(Alliance News) - Stock prices in London are seen opening higher on Tuesday, tracking gains in Asian equity markets, as high-level trade talks between the US and China draw near.
In company news, budget airline easyJet benefited from strikes at rivals British Airways and Ryanair in the fourth quarter, recruiter PageGroup's third quarter was hurt by Brexit and US-China trade war uncertainty and sportscar maker Aston Martin made board changes.
IG futures indicate the FTSE 100 index is to open 16.02 points higher at 7,213.90. The blue-chip index closed up 42.50 points, or 0.6%, at 7,197.88 on Monday.
easyJet said it delivered a solid performance in the fourth quarter, with strong customer demand driving outperformance.
The airline said it expects to deliver annual pretax profit for financial 2019 in a range between GBP420 million and GBP430 million. This is in the upper half of the company's previously guidance range but down from GBP445 million the year before.
In addition, easyJet reported passenger numbers were up 8.6% to 96 million in the year that ended September 30, while the load factor for the year is to decrease by 1.4 percentage points to 91.5%, the company added.
Total revenue per seat at constant currency for the second half will increase by 0.8%, which was an outperformance compared to easyJet's previous guidance. The company attributed the performance to "yield optimisation self-help initiatives" in the fourth quarter and increased demand due to strikes at rivals British Airways and Ryanair Holdings.
easyJet added that first quarter financial 2020 forward bookings are in line with the first quarter of financial 2019.
"As a result of our self-help initiatives and the increased demand due to disruption at British Airways and Ryanair, we anticipate achieving headline profit before tax for the full year 2019 of between GBP420 million and GBP430 million, in the upper half of our previous guidance range," CEO Johan Lundgren said.
Recruiter PageGroup said its third quarter was hurt by political and economic uncertainty in its larger markets, including Greater China, the UK and France.
For the quarter ended September 30, gross profit was up 4.2% to GBP216.7 million at constant currency profit was up 2.1%.
Third quarter gross profit Europe, the Middle East & Africa was up 7%, the Americas region was up 17%. However in the UK gross profit was down 4.1% and in the Asia Pacific region it was down 4.0%.
Chief Executive Steve Ingram said: "Looking ahead, the deterioration in trading conditions seen during Q3 across the majority of our regions is anticipated to continue. In the UK, heightened Brexit related uncertainty is expected to remain as we approach and go beyond 31 October.
"With worsening macro-economic indicators in Continental Europe, particularly in Germany, and in the US, there are signs that growth in these markets may slow. In Greater China, confidence in Mainland China continues to be affected by trade tariff uncertainty and the social unrest in Hong Kong is increasing."
In light of these challenges, PageGroup expects financial 2019 operating profit to be in the range of GBP140 million to GBP150 million. Last year, operating profit was GBP142.5 million.
Aston Martin Lagonda Global Holdings said shareholder group Adeem and Primewagon named two non-executive directors to the board. Mahmoud Samy Mohamed Aly El Sayed and Amr AbouelSeoud are to join immediately. The sports car maker said non-executives Najeeb Al Humaidhi And Saoud Al Humaidhi are to step down.
Hong Kong Exchanges & Clearing has pulled out of its bid to buy the operator of the London Stock Exchange, it said overnight Tuesday.
HKEX made a GBP29.6 billion offer, or GBP31.6 billion including debt, for London Stock Exchange Group in mid-September. The bid was rejected later that month.
LSEG had said it saw "fundamental flaws" in the approach, and also noted any combination would come under intense scrutiny from a variety of regulators.
The Japanese Nikkei 225 index closed up 1.1%. In China, the Shanghai Composite is up 0.7%, while the Hang Seng index in Hong Kong is up 0.4%. The Shanghai market reopened Tuesday after being shut for a week for the Golden Week holidays. Hong Kong also reopened on Tuesday after being closed for holiday on Monday.
Chinese business activity expanding at its quickest pace in five months in September, the Caixin general services purchasing managers' index showed.
The composite PMI, which covers both manufacturing and services, rose to 51.9 in September from 51.6 in August, its best performance since April.
Caixin said the improvement was helped by improved manufacturing output, despite a softer rise in activity in the services sector.
Meanwhile, the latest round of high-level trade talks are due to begin on Thursday. Beijing's top trade envoy Liu He will meet with US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin, the White House said in a statement on Monday.
US President Donald Trump said Monday he would prefer to strike a comprehensive trade bargain with China, in comments days before top US and Chinese officials are due to resume trade talks in Washington.
But with little sign the two sides have made progress in bridging the distance between them, speculation has mounted in recent months they may reach a deal which addresses only some of Washington's extensive grievances.
"I think it's not what we prefer at all. My inclination is to get a big deal," Trump told reporters when asked if he could accept a partial agreement.
The pound was quoted at USD1.2297 early Tuesday, lower than USD1.2321 at the London equities close Monday.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
Copyright 2019 Alliance News Limited. All Rights Reserved.
easyJet (EZJ)
PageGroup (PAGE)
Aston Martin Lagonda (AML)