London pre-open: Stocks seen higher ahead of data slew
By Michele Maatouk
Date: Tuesday 13 Nov 2018
(Sharecast News) - London stocks were set for a firmer open on Tuesday despite heavy losses on Wall Street, as Asian shares came off their lows.
The FTSE 100 was called to open 26 points higher at 7,079.
US stocks tumbled on Monday, with the Dow down more than 600 points and the Nasdaq more than 200 points lower as Apple led tech shares lower after a number of chip suppliers warned on their future earnings outlook, citing weaker mobile phone demand
CMC Markets analyst Michael Hewson said: "The decision to stop reporting the unit sales numbers for iPhones, iPads and other individual products should have clued investors in to begin with, along with the slight miss on handset sales. The focus on an average selling price of $793 a unit helpfully disguises the fact that while margins are likely to be higher on individual products they don't need to sell anywhere near as many products to meet revenue targets, which means fewer chips.
"That being said Apple's share price still fell back sharply closing just above its 200-day moving average and at its lowest levels since the end of July."
Still, a recovery in Asian shares helped to lift the tone for European trading amid hopes of a de-escalation of trade tensions between the US and China ahead of the G20 summit later this month.
On home shores, Brexit was firmly in focus as Theresa May insisted that talks are at the "endgame" stage.
The pound underwent a see-saw session on Monday as Brexit-related news saw the currency hit a one week low against the US dollar before some afternoon strength saw it finish higher on the day against the euro.
"Conflicting narratives from both EU and UK officials saw the pound slide initially over concerns that a deal remained some way off before a more optimistic tone from EU chief negotiator Michel Barnier saw the currency rebound. The timing of these remarks suggests that there may be an element of politics at play here, with the EU attempting to shift any element of blame towards the UK if a deal falls through," said Hewson.
"For now, markets appear to be overlooking the possibility that whatever type of deal Prime Minister May is able to thrash out with the EU, the final outcome is likely to be scuppered by the UK parliament, where despite the splits amongst both 'Remain' and 'Leave' MPs in the chamber, both sides appear to be coalescing around a common position that the deal, as it is being negotiated, is unacceptable."
On the data front, the ILO unemployment rate, average earnings and the claimant count are all due at 0930 GMT.
In corporate news, Vodafone swung to a massive loss at the half-year stage after it restructured its business in India due to competitive pressures, though underlying earnings are still on track for the full year.
Group revenue fell 5.5% to €21.8bn for the six months to 30 September and the previous year's €1.2bn post-tax profit crashed to a €7.8bn loss.
International support services group DCC said interim pre-tax profits rose 17.2% to £85.9m as three of its divisions reported higher earnings and offset a seasonally weaker performance in its LPG unit.
Group adjusted operating profit on continuing activities increasing by 15.9% (up 16.5% on a constant currency basis) to £141.9m, with all divisions performing in line with expectations.
AstraZeneca has agreed to sell the US rights to 'Synagis' (palivizumab), used for the prevention of serious lower respiratory tract infection caused by respiratory syncytial virus, to Swedish Orphan Biovitrum, trading as Sobi.
The FTSE 100 drugmaker said Sobi would commercialise Synagis in the US, with around 130 AstraZeneca employees transferring to Sobi as part of the transaction. Under the agreement, AstraZeneca would receive an upfront consideration of $1.5bn, consisting of $1.0bn in cash and $500m in ordinary shares of Sobi upon completion.
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