(Alliance News) - The FTSE 100 is expected to open marginally higher on Wednesday, following positive updates from some UK blue-chip companies and ahead of a US consumer price index reading.
In early corporate news, Compass hiked its dividend by 60% and announced a GBP750 million share buyback programme. Melrose Industries raised its full-year guidance.
US inflation data will be released at 1330 BST on Wednesday.
In March, the US inflation rate was cooler than expected, fading to 5.0% in March from 6.0% in February. Markets are expecting the annual inflation rate remain at 5.0% in April, according to FXStreet.
Later in the week, the Bank of England will announce its latest interest rate decision at 1200 BST on Thursday.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: called up marginally at 7,766.10
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Hang Seng: down 0.6% at 19,744.52
Nikkei 225: closed down 0.4% at 29,122.18
S&P/ASX 200: closed down 0.1% at 7,255.70
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DJIA: closed down 56.88 points, or 0.2% at 33,561.81
S&P 500: closed down 18.95 points, 0.5%, at 4,119.17
Nasdaq Composite: closed down 77.37 points, 0.6%, at 12,179.55
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EUR: up at USD1.0972 (USD1.0955)
GBP: firm at USD1.2622 (USD1.2618)
USD: up at JPY135.39 (JPY135.09)
Gold: up at USD2,030.12 per ounce (USD2,025.96)
Brent: up at USD76.70 a barrel (USD74.94)
(changes since previous London equities close)
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ECONOMICS
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Tuesday's key economic events still to come:
08:30 EDT US CPI
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Germany's annual consumer price inflation eased to 7.2% in April from 7.4% in March. Month-on-month, inflation rose by 0.4%. "The rate of inflation has therefore slowed for the second month in a row but remains at a high level," said Ruth Brand, president of the Federal Statistical Office. "Looking at the basket of goods and services surveyed, food prices continued to be the biggest driver of inflation in April." On a European harmonised basis, annual inflation slowed to 7.6% in April from 7.8% in March. The April figure matched the earlier flash reading.
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BROKER RATING CHANGES
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Goldman Sachs cuts Kingfisher price target to 315 (320) pence - 'neutral'
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RBC raises HSBC price target to 800 (775) pence - 'outperform'
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UBS cuts Vodafone price target to 110 (115) pence - 'buy'
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COMPANIES - FTSE 100
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Melrose Industries said it traded materially ahead of expectations in the four months to April 30, with significant growth in revenue, profit and margin. For the first four months of 2023, revenue was up 19% on the same period in 2022, with Engines showing the fastest momentum, up 28%, and Structures up 14%. Looking ahead, Melrose now expects full-year revenue between GBP3.35 billion and GBP3.45 billion, adjusted operating profit between GBP340 million and GBP360 million, and adjusted Ebitda between GBP495 million and GBP515 million.
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Compass Group said revenue rose 36% to GBP15.7 billion in the half year that ended March 31 from GP11.5 billion a year earlier. Pretax profit rose to GBP831 million from GBP632 million. Compass declared an interim dividend of 15.0p per share, up 60% year-on-year from 9.4p. Compass also said that it will complete a GBP750 million share buyback programme. Looking ahead, Compass upped its full-year guidance. It now expects profit growth towards 30%, from above 20% previously, and revenue growth of about 18%, up from about 15% previously. "The group performed strongly in the first half of the year, benefiting from balanced growth across all regions. Net new business continued to be excellent, and significantly higher than our historical rate," said Chief Executive Officer Dominic Blakemore.
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COMPANIES - FTSE 250
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Asos said revenue fell to GBP1.84 billion in the six months ended February 28 from GBP2.00 billion a year earlier. It said this reflects "both deliberate actions on capital allocation to improve profitability and a challenging trading backdrop". Pretax loss widened to GBP290.9 million from GBP15.8 million a year ago. Adjusted Ebit margin in the first half of the year swung to negative 3.8% from positive 1.3% a year ago. Looking ahead, Asos said it will retain its focus on profitable sales into the second half of its financial year. It also expects financial 2023 sales to be down by low double-digit percentage at constant FX, excluding-Russia.
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National Express is changing its name to Mobico Group PLC from early June. It said this reflects the company's "international nature and its diverse range of mobility services, as it continues to lead the modal shift to mass transit." Operating subsidiaries will retain their customer-facing brands, and National Express will still be used for its UK national coach network. CEO Ignacio Garat said: "Whilst National Express is a highly valued consumer brand, Mobico better represents our multi-modal operations, global reach and future ambitions. We remain focused on providing best-in-class services and delivering our Evolve strategy, with the intent of establishing Mobico Group as the world's premier shared mobility operator."
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OTHER COMPANIES
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Toyota Motor reported annual revenue growth and set out an optimistic outlook for the new year. The carmaker said sales revenue in the year to March 31 improved 18% to JPY37.154 trillion, around USD274.54 billion, from JPY31.380 trillion. Net income, however, fell 13% to JPY2.493 billion from JPY2.875 billion. Attributable net income declined 14% to JPY2.451 billion from JPY2.850 trillion. Toyota's bottom line was hurt by other finance costs rising to JPY125.11 billion from JPY44.00 billion a year earlier. Total costs and expenses, meanwhile, were 21% higher at JPY34.429 trillion."While production plans fluctuated greatly due to the effects of tight semiconductor supplies, natural disasters, and Covid-19...dealers, suppliers and production sites have worked hard, leading to an increase of sales volume in all regions year-on-year," Toyota said.
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Alphawave IP said its auditor requires a "short amount of additional time" to complete its audit of the company's 2022 accounts. It is now expected that the results will be published in the week beginning May 15.
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By Sophie Rose, Alliance News reporter
Comments and questions to newsroom@alliancenews.com
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Kingfisher (KGF)
HSBC Holdings (HSBA)
Vodafone (VOD)
Melrose (MRO)
Compass Group (CPG)
ASOS (ASC)
Alphawave Ip (AWE)