(Alliance News) - Stock prices in London are seen opening lower on Tuesday with sentiment soured by England entering its third Covid-19 lockdown and as caution sets in before the crucial Georgia Senate runoff votes in the US.
IG futures indicate the FTSE 100 index is to open 25.8 points lower at 6,546.08. The blue-chip index surged 111.36 points, or 1.7%, at 6,571.88 on Monday.
"European and US stock futures are very much under the influence of the coronavirus pandemic," noted Avatrade analyst Naeem Aslam.
"Coronavirus vaccine is the only bright spot during this pandemic time. The UK has started to deploy AstraZeneca's vaccine, and this comes on top of Pfizer's vaccine, which began back in December last year. However, the process is slow as it will take us until February, when the most vulnerable people have their first shot done."
On the London Stock Exchange, WM Morrison said its like-for-like sales surged over the festive period, helped by a "renewed focus on traditional Christmas fare" and despite the UK being under Covid-19 restrictions. Retailer Next also painted a somewhat optimistic picture, explaining that full price sales over the holiday trading stretch fell by less than initially anticipated.
Among London mid-caps, trading platform Plus500 hailed a "record" 2020 and said its revenue performance topped internal expectations.
Grocer Morrisons said like-for-like sales, excluding fuel, over Christmas and the New Year were 9.3% higher annually.
"All customer and brand metrics have improved, market share has grown, and our online and wholesale channels are growing very rapidly as we develop as a multi-channel business," the company said.
And for the 22 weeks to January 3, part of the second half of its financial year, like-for-like sales, also excluding fuel, were 8.1% higher. Including fuel, like-for-likes were 1.9% higher during the period, the grocer noted that fuel sales were down 23%, hit by new virus restrictions on movement.
"Shopping patterns and customer behaviour were different this year as the COVID-19 restrictions made larger gatherings of family and friends more difficult. In the lead-up to Christmas we saw more customers shopping earlier than in previous years and a renewed focus on traditional Christmas fare. Champagne sales were up 64% compared to last year, whole salmon up 40% and Free From mince pies up 14%," Morrisons added.
Morrisons and its supermarket peers will be in focus when research firm Kantar reports its latest UK grocery market share figures for the 12 weeks ended December 27 at 0800 GMT.
Clothing and homewares retailer Next expects pretax profit for its financial year ending January of GBP370 million, which would be down 38% from GBP593.9 million. The GBP370 million forecast is a notch higher than its GBP365 million guidance issued back in October, which itself was bumped up from its GBP300 million guidance issued a month earlier.
"After accounting for the benefit of better sales in November and December and anticipated losses from store closures in January, full year profit before tax is forecast to be GBP370 million before two additional non-recurring items," Next said.
"For the year ahead (2021/22) our central guidance, which assumes our retail stores will be closed in February and March, is for profit before tax of GBP670 million, based on full price sales being flat versus two years ago."
Next said it upside scenario for the 2022 financial year is pretax profit of GBP735 million, with its downside forecasting profit of GBP600 million.
Promisingly for Next, full price sales in the nine weeks to December 26 were down just 1.1% from the prior year, measuring up favourably to the retailer's central guidance of an 8% decline.
Elsewhere in London, Plus500 said it expects to report revenue on USD872 million in its year ended December, more than double the USD354.4 million in 2019. It was a "record performance", the company noted, and was ahead of board expectations.
"The company's strong performance during FY 2020 demonstrates once again its exceptional ability to respond to news events and volatile financial markets while maintaining a sophisticated, efficient and responsible business model. This performance, driven by record platform usage, was achieved despite the unprecedented and uncertain market conditions experienced throughout the year," Plus500 explained.
The company added that its co-founder and former chief executive Gal Haber will step down as managing director with immediate effect. Plus500 has kicked off a process to find Haber's replacement.
UK Prime Minister Johnson imposed the toughest national lockdown in England since March, shutting schools to most pupils to prevent the NHS being overwhelmed by surging coronavirus infections.
In a televised address to the nation on Monday evening, the PM pinned hopes on the rollout of vaccines to ease the restrictions, but warned that the measures being introduced immediately are expected to last until mid-February.
It is thought that measures are unlikely to be relaxed until around 13 million people aged over 70 or classed as extremely clinically vulnerable have received the vaccine and been given enough time to be protected – about two to three weeks after getting the jab.
Almost 14 million people in the UK could be in line for a Covid vaccine by the middle of February, in line with plans announced by the prime minister.
Vaccine minister Nadhim Zahawi said the NHS "family will come together" to get 13.9 million doses prepared for the most vulnerable by the middle of next month.
A source told the PA news agency that those near the top of the list will be contacted by mid-February, but the final figure could be lower – closer to 13 million – because of some crossover between groups, such as those over 80 who live in care homes.
The pound was quoted at USD1.3603 on Tuesday morning in London, improved from USD1.3587 at the London equities close on Monday.
The euro stood slipped to USD1.2269 from USD1.2275 at the European equities close Monday. Against the yen, the dollar was trading at JPY102.89, down from JPY103.10.
In Asia on Tuesday, Japan's Nikkei 225 closed down 0.4%. In China, the Shanghai Composite closed up 0.7%, while the Hang Seng Index in Hong Kong was 0.6% higher in late trade.
Stocks in Hong Kong got a boost after the New York Stock Exchange abandoned plans to delist three state-owned Chinese telecom companies on Monday, reversing a decision that further dented already strained relations between the world's two superpowers.
Shares in the three state-owned telecoms firms jumped on the news.
In Hong Kong trading on Tuesday afternoon, China Unicom was up 8.7%, while China Mobile was up 6.4% and China Telecom up 5.3%.
The economic events calendar on Tuesday has German unemployment figures at 0855 GMT.
Attention will also be on the Georgia Senate runoffs that will determine US Senate control and could decisively impact the start of Joe Biden's White House tenure. Two Senate seats are up for grabs. If US President-elect Biden's Democrats win both, the upper house of the US Congress would be split 50-50 but with Vice President Kamala Harris having a tie-break vote.
"To date, investors are comfortable with a Republican-controlled Senate that would offer a balance against the potentially more progressive agenda of the Democrats under President-elect Biden. If the Democratic Party candidates both wins, we could see an equity market correction, especially if investors worry that such checks and balances around tax and tech regulation will disappear," Axi analyst Stephen Innes said.
Gold prices inched higher on Tuesday. The precious metal was quoted at USD1,943.41 an ounce, up from USD1,940.70 at the London equities close on Monday. Brent oil was flat at USD51.04.
By Eric Cunha; ericcunha@alliancenews.com
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