(Alliance News) - Stock prices in London are seen opening higher on Wednesday following a strong finish on Wall Street overnight, as investors look ahead to the latest US ADP job figures.
In early company news, the coronavirus crisis put a dent in the annual earnings of housebuilder Barratt Developments. IT services firm Computacenter was bullish over its prospects and pizza chain Domino's Pizza made its interim finance chief permanent.
IG futures indicate the FTSE 100 index is to open 46.35 points higher at 5,908.40. The blue-chip index closed down 101.52 points, or 1.7%, at 5,862.05 on Tuesday.
Barratt Developments reported a fall in annual earnings as the UK's largest housebuilder said Covid-19 had a "significant impact" on its results.
For the financial year ended June 30, revenue fell 28% to GBP3.42 billion from GBP4.76 billion last year and pretax profit almost halved to GBP491.8 million from GBP909.8 million.
Total completions fell 29% to 12,604 homes from 17,856 last year, while Covid-19-related costs came to GBP74.3 million.
In terms of current trading, Barratt said it has seen a substantial increase in home completion volumes in the eight weeks to August 23, which were up 62% compared to the prior period at 1,439 homes due to "pent up demand".
Barratt had previously announced that an ordinary dividend or special dividend for financial 2020 would not be paid in light of the coronavirus crisis, having paid a 46.4 pence dividend last year. The company said Wednesday that "given the unprecedented impact of Covid-19 and the importance of a resilient balance sheet" it will no longer propose the financial 2021 special dividend of GBP175 million which would have been payable in November 2021.
"We are pleased that since the start of the new financial year we have seen our production increase, constructing the equivalent of 347 homes in the week ending 23 August 2020 and we are on track to deliver our planned output. Based on current market conditions, construction activity levels and assuming no further lockdowns, we expect to grow wholly owned completions to between 14,500 and 15,000 homes in FY21, and in addition around 650 completions from our joint ventures, whilst ensuring we maintain our industry-leading standards of quality and service," said Chief Executive David Thomas.
Computacenter said the successful trading performance seen in the first half of the year has continued for the first two months of the second half.
The IT services provider said "it has become clear" that the likely outturn for the year as a whole will be "materially above" the company's previous expectations. It will report interim results next Wednesday.
Domino's Pizza said Neil Smith has been appointed as chief financial officer on a permanent basis. Former Ei Group CFO Smith was appointed as Domino's interim CFO in April.
Ryanair Holdings reported August traffic of 7.0 million passengers, down 53% from 14.9 million last year. The Irish carrier said it operated 60% of its normal August schedule, with a 73% load factor.
In the US on Tuesday, Wall Street ended higher, with the Dow Jones Industrial Average up 0.8%, S&P 500 up 0.8% and Nasdaq Composite up 1.4%. Both the S&P 500 and Nasdaq finished at fresh record highs.
"A lack of positive news weighed on European equity markets yesterday and the FTSE 100 was the underperformer of the bunch. Keep in mind the London market was closed on Monday as it was a UK bank holiday, and continental markets finished lower that day, so it was like the British market was playing catch-up yesterday - it traded at its lowest level since mid-May. Meanwhile, the bullish run on US tech stocks continued as the NASDAQ 100 outperformed and set another record close. The S&P 500 set a record close too," said CMC Markets analyst David Madden.
The pound was quoted at USD1.3380 early Wednesday, down from USD1.3414 at the London equities close Tuesday.
UK Prime Minister Boris Johnson will face the wrath of MPs when he returns to the Commons after presiding over a series of U-turns that have soured Conservative backbench opinion towards the government's handling of the coronavirus pandemic.
He will face critics from both sides of the House on Wednesday during his first Prime Minister's Questions since Parliament's summer recess began on July 22.
As MPs started returning, Johnson insisted his government has not been blown off course by Covid-19, but acknowledged that "sometimes it is necessary" to change direction in "response to the facts as they change".
The euro stood at USD1.1900, lower from USD1.1946. Against the yen, the dollar was trading at JPY106.07, flat from JPY106.00.
Gold was quoted at USD1,963.51 an ounce early Wednesday, down from USD1,974.90 at the London equities close Tuesday. Brent oil was quoted at USD46.00 a barrel from USD45.86.
The Japanese Nikkei 225 index ended down 1.4%. In China, the Shanghai Composite is up 1.6%, while the Hang Seng index in Hong Kong is down 0.3%.
Japan's ruling party will vote on September 14 on Prime Minister Shinzo Abe's replacement, an official confirmed Wednesday, as powerful chief cabinet secretary Yoshihide Suga consolidated his frontrunner status in the race.
The Liberal Democratic Party's general council approved the date at a meeting, with candidate registration set for September 8, an official told AFP.
In Wednesday's economic calendar, there are eurozone producer prices at 1000 BST and US ADP national employment report at 1315 BST.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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Dominos (DOM)
Barratt Developments (BDEV)
Computacenter (CCC)