(Alliance News) - Stocks in London are set to start the week on the front foot, tracking gains on Wall Street on Friday after Merck's positive Covid-19 drug test data boosted sentiment.
In early UK company news, Future said annual profit is seen at the top end of expectations. Plus500 guided to an earnings beat, and finnCap improved its full-year forecast revenue range. Airlines Ryanair and Wizz Air reported a jump in passenger numbers in September, ahead of relaxed UK travel rules, which came into force from Monday.
IG says futures indicate the FTSE 100 index of large-caps to open up 8.63 points, or 0.1%, at 7,035.70 on Monday. The FTSE 100 closed down 59.35 points, or 0.8%, at 7,027.07 on Friday.
In the US on Friday, the Dow Jones Industrial Average ended up 1.4%, the S&P 500 up 1.2%, and the Nasdaq Composite up 0.8%.
"US markets started the quarter strongly on Friday, boosted by positive results from a trial of Merck's oral Covid-19 treatment," said Jeffrey Halley, senior market analyst at Oanda.
Trial findings released on Friday showed Merck's antiviral drug reduces the risk of hospitalisation or death by about 50% in patients with mild or moderate Covid-19.
However, the mood was mixed in Asia on Monday. The Hong Kong market struggled after reopening from a three-day holiday weekend. Embattled property giant China Evergrande suspended trading in its shares pending an announcement on a "major transaction".
Officials at the firm have been coping with a crisis that has left it more than USD300 billion in debt, fuelling fears of a contagion for the wider Chinese economy that some warn could spread globally.
Markets in mainland China remained shut for the week-long National Day holiday, while the Hang Seng index in Hong Kong tumbled 2.3%.
The Nikkei 225 index in Tokyo closed down 1.1%. Japan's Parliament voted Monday to approve Fumio Kishida as prime minister, with the new leader expected to announce a cabinet including both holdovers and fresh faces.
The S&P/ASX 200 in Sydney ended up 1.3%, however.
"Australian markets are rallying strongly today, with iron ore futures rising 5.0% in Asia, and natural gas futures rising by 3.6%. However, it is banks leading the charge on an oversubscribed CBA buyback as holiday-thinned markets follow New York's lead," said Oanda's Halley.
Europe is set to take its lead from the US and Australian outperformance and start the week higher, he added.
Brent oil was trading at USD79.02 a barrel early Monday, up from USD78.44 late Friday. Gold was quoted at USD1,759.33 an ounce, up from USD1,757.98 on Friday.
Sterling was quoted at USD1.3549 early Monday, unchanged against USD1.3550 at the London equities close on Friday.
UK Prime Minister Boris Johnson has put the British public on notice to expect empty shelves in the run-up to Christmas as he said the economy was in a "period of transition" following Brexit.
On the opening day of the Tory Party conference in Manchester, the prime minister insisted the fuel crisis was finally "abating" after days of lengthy queues and filling stations running dry. But he repeatedly refused to say whether the shortages across the wider economy – due to a lack of lorry drivers and other workers – would be resolved in time for the festive season.
The euro traded at USD1.1600 early Monday, edging up from USD1.1592 late Friday. Against the yen, the dollar was flat at JPY111.03 versus JPY111.06.
In early UK company news, Future said it expects full-year profit to be at the top end of forecasts, as it also revealed that Chief Financial Officer Rachel Addison will step down.
The magazine publisher expects full-year adjusted operating profit to be at the top end of market expectations, placing the range of analyst forecasts between GBP183.5 million to GBP193.6 million. For the 2020 financial year, adjusted operating profit was GBP93.4 million.
"I am pleased to report that the continued successful execution of our strategy puts us on track to report another year of strong revenue and profit growth. I am confident that the acquisition of Dennis will help to accelerate our progress," said Chief Executive Zillah Byng-Thorne.
Meanwhile, Addison will step down as CFO at the end of October and will be succeeded by Penny Ladkin-Brand. Currently chief strategy officer, Ladkin-Brand previously had been Future's CFO for five years.
Plus500 guided to a full-year earnings beat following "further positive momentum" in the third quarter of 2021.
"This positive momentum was highlighted by the consistent strength of Customer Income, a key underlying growth metric for Plus500, which has supported a strong revenue performance during the year to date," the company said.
The contracts-for-difference trading platform now expects full-year revenue and earnings before interest, tax, depreciation and amortisation to be ahead of current analyst forecasts, which stand at USD555.8 million and USD277.9 million, respectively, according to company-compiled consensus.
This will still fail to live up to 2020's tough comparatives, when revenue more than doubled to USD872.5 million, while Ebitda surged to USD515.9 million.
Ryanair and Wizz Air both reported a jump in passengers flown in September amid a brighter outlook for the travel industry, with UK rules relaxed from Monday.
Ryanair saw traffic more than double to 10.6 million in September from 5.2 million a year ago, while load factor improved to 81% from 71%. September's figure slipped from August's 11.1 million passengers, however.
Wizz Air, meanwhile, flew 3.0 million passengers in September, up 91% on a year ago, with an improved load factor of 78.4% versus 64.6%.
The airlines' updates come the same day as the UK's traffic light travel system involving green, amber and red lists were scrapped.
Locations are now categorised as either on the red list or not - and there are UK press reports that the number of countries on the red list will be slashed to nine from 54 later in the week, with destinations such as Brazil, Mexico and South Africa expected to be opened up to quarantine-free travel.
Fully vaccinated residents – and unvaccinated under 18s – from more than 50 countries and territories can now enter the UK without needing to complete a pre-departure lateral flow test, take a day-eight post-arrival PCR test costing around GBP65, or self-isolate at home, with just a single day-two post-arrival test needed.
Stockbroker finnCap said it expects interim revenue to grow more than 50%, and tightened full-year guidance
For the six months to September 30, finnCap expects to deliver total revenue of GBP31.8 million, up 55% year-on-year. This was driven by finnCap Cavendish, which saw revenue surge to GBP16.2 million from just GBP4.2 million a year ago, as it "clearly capitalised on a robust M&A market".
Revenue at finnCap Capital Markets dipped 4% to GBP15.6 million, performing well in a "comparatively quieter period".
"Our overall revenue growth shows the clear benefit of our strategy to diversify our products beyond ECM - undertaken over the past 3 years - to service the broader strategic and financial needs of ambitious growing companies. Our pipeline is healthy and we now feel confident in delivering a revenue outcome for the year within an upgraded range of GBP45-50 million," said Chief Executive Sam Smith.
finnCap previously guided to full-year revenue around GBP40 million to GBP50 million.
In Monday's economic calendar, there are US factory orders at 1500 BST.
By Lucy Heming; lucyheming@alliancenews.com
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Wizz Air (WIZZ)
Plus500 (PLUS)
Future (FUTR)
