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(Alliance News) - Stock prices in London are seen opening lower on Friday, after the pound got lift from European Commission President Jean-Claude Juncker insisting that UK and EU "can have a deal" before the Halloween deadline.
In early UK company news, Royal Bank of Scotland confirmed its selection of a new chief executive. On the earnings front, Smiths Group reported a strong performance in its financial year that ended July 31, while Investec warned of a slip in profit due to demerger costs.
IG futures indicate the FTSE 100 index - filled with dollar earners - is to open 36.62 points lower at 7,319.80. The blue-chip index closed up 42.37 points, or 0.6% at 7,356.42 on Thursday.
The pound was quoted at USD1.2575 early on Friday, almost a cent higher against USD1.2485 at the close Thursday, after the Bank of England had voted to keep its main interest rate at 0.75%.
The UK is set to leave the EU on October 31, even without a deal according to Prime Minister Boris Johnson. However, talks continue between the UK government and Brussels on agreeing an orderly departure as the clock ticks down.
"The pound did get a lift last night when European Commission President Jean Claude Juncker said that he would be prepared to get rid of the Irish backstop, if the UK can present viable alternatives that protect the integrity of the single market. This presents a significant shift of position by the commission which until recently had refused point blank any prospect that the withdrawal agreement could be changed," said CMC Markets UK Chief Market Analyst Michael Hewson.
Irish Prime Minister Leo Varadkar, who said he would meet UK Prime Minister Boris Johnson to seek agreement on the problematic Irish border issue.
"We were in touch today. I'm going to meet him next week in New York and try to get a deal," Varadkar said.
The leaders will both be attending the UN Climate Action Summit.
Last week in Dublin, the pair had their first meeting since Johnson became prime minister in July.
Their discussions were described as positive but the British government has yet to provide what the EU considers credible, alternative proposals to the backstop.
The BOE's Monetary Policy Committee decided unanimously to hold borrowing costs at a meeting held Wednesday, the BoE said in minutes published Thursday.
However, the BoE minutes struck a dovish tone, implying that persistent Brexit uncertainty could damp demand and inflation, leading to lower interest rates.
Unlike the European Central Bank and US Federal Reserve, which are both eased policy, the BoE is sitting tight as inflation weakens in the UK.
In the US on Thursday, Wall Street ended mixed, with the Dow Jones Industrial Average ending down 0.2%, the S&P 500 flat, and the Nasdaq Composite up 0.1%.
UK engineering firm Smiths Group reported double-digit profit growth in its most recently ended financial year, thanks to acquisitions and favourable foreign currency exchange rates.
The company delivered pretax profit of GBP376 million for the year to the end of July, up 13% from GBP333 million a year earlier, as revenue rose 7% to GBP2.50 billion from GBP2.33 billion.
Underlying revenue increased 3% during the year, with acquisitions and favourable foreign exchange translation each adding a further 2% to revenue growth.
"In this context of progress and confidence in the future, we announced plans to separate Smiths Medical to create two stronger, industry-leading companies," said Chief Executive Andy Smith. "The separation process is progressing well; we are on track for demerger by the end of the first half of 2020."
Rolls-Royce warned that the rate of recovery in Trent 1000 Aircraft On Ground is likely to be slower than it originally planned, due to the additional maintenance repair & overhaul load.
The aero-engine manufacturing company has faced a number of operating problems recently, including faster-than-expected deterioration of its Trent 1000 TEN jet engine blades.
Rolls-Royce, however, maintained its expectations that the 2019 negative impact of the Trent 1000 issues will be GBP450 million to GBP500 million.
As expected, Royal Bank of Scotland Group early Friday said it has promoted Alison Rose to be chief executive officer, replacing Ross McEwan, who will step down on October 31.
Rose currently serves as deputy CEO of NatWest Holdings and CEO of Commercial & Private Banking.
"Ross leaves a strong platform for his successor; a bank that has refocussed on its core markets in the UK and Ireland and resolved all its major legacy issues, while returning to profitability and paying dividends," said Chair Howard Davies.
"I am delighted that we have appointed Alison as our new CEO," continued Davies. "Following a rigorous internal and external process, I am confident that we have appointed the best person for the job."
Among mid-caps, Anglo-South African financial services firm Investec said it has made further progress on simplifying and focusing the business on growth over the long-term.
At August 31, third-party assets under management were up 6.7% on year to GBP178.4 billion, Investec highlighted.
However, the company expects its adjusted operating profit for the six months to the end of September to be slightly behind the year-earlier period due to "challenging market conditions". In addition, Investec said the costs incurred in relation to its proposed demerger are anticipated to hurt pretax earnings for the half-year by GBP42 million.
At the beginning of August, Investec confirmed the demerger and listing of Investec Asset Management, which is expected to complete in the first quarter of 2020.
"In spite of challenging trading conditions, the group remains well positioned for the long term and continues to concentrate on the execution of its strategy of simplification, focus, and disciplined growth," Investec said in its statement Friday.
In Asia on Friday, the Japanese Nikkei 225 index closed up 0.2%. In China, the Shanghai Composite is flat, while the Hang Seng index in Hong Kong is marginally lower.
Japan said on Friday that the nation's consumer prices rose 0.5% year-on-year in August, the slowest rate of increase in two years, despite the Bank of Japan's optimistic outlook.
The reading remained far off the 2% inflation target set by the central bank in April 2013.
Recent rises in the inflation rate have been supported by higher global energy prices. However, in August, energy prices were down 0.3%, according to the Ministry of Internal Affairs and Communications.
