London pre-open: Stocks seen muted after weak US close
By Michele Maatouk
Date: Tuesday 09 Aug 2022
(Sharecast News) - London stocks were set for a muted open on Tuesday following a weak close on Wall Street.
The FTSE 100 was called to open unchanged at 7,482.
CMC Markets analyst Michael Hewson said: "Having finished the end of last week lower after a strong US payrolls report, European markets managed to start the week strongly, after a better-than-expected performance in Chinese exports for July which prompted optimism over a pickup in global economic activity.
"This reasoning always felt a little tenuous given the weakness in the corresponding import data, which suggested weak domestic demand. Nonetheless US markets took their cues from the same early optimism from European markets, as the S&P500 hit a three-month high. This optimism quickly evaporated after US chipmaker Nvidia issued a profits warning in respect of its Q2 numbers which are due on August 24th.
"This acted as a drag on the tech sector and ultimately resulted in the Nasdaq and S&P500 pulling back from their intraday highs and finishing slightly lower."
In corporate news, cybersecurity provider Avast said underlying earnings had dropped in the six months ended 30 June as margins contracted and revenues remained broadly flat year-on-year.
Avast posted a first-half adjusted EBITDA of $249.7m, down from $270.2m at the same time a year earlier, while adjusted EBITDA margins fell 4.4 percentage points to 52.9% and adjusted revenues ticked up by 0.2% to $472.0m.
InterContinental Hotels doubled interim profits, reinstated dividends and announced a $500m share buyback as travel demand increased after Covid restrictions eased.
The company said operating profit for the six months to June 30 rose 101 percent to $377m. Revenue per available room, a key metric, rose 51% but was still 10.5% lower than pre-pandemic 2019. A dividend of 43.9 cents a share was declared.
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