(Alliance News) - Stock prices in London are seen opening down on Thursday, tracking Asian equity markets lower, with investors keeping a wary eye on stuttering stimulus talks in Washington.
In early company news, broadcaster ITV and commodities trader Glencore both skipped paying an interim dividend as the companies felt the effects of the coronavirus pandemic.
IG futures indicate the FTSE 100 index is to open 37.02 points lower at 6,067.70. The blue-chip index closed up 68.72 points, or 1.1%, at 6,104.72 Wednesday.
ITV offered a bleak picture for investors. The television broadcaster and programme maker was unable to provide financial guidance as the fallout from Covid-19 hit interim earnings.
For the half-year ended June 30, revenue fell 17% to GBP1.45 billion from GBP1.75 billion a year before, and pretax profit fell 93% to GBP15 million from GBP222 million.
Advertising revenue fell 21%, while ITV Studios revenue was down 17%.
ITV said it has decided not to pay an interim dividend in light of continued economic uncertainty.
Looking ahead, ITV said that given the level of uncertainty for both ITV Studios and the Broadcast unit it is not possible to provide financial guidance for the third quarter or the remainder of the year.
"While our two main sources of revenue - production and advertising - were down significantly in the first half of the year and the outlook remains uncertain, today we are seeing an upward trajectory with productions restarting and advertisers returning to take advantage of our highly effective mass reach and addressable advertising platform, in a brand safe environment," said Chief Executive Carolyn McCall.
"The future is still uncertain due to the pandemic but the action we have taken to manage and mitigate the impact of Covid-19 puts us in a good position to continue to invest in our strategy of transforming ITV into a digitally-led media and entertainment company," McCall added.
Glencore scrapped its dividend as the Swiss-based miner and commodities trader posted a drop in interim earnings.
For the half-year ended June 30, Glencore swung to a net loss of USD2.60 million from a USD226 million profit last year, as revenue fell to USD70.96 billion from USD107.43 billion.
Glencore also reported a 13% drop first-half adjusted earnings before interest, tax, depreciation and amortisation to USD4.83 billion.
In addition, Glencore said it will not pay its deferred dividend, saying the economic outlook is too uncertain due to the coronavirus. The dividend was put on hold earlier this year due to the pandemic.
CEO Ivan Glasenberg said: "The outlook remains uncertain in the short-term. Notwithstanding our cash-generative business and secure liquidity positions, the board has concluded that it would be inappropriate to make a distribution to shareholders in 2020, instead prioritising the acceleration of Net debt reduction to within our target range, currently expected to occur by the end of 2020.
"Over the longer term, our diversified commodity portfolio, positions us well to play a key role in the next upward economic cycle, benefiting in particular from the commodities required for the transition to a low-carbon economy. We remain focussed on creating sustainable long-term value for all stakeholders."
The Bank of England on Thursday said its policymakers unanimously voted to keep monetary policy unchanged in light of the challenges posed by the coronavirus pandemic.
The BoE's nine-member Monetary Policy Committee all voted to keep the UK's key interest rate at 0.1% and asset purchases at GBP745 billion, as widely expected.
The central bank noted global activity has strengthened over recent months, but generally remains below its level in late 2019. Covid-19 has continued to spread rapidly within a number of emerging market economies, however, and there has been a renewed rise in cases in many advanced economies, the bank highlighted.
The pound was quoted at USD1.3145 early Thursday, flat from USD1.3144 at the London equities close Wednesday.
"Bank of England has kept the interest rate unchanged as expected because they know that the Covid-19 situation is not as bad in the UK as it is in the US. The coronavirus infection curve is still relatively flat and the economic data does presents some hopes for a V-shape recovery. Although, we think that the V-shape recovery is out of reach given the fact that Brexit talks are going nowhere. Nonetheless, sterling is the dominant currency against the dollar and it is likely to continue its upward journey," commented AvaTrade analyst Naeem Aslam.
The Japanese Nikkei 225 index ended down 0.5%. In China, the Shanghai Composite is up 0.1%, while the Hang Seng index in Hong Kong is down 1.1%.
In the US on Wednesday, Wall Street ended higher, with the Dow Jones Industrial Average up 1.4%, S&P 500 up 0.6% and Nasdaq Composite up 0.5%.
All three main indexes on Wall Street ended with gains Wednesday – the Nasdaq at another record – on bets US lawmakers will eventually reach a deal on another much-needed stimulus for the world's top economy.
However, the two parties remain far apart on their proposals with Democrats' USD3.5 trillion plan more than three times bigger than the Republicans' offer with a key sticking point the supplementary jobless benefits, which ran out last week.
The euro was priced at USD1.1885, soft from USD1.1901. Against the yen, the dollar was quoted at JPY105.48, flat from JPY105.47.
Gold was trading at USD2,049.55 an ounce early Thursday in London, firm from USD2,046.16 late Wednesday. Brent oil was quoted at USD45.37 a barrel, lower from USD45.96.
Thursday's economic calendar has UK construction PMI at 0930 BST, with US initial jobless claims at 1330 BST.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
Copyright 2020 Alliance News Limited. All Rights Reserved.
Glencore (GLEN)
ITV (ITV)
