(Alliance News) - Stock prices in London were seen opening lower on Friday as the US Federal Reserve vowed to focus on inflation as a top priority, prompting fears the central bank could raise interest rates more aggressively than previously thought.
Meanwhile, figures early Friday showed the UK economy grew faster than expected in November prior to the onset of the Omicron variant of Covid-19.
In early company news, credit checking agency Experian reported an upbeat third quarter. Electronics retailer Currys struggled over Christmas but launched a share buyback. Luxury carmaker Aston Martin poached its new finance head from Vivo Energy.
IG futures indicate the FTSE 100 index is to open 26.85 points lower at 7,537.00. The blue-chip index closed up 12.13 points, or 0.2%, at 7,563.85 on Thursday.
Experian said its third-quarter performance was at the upper end of expectations.
For the three months to December 31, total revenue growth was 14% at actual exchange rates and 15% at constant exchange rates. Organic revenue growth was 11%.
Looking ahead, Experian expects full-year organic revenue growth of 12% to 13% and total revenue growth expected in the range of 16% to 17% at constant exchange rates. Further, Experian expects strong full-year earnings before interest and tax margin accretion at constant currency.
Currys said the technology market was challenging over Christmas, with uneven customer demand and supply disruption.
For the 10 weeks that ended January 8, group like-for-like revenue fell 5% compared to growth of 4% two year before.
Looking ahead, Currys expects to deliver full-year adjusted pretax profit of around GBP155 million. This would be flat on the year before. It posted adjusted pretax profit of GBP156 million in financial 2021.
The retailer also launched a share buyback programme of GBP75 million.
"The technology market was challenging this Christmas, with uneven customer demand and supply disruption. Against this backdrop, Currys' colleagues showed their resilience and the stronger business we've built. We gained market share, improved customer satisfaction, traded profitably, and can look ahead with confidence," Chief Executive Officer Alex Baldock said,
"Customer demand for some tech was strong. This was a gamers' Christmas, the year that virtual reality broke into the mainstream, and when consoles flew off the shelves. Oculus Quest 2 and PS5 were stars. Appliances large and small also enjoyed strong sales, as consumers continued to kit out their homes. Still, the overall UK tech market was down 10% compared to last year's peak period," he added.
Bellway said John Tutte will join the board as non-executive chair designate on March 1. He will succeed Paul Hampden Smith, who will retire from the board as chair on April 1. Tutte was previously CEO and chair at housebuilding peer Redrow.
Aston Martin Lagonda Global Holdings appointed Doug Lafferty as chief financial officer. Laffterty is currently CFO of FTSE 250-listed fuels and lubricants distributor Vivo Energy. Lafftery will be appointed to the board as an executive director in summer 2022.
Vivo said the search for a new CFO is underway and a further update will be announced in due course.
In the US on Thursday, Wall Street ended sharply lower, with the Dow Jones Industrial Average down 0.5%, S&P 500 down 1.4% and Nasdaq Composite down 2.5%.
"I'm very concerned about the high level of inflation," Fed Governor Lael Brainard said at her nomination hearing before the Senate Banking Committee. Brainard, whom President Joe Biden nominated to serve as vice chair of the central bank, said most forecasts show prices are likely to stay high for the first half of the year and come down later in 2022.
Many economists expect three rate hikes this year, but St Louis Federal Bank President James Bullard said this week policymakers might have to be more aggressive and raise four times.
Another regional Fed president, Raphael Bostic of Atlanta, said he was open to hiking the base rate as early as March.
In Asia on Friday, the Nikkei 225 index in Tokyo closed down 1.3%. In China, the Shanghai Composite ended down 1.0%, while the Hang Seng index in Hong Kong was down 0.6%. The S&P/ASX 200 in Sydney closed down 1.1%.
"Because of the weakness in US and Asia markets today's European open looks set to be a weaker one, with the focus on US retail sales for December, where we'll see how much of an impact the Omicron outbreak has had on consumer demand before Christmas," explained CMC Markets analyst Michael Hewson.
Chinese exports surged in 2021 on solid global demand as countries reopened, official data showed Friday, bumping China's overall trade surplus to a record high and providing a much-needed boost to the stuttering economy.
The world's second-biggest economy saw a quick rebound from the coronavirus last year - after cases first surfaced in a central city in late 2019 - allowing factories to operate and feed global appetite for electronics and medical supplies. That led to a 30% spike in exports last year, helping push the annual trade surplus to USD676 billion, customs data showed.
The surge came on the back of an uptick in shipments of mechanical and electronic products, customs spokesman Li Kuiwen said.
Although China "handed in a dazzling report card" in the face of challenges, Li told reporters Friday that the economy "faces triple pressures of demand contraction, supply shock and weakening expectations".
The pound was quoted at USD1.3720 early Friday, down from USD1.3738 at the London equities close Thursday.
UK economic growth picked up in November, with gross domestic product exceeding its pre-pandemic size for the first time, according to the Office for National Statistics on Friday.
UK GDP advanced 0.9% in November from October, accelerating from month-on-month growth of 0.2% in October. The November print beat the market estimate, cited by FXStreet, of 0.4% growth. The ONS said the monthly figure for GDP is estimated to be above its pre-coronavirus pandemic level of February 2020 for the first time.
The euro was priced at USD1.1460, down from USD1.1471. Against the Japanese yen, the dollar was trading at JPY113.70, down from JPY114.05.
Brent oil was quoted at USD84.87 a barrel on Friday morning, up from USD84.80 late Thursday. Gold stood at USD1,827.30 an ounce, higher against USD1,817.65.
Friday's economic calendar has US retail sales at 1330 GMT.
In Friday's US corporate calendar, major banks Citigroup, JPMorgan and Wells Fargo all report fourth-quarter results, as does asset manager BlackRock.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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