%.
Shaftesbury's EPRA vacancy rate at December 31 improved to 5.1% of its portfolio measured by estimated rental value from 6.0% at the end of September.
Among London-listed large caps, Airtel Africa said earnings in the nine-month period to December have jumped.
Third-quarter revenue rose 18% annually to USD1.22 billion from USD1.03 billion. Pretax profit was 49% higher at USD297 million from USD200 million.
For the nine months, revenue was up 23% to USD3.49 billion, while pretax profit surged 79% to USD864 million.
Airtel's customer base grew by 5.8% and now stands at 125.8 million.
"A strong third quarter has contributed to a pleasing nine-month financial performance across all key metrics," Chief Executive Segun Ogunsanya said.
The economic events calendar on Friday has UK construction PMI at 0930 GMT and the US nonfarm payrolls report at 1330 GMT.
According to FXStreet cited consensus, 150,000 jobs are expected to have been added in January, falling from 199,000 in December.
Wednesday's ADP figure showed employment decreased by 301,000 jobs, massively undershooting expectations of an addition of 207,000 jobs. In December, employment rose by 776,000, according to ADP.
Equities were higher in the Asia Pacific region. The Nikkei 225 in Tokyo rose 0.7% and the S&P/ASX 200 added 0.6%.
The Hang Seng in Hong Kong, having been closed since Monday, was up 3.3%. The stock market in Shanghai remained close on Friday as the Chinese New Year public holiday continues on the mainland.
In New York, the Dow Jones Industrial Average fell 1.5% on Thursday. The S&P 500 declined 2.4% and the Nasdaq Composite tumbled 3.7%.
Meta plunged 26% after its poorly received quarterly results.
More positively, Amazon, which had lost 7.8% in the main trading session on Thursday, rose 14% after hours following a strong set of quarterly results.
Brent oil was quoted at USD91.38 a barrel early Friday, up sharply from USD89.45 at the London equities close on Thursday. Gold stood at USD1,807.94 an ounce, up from USD1,805.70.
By Eric Cunha; ericcunha@alliancenews.com
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