LONDON MARKET PRE-OPEN: SSE Warns On Profit; Earthport Battle Hots Up

LONDON (Alliance News) - Stock prices in London seen opening in the red on Friday, continuing Thursday's decline, as optimism fades on a trade deal between the US and China before tariffs kick in. On the London Stock Exchange, SSE warned its earnings may be hurt by an EU ruling, while it is also reviewing options for its consumer unit, including a sale. Elsewhere, Visa has raised its offer for Earthport to trump a rival bid from Mastercard. IG futures indicate the FTSE 100 index will open 10 points lower at 7,083.58. The blue chip index closed down 79.51 points, or 1.1%, at 7,093.58 on Thursday."Up to now the markets have been optimistic about a trade deal being reached, despite little solid evidence," said London Capital Group's Jasper Lawler."Trump's stance is now rattling investor nerves just weeks before the deadline. With US corporate earnings starting to dry up, traders' full focus will soon be back on trade developments. With no deal in sight this will have a negative bias on equity market flows."CNBC reported a Trump-Xi meeting is highly unlikely before the March 1 deadline, but the US is likely to keep tariffs at 10% rather than raise them to 25% as scheduled.CNBC said while Trump and Xi are set to meet "eventually" there is to much to be done before the deadline on trade as well as preparations for Trump's meeting with North Korea's Kim Jong Un, penned for the end of February. The report came after White House economic adviser Larry Kudlow told Fox Business the US and China have a "pretty sizeable distance to go" before reaching a trade deal.In the US on Thursday, Wall Street ended firmly in the red, with the Dow Jones Industrial Average ending 0.9% lower, the S&P 500 also down 0.9%, and the Nasdaq Composite 1.2% lower.The Japanese Nikkei 225 index closed 2.0% lower. Most financial markets in China remained closed for the Lunar New Year holiday, but the Hong Kong reopened re-opened for the first time since Monday. The Hang Seng index is down 0.1% in late trade. In UK corporate news, FTSE 100 power utility SSE is mulling options for its Energy Services business, including a possible standalone demerger and listing, a sale, or other transaction of the consumer arm. SSE abandoned plans in December to try to merge the business with Innogy's npower. SSE said if there are no other option available, it could retain the unit as a separate ring-fenced business. The energy provider also warned the EU's decision on the UK's capacity market system could knock its annual earnings.In November, SSE guided for adjusted earnings earnings per share of 70 pence to 75p in its year ending March. However, a day later, the EU removed the European Commission's state aid approval of the capacity market and introduced a standstill until the method can be approved again.SSE believes the system is the best way to deliver power supply at low cost, but GBP60 million of income will not be able to be recognised. As a result, earnings per share guidance would be between 64p and 69p. SSE also reiterated plans for a GBP200 million buyback using funds from the recent sale of two Scottish wind farms. In the FTSE 250, West End property owner Shaftesbury said trading up to and over Christmas and New Year was "robust", with tenants mostly reporting year-on-year revenue growth. The bars and restaurants in its properties were "particularly" busy. Occupancy remains high, Shaftesbury continued, as does demand. They firm is making progress with some larger schemes, it continued, though Shaftesbury did say it is disappointed by further delays to the opening of the Elizabeth Line, also known as Crossrail, though the delay should not affect demand. Elsewhere, Smart Metering Systems said the number of metering and data assets under management rose 54% over 2018 to 3.1 million, with annualised recurring revenue up 32% to GBP75.3 million. SMS has alsigned a deal with Co-operative Energy to become its installer of smart meters in "certain defined geographic areas". A takeover battle is developing for cross-border payments firm Earthport, with Visa upping its initial offer in response to an offer from peer Mastercard.In December, Visa agreed a 30 pence per share offer for Earthport, but in January Mastercard then made a 33p bid. Mastercard is now offering 37p per share, valuing Earthport at around GBP247 million. This is 12% higher than Mastercard's offer and 23% higher than its own initial bid. Mastercard, in its own statement on Friday, said it is now "considering its options" following Visa's new bid and will make a further announcement in "due course". DWF Group confirmed plans to float on the London Stock Exchange, raising GBP75 million of gross proceeds. The law firm, which announced it was mulling going public at the start of February, is looking to join the Main Market, with admission aimed for March. The pound was soft, quoted at USD1.2948 early Friday, compared to USD1.2967 at the London equities close Thursday. Sterling slipped to an intraday low of USD1.2854 on Thursday immediately after the Bank of England's rate decision.The Bank of England slashed its growth forecasts for the UK economy, saying the outlook remained highly sensitive to the effects of Brexit "fog", while the nine-member Monetary Policy Committee held the bank rate at 0.75%. UK Prime Minister Theresa May has vowed to deliver Brexit on time on March 29, after agreeing a fresh round of talks with EU leaders to try to get her withdrawal agreement over the line.May described discussions in Brussels on Thursday as "robust but constructive" and insisted she was determined to "negotiate hard" over the coming days to secure legally-binding changes to the agreement which will render it acceptable to Parliament.Brexit Secretary Stephen Barclay and EU Chief Negotiator Michel Barnier will meet next Monday, while May and European Commission President Jean-Claude Juncker will have another meeting before the end of the month to take stock of the situation.But European Council president Donald Tusk poured cold water on any expectation of an imminent end to the current impasse, saying there was "no breakthrough in sight".In early data, Germany's exports for December rose 1.5% on the month, versus 0.5% consensus, while they fell 4.5% year-on-year. Imports were up 1.4% on November, versus 0.4% consensus, and flat year-on-year.