(Alliance News) - Stock prices in London are seen opening higher on Thursday morning, the first trading day of 2020, following the promise that the phase one US-China deal will be signed this month.
Amid little notable UK company news prior to the open, Ferrexpo cheered its shareholders by declaring a special dividend, while Tullow Oil reported positive drilling results from the Kanuku licence.
IG futures indicate the FTSE 100 index will open 40.56 points higher at 7,583.00. The blue-chip index closed down 44.61 points, or 0.6%, at 7,542.44 on Tuesday having had gained 12% in 2019 as a whole.
All major markets were closed on Wednesday for New Year's Day. All reopen Thursday, other than Tokyo, which remains closed the rest of the week.
Sterling was quoted at USD1.3217 early Thursday, firm on USD1.3200 at the London equities close on Tuesday. The euro was trading at USD1.1206 early Thursday, lower than USD1.1230 late Tuesday. Against the yen, the dollar was at JPY108.71, up slightly from JPY108.55.
In the US on Tuesday, Wall Street ended mixed, with the Dow Jones Industrial Average down 0.4%, but the S&P 500 and Nasdaq Composite both up 0.3%. The S&P 500 rallied more than 28% in 2019 – its best annual performance in six years.
"Global equity markets had a great finish to 2019 thanks to the announcement the US and China agreed upon phase one of the trade deal," said CMC Markets UK Market Analyst David Madden.
Late on Tuesday, US President Donald Trump has said he will sign the first phase of a trade deal with China at the White House in mid-January.
Trump also said he will travel to Beijing at a later date to open talks on other sticking points in the US-China trade relationship.
He tweeted from his Florida home: "I will be signing our very large and comprehensive Phase One Trade Deal with China on January 15. The ceremony will take place at the White House."
He said high-level Chinese government officials will attend the signing.
In China on Thursday, the Shanghai Composite closed up 1.2%, while the Hang Seng index in Hong Kong is up 1.1% in late trade.
China's manufacturing sector continued to grow, IHS Markit reported, though not as fast as the prior month.
The Caixin purchasing managers' index, released by IHS, was 51.5 in December, from 51.8 in November. A figure over 50 means expansion, and below means contraction.
There was a "strong" rise in output during December, though the rate of new order growth eased to a three-month low. Export sales were up "slightly", Caixin said. Looking ahead, sentiment is weaker than the historical average due to concerns over trade tension, environmental policy, and "intense" market competition.
Back in London, IP Group said its portfolio company Oxford Nanopore Technologies has raised GBP29.3 million of new capital.
IP Group's stake in Oxford Nanopore will be 16% upon completion of the fundraising, it said, valued at around GBP264 million.
Oxford Nanopore noted that funds were raised from both new investors and existing shareholders from the US, Europe and Asia Pacific.
"We're delighted to see another successful fundraising for Oxford Nanopore which rounds off an impressive year of commercial success and technical validation of nanopore sequencing," said IP Group Chief Executive Alan Aubrey.
Iron-ore miner Ferrexpo said it will pay a special interim dividend of 6.6 US cents a share, unchanged from a year before. It said the payout reflects its "strong" cash generation ability and balance sheet strength.
Dividends declared in 2019 have amounted to 13.2 US cents so far. Ferrexpo said it will consider the final dividend for 2019 and will announce it in its annual results announcement on March 18. For 2018, Ferrexpo paid 23.1 cents a share.
Restaurant operator Tasty said it has sold its dim t More London site for GBP2 million as part of its strategy of reducing exposure where it is experiencing increasing property and labour costs.
Tasty said it intends to use the proceeds from the sale to pay off its remaining bank debt, to fund the working capital and selected restaurant refurbishment plans.
Turning to operations, Tasty said fourth-quarter sales to-date remain in line with expectations, and it remains confident that current market forecasts for 2019 will be achieved.
Tullow Oil said the Carapa-1, drilled on the Kanuku licence offshore Guyana, has encountered four metres of net oil pay. A detailed laboratory analysis of the oil quality will follow in due course, the company noted.
Repsol Exploracion Guyana is the operator of the Kanuku block with a 37.5% stake. Tullow Guyana also holds a 37.5% stake, with Total E&P Guyana holding the remaining 25%.
Looking ahead, Tullow Oil Chief Operating Officer Mark MaxFarlane said: "We will now integrate the results of the three exploration wells drilled in these adjacent licences into our Guyana and Suriname geological and geophysical models before deciding the future work programme."
In commodities, gold was quoted at USD1,519.25 early Thursday, down from USD1,521.04 at the London equities close on Tuesday.
Brent oil was trading at USD66.32 early Thursday, firm on USD65.94 at the London equities close on Tuesday.
The economic events calendar on Thursday has eurozone manufacturing PMI at 0900 GMT and UK manufacturing PMI at 0930 GMT. In the afternoon, there is US manufacturing PMI at 1445 GMT.
By Evelina Grecenko; evelinagrecenko@alliancenews.com
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Tullow Oil (TLW)
Ip Group (IPO)
Ferrexpo (FXPO)
Tasty (TAST)