London pre-open: Stocks seen up on positive Asian cues
By Michele Maatouk
Date: Wednesday 22 Jan 2020
(Sharecast News) - London stocks were set for a firmer open on Wednesday, taking their cue from an upbeat session in Asia, as investors shrug off worries about the spread of coronavirus.
The FTSE 100 was called to open 20 points higher at 7,360.
CMC Markets analyst Michael Hewson noted that for the moment, the main casualties of the virus have been people whose health was already fragile.
"However if the virus were to spread further, and cause changes in consumer behaviour then markets might well take fright.
"As it is for now, investors are cautious but not overly concerned, as can be seen from today's session in Asia which initially saw equity markets come under further pressure, but which have since rebounded, despite new cases of the virus slowly increasing.
"While the virus appears contained investors still appear to be in 'buy the dip' mode and as such today's rebound in Asia markets looks set to translate into a positive open here in Europe."
On home shores, all eyes will be on the release of public sector net borrowing figures for December at 0930 GMT and the CBI industrial trends survey for January at 1100 GMT, after sterling was boosted by solid jobs numbers on Tuesday.
In corporate news, supermarket chain Sainsbury's said chief executive Mike Coupe had confirmed his intention to retire in July to be replaced by the company's retail and operations director Simon Roberts.
Coupe, who has been chief executive for six years, will step down from the role at the end of May and leave the board on July 2 at the company's annual shareholder meeting, Sainsbury's said in a statement.
Software group Sage said first quarter recurring revenue increased 10.7% year on year to £410m, underpinned by software subscription growth of 24.8% to £286m as it continued to focus on migrating existing customers and attracting new customers to subscription and the cloud.
Recurring revenue growth was driven principally by North America and Northern Europe (UK & Ireland), with strong momentum from 2019 carried forward into the first quarter.
WH Smith reported a "good performance" for the 20 weeks ended 18 January, with total revenue up 7% and like-for-like revenue down 1%.
The FTSE 250 company said that in travel, total revenue was up 19%, with like-for-like revenue up 3%.
In its high street business, the firm said its strategy of actively managing its space, gross margin growth and good cost control was still delivering sustainable profit and "good" cash generation, with total revenue there down 5% and like-for-like revenue also down 5%.
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