LONDON MARKET PRE-OPEN: Higher call; Wickes upgrades profit guidance

(Alliance News) - Stocks in London are poised to end a volatile week on a stronger note following a rebound on Wall Street overnight.

In early UK company news, Wickes said it now sees full-year profit ahead of consensus forecasts following a strong fourth quarter so far. i(x) Net Zero, an investing company focused on the energy sustainability and chaired by a former UK government minister, unveiled plans to list on AIM.

IG says futures indicate the FTSE 100 of large-caps to open up 40.69 points, or 0.6%, at 7,169.90 on Friday. The blue-chip index closed down 39.47 points, or 0.6%, at 7,129.21 on Thursday - at this level up 1.2% since the start of the week, but still down 2.5% from the level reached before Omicron panic battered markets.

"In a rollercoaster week for equity markets, sentiment has ebbed and flowed, as investors continue to grapple with what the new Omicron variant will mean for markets going forward. It is slowly becoming apparent that this strain has been around for a while," said Michael Hewson, chief market analyst at CMC Markets.

Ten cases of the new strain have so far been confirmed in the US, including five in New York announced Thursday evening by state Governor Kathy Hochul, one in Los Angeles county and one in the Pacific island state of Hawaii. The Hawaii case and one in Minnesota both involved residents with no recent international travel history, signalling the strain is already circulating inside the country.

US President Joe Biden has unveiled a raft of measures to combat the variant, including new testing requirements for travellers and a surge in vaccination efforts.

Providing some reason for optimism for stocks in the US though was Congress's approval of a stopgap funding bill to keep federal agencies running into 2022 and avert a costly holiday season government shutdown.

With the clock ticking down to the 11:59 pm Friday deadline, the Senate voted by 69 to 28 to keep the lights on until February 18 with a resolution that had already advanced from the House.

In the New York on Thursday, Wall Street ended higher, with the Dow Jones Industrial Average up 1.8%, the S&P 500 up 1.4% and the Nasdaq Composite up 0.8%.

"The rebound in US markets also helps set us up for a positive European open as we look towards the latest services PMIs," said CMC's Hewson.

The economic events calendar on Friday has services PMI readings from Germany, the eurozone, UK and the US at 0855 GMT, 0900 GMT, 0930 GMT and 1445 GMT respectively.

The highlight of the day is the monthly US jobs report, due at 1330 GMT. Consensus is looking for a November nonfarm payrolls figure of 550,000, according to FXStreet, which would be up from 531,000 in October.

The dollar was on the front foot heading into the data.

Sterling was quoted at USD1.3274 early Friday, lower than USD1.3317 at the London equities close on Thursday.

The euro traded at USD1.1285, down from USD1.1315 late Thursday. Against the yen, the dollar was quoted at JPY113.32, up from JPY113.03.

In early UK company news, Wickes lifted its full-year adjusted pretax profit guidance to no less than GBP83 million.

The building supplies retailer noted that current analyst profit consensus lies around GBP74 million to GBP75 million.

Friday's upgrade comes after a strong performance in the fourth quarter to date. Core sales are lower year-on-year against tough comparatives, but remain materially ahead on a two-year basis, the company noted.

Wickes boasted that its business model and strong supplier relationships have led to a better-than-expected margin performance, as it has been able to mitigate inflationary pressures.

"Our forward planning and early strategic decisions have resulted in an improved profit performance, and we continue to navigate inflationary pressures and raw material constraints well. Clearly, this remains a time of uncertainty, however our differentiated business model leaves us well-placed to continue to outperform within a large and growing home improvement market," said Chief Executive David Wood.

Investment platform Hargreaves Lansdown has hired Amy Stirling as its next chief financial officer, succeeding Philip Johnson.

She is currently CFO of the Virgin Group. She also is a non-executive director at Virgin Money UK, where she is also the representative director of Virgin Enterprises, but will step down come summer. She was previously CFO of TalkTalk Telecom.

Stirling will join Hargreaves Lansdown on February 21 and Johnson, while stepping down from the board at the end of January, will remain available to assist with the handover until May 31.

Her appointment comes in time for Hargreaves Lansdown's investor day on February 22, when it plans to set out the next phase of its strategy.

Investing firm i(x) Net Zero plans to list on London's junior AIM market, eyeing a raise of GBP20.0 million.

i(x) aims to provide investors capital growth with a "positive, scalable, measurable and sustainable impact" on the environment. It has two main focus areas, the first being energy transition, and the second sustainability in the built environment.

So far, i(x) said it has invested in areas such as biofuels, renewable energy and direct air capture. Following admission to AIM, the company plans to use the proceeds of its fundraising to provide development and expansion capital to its investee firms, as well as making new investments.

It counts investors such as Airbnb co-founder Joe Gebbia and Red Hot Chili Peppers lead singer Anthony Kiedis.

"i(x) Net Zero is seeking admission to AIM to access global growth capital to scale the business further. Admission also offers the ability for individual and institutional investors to deploy capital into a company whose sole mission is to create top-tier returns while addressing humanity's greatest challenges, like climate change, through the companies we are building," said Chief Executive Steve Oyer, a former Lazard Asset Management executive.

i(x) Net Zero is chaired by Nick Hurd, a member of Parliament for 14 years until the end of 2019. Hurd as a government minister for 8 of those years, including as UK minister for Climate Change & Industry, where he was involved in the ratification of the Paris Agreement.

In Asia on Friday, the Japanese Nikkei 225 index ended up 1.0%. In China, the Shanghai Composite closed up 0.9%, while the Hang Seng index in Hong Kong was down 0.5%. The S&P/ASX 200 in Sydney closed up 0.2%.

Growth in the service sector of the Chinese economy slowed in November, as a sharp rise in input costs forced service providers to raise their own prices to customers, according to the results of a survey by IHS Markit released on Friday.

The Caixin China general services purchasing managers' index read 52.1 points last month, down from 53.8 in October. The score remained above the neutral 50-point mark for the third month in a row but was the weakest reading of the three, IHS Markit noted.

Total new business rose at the slowest rate in three months, with service providers saying that measures imposed by the government in Beijing to control the spread of Covid-19 hurt new order inflow, while foreign demand increased only slightly.

Gold was quoted at USD1,770.79 an ounce early Friday, higher than USD1,761.10 on Thursday. Brent oil was trading at USD70.91 a barrel, rising from USD69.67 late Thursday.

By Lucy Heming; lucyheming@alliancenews.com

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