By Benjamin Chiou
Date: Tuesday 23 Jul 2024
(Sharecast News) - UK stocks are expected to pull back slightly on Tuesday morning with the FTSE 100 seen opening around 0.4% lower than Monday's closing price of 8,198.78.
The UK benchmark index gained 0.5% on Monday, while US markets performed well overnight, though nerves were starting to set in ahead of the start of the quarterly reporting season across Wall Street's heavyweight tech sector.
"Tesla and Google are due to report earnings today after the bell, and their results - or the reaction to their results - could shift the wind in either direction," said Ipek Ozkardeskaya, senior analyst at Swissquote Bank. "The risk is, given the sky-high Big Tech valuations, any delay in AI revenue, any unpleasant detail, or any misstep could have a sector-wide negative impact and lead to a rapid selloff in AI-related stocks."
The economic data calendar was looking relatively quiet across the UK and Europe, while existing home sales and the Richmond Fed manufacturing index was the only major releases due out in the US in afternoon trade.
In company news, catering giant Compass Group boosted its full-year guidance on Tuesday, following a bumper third quarter, in which the world's largest catering company saw organic revenues rise 10.3%. It now expects underlying profit growth to be above previous guidance of 15% on a constant currency basis, and organic revenue growth to beat earlier projections of 10%.
Mitie Group reported a 10.5% increase in first-quarter revenue to £1.16bn, driven by acquisitions, increased projects, and pricing adjustments. The FTSE 250 outsourcing specialist said it secured £2bn in total contract value from wins and renewals, including significant extensions with major clients, and initiated a three-year margin enhancement programme aimed at £20m in cost savings for the 2025 financial year. It also launched a £50m share buyback programme, and acquired ESM Power for £5.5m, boosting its position in the high voltage power connections market.
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