(Alliance News) - Stock prices in London are seen opening flat on Thursday after high-level Brexit talks ended with little progress on Wednesday, as investors look ahead to the interest rate decision from the European Central Bank in the afternoon.
In early company news, packaging company DS Smith reported a fall in interim earnings but resumed dividend payments. Online grocer Ocado Group posted a rise in revenue as it benefited from the coronavirus pandemic.
IG futures indicate the FTSE 100 index is to open 1.61 points higher at 6,565.90. The blue-chip index closed up 5.47 points, or 0.1%, at 6,564.29 Wednesday.
DS Smith said it delivered a resilient performance in the first half despite a challenging environment and declared a shareholder payout in response.
For the six months to October 31, revenue was down to GBP2.89 billion from GBP3.19 billion a year before, and pretax profit plunged to GBP97 million to GBP213 million.
DS Smith said that, over the half-year period, there was an initial further reduction in paper prices as European corrugated demand fell during lockdowns and a temporary but sharp peak in old corrugated containers prices.
DS resumed dividend payments, declaring an interim payout of 4.0 pence
"While the economic and political environment remains uncertain due to Covid-19 and Brexit, we see continued momentum for our business, underpinning confidence in continued performance in line with our expectations for the year. Strong demand has driven ongoing paper price increases, supporting future box pricing, which, together with customer wins in Europe and the US and our strong position to benefit from attractive structural trends, reinforces our confidence in the business going forward," the company said.
Ocado Group posted a rise in fourth-quarter revenue, which it said reflected strong demand for online grocery during the coronavirus pandemic.
For the 13 weeks to November 29, retail revenue rose 35% to GBP579.6 million from GBP429.7 million in the fourth quarter last year. Average orders per week were 360,000 during the period, up 3.0% from 350,000 last year.
Looking ahead, Ocado expects full-year earnings before interest, tax, depreciation and amortisation to be more than GBP70 million.
"Despite exceptional demand during the period, we have high rates of on-time customer delivery and low rates of substitutions. This, together with our commitment to competitive prices and the freshest produce available, all delivered in a way that minimises handling and maximises hygiene, has strengthened our credentials as the UK online grocery market leader in terms of customer experience. With three new warehouses opening in 2021 which will ultimately give us 40% more capacity to our business, we look forward to being able to offer more slots to existing customers while welcoming new customers to Ocado and showing them what we can offer," said Melanie Smith, Ocado Retail's chief executive officer.
The pound was quoted at USD1.3322 Thursday morning, down from USD1.3382 at the London equities close Wednesday, after the latest UK economic data.
UK economic growth lost momentum in October against a backdrop of rising coronavirus cases, the Office for National Statistics said on Thursday. On a monthly basis, the UK gross domestic product grew 0.4% in October, easing from 1.1% growth in September. The reading was in line with expectations.
UK Prime Minister Boris Johnson and European Commission President Ursula von der Leyen gave themselves until Sunday to decide on the future of post-Brexit negotiations, after a three-hour dinner left the two sides "far apart".
Johnson came to Brussels on Wednesday in a last gasp effort to salvage trade talks that are teetering towards failure and the two leaders agreed that their negotiators should attempt one last push to bridge the divide.
"We had a lively and interesting discussion on the state of play across the list of outstanding issues," Von der Leyen said in a statement after the dinner at her Brussels' headquarters. "We gained a clear understanding of each other's positions. They remain far apart," she added.
The leaders agreed to further discussions by their negotiating teams "over the next few days" and that a "firm decision" should be taken by Sunday, a UK source said.
The euro was priced at USD1.2092, up from USD1.2080. Against the yen, the dollar was trading at JPY104.45, up from JPY104.27.
The Japanese Nikkei 225 index closed down 0.2% on Thursday. In China, the Shanghai Composite ended flat, while the Hang Seng index in Hong Kong is down 0.6%.
Brent oil was quoted at USD48.93 a barrel early Thursday, higher than USD48.72 a barrel at the London equities close Wednesday. Gold was trading at USD1,836.78 an ounce, lower from USD1,849.10.
The key event on Thursday is a monetary policy decision from the European Central Bank at 1245 GMT. This will be followed by a press conference with President Christine Lagarde at 1330 GMT. The central bank is widely expected to keep rates unchanged and expand its stimulus programme.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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Ocado (OCDO)
Smith (DS) (SMDS)