(Alliance News) - Stocks in London are set to extend gains on Thursday as markets welcomed US President Joe Biden's smooth inauguration and look ahead to the European Central Bank's latest policy decision at midday.
In early UK company news, Entain reported good momentum into the new year as it made Jette Nygaard-Andersen its next chief executive, IG Group revealed plans to expand further into the US, and Sage reiterated guidance.
IG says futures indicate the blue-chip FTSE 100 index to open 24.81 points, or 0.4%, higher at 6,765.20 on Thursday. The FTSE 100 closed up 27.44 points, or 0.4%, at 6,740.39 on Wednesday.
The higher start in London comes after Wall Street rallied overnight as Biden was sworn in as the 46th US president without incident.
He signed a series of executive orders to launch his administration Wednesday, including a decision to rejoin the Paris climate accord and a mask mandate for all federal buildings.
The orders included keeping the US in the World Health Organization, ending the ban on entries from mostly Muslim-majority countries, bolstering environmental protections, and strengthening the fight against Covid-19.
"All of the major US equity markets closed at new record highs, while markets in Europe also had a positive session, as investors absorbed the messaging of a new president, and a Treasury secretary who promised to 'act big', in testimony to US policymakers the day before," said Michael Hewson at CMC Markets.
In New York on Wednesday, the Dow Jones Industrial Average closed up 0.8%, the S&P 500 up 1.4% and Nasdaq Composite up 2.0%.
"This enthusiasm over a new stimulus program is likely to filter into a positive European open later this morning, after the Bank of Japan kept its own monetary policy decision unchanged, ahead of today's ECB rate decision," Hewson added.
The European Central Bank announces its latest policy decision at 1245 GMT on Thursday. This will be followed by a press conference with President Christine Lagarde at 1330 GMT.
No change is expected from the ECB this week after the central bank bumped up its pandemic bond-buying programme last month.
Ahead of the ECB, the euro traded at USD1.2127 on Thursday, higher than USD1.2100 late Wednesday.
"With trade weighed EUR below its six-month average and the ECB already announcing new easing measures in December, little suggests that the January ECB meeting should affect the euro much," said ING.
The Bank of Japan, which released its latest rate decision overnight, kept policy on hold while slightly downgraded its economic growth forecast for the current financial year.
The BoJ said the Japanese economy will shrink by 5.6% in the current year, compared with the 5.5% contraction estimated in October. The central bank expects the economy to bounce back 3.9% in the next financial year starting in April in the post-Covid-19 recovery, revised up from the 3.6% expansion predicted three months ago.
The BoJ held its interest rate at minus 0.1%, as expected, and also decided to maintain its ultra-loose monetary policy as the country is battling with the pandemic.
The Japanese yen was stronger early Thursday. Against the yen, the dollar was quoted at JPY103.43, soft versus JPY103.55.
In Asia on Thursday, the Japanese Nikkei 225 index closed up 0.8%. In China, the Shanghai Composite closed up 1.1%, while the Hang Seng index in Hong Kong was down 0.5%.
The S&P/ASX 200 in Sydney closed up 0.8%.
In early UK company news, Ladbrokes owner Entain reported a strong end to 2020 and said it has "ongoing momentum" entering the new year as it announced the appointment of a female chief executive.
Total group net gaming revenue increased 7% in the fourth quarter of 2020, with online growing 41% but retail hit by restrictions and shop closures.
For the full-year, Entain expects earnings before interest, taxes, depreciation and amortisation in a range of GBP825 million to GBP845 million, in line with its earnings guidance earlier in January.
"In an exceptionally challenging year, our strong performance has been driven by a business model that is highly diversified across a wide range of products, brands, territories and channels. Q4 has been another successful period for us, and we are particularly pleased with the momentum that we are seeing in the US. BetMGM continues to go from strength to strength," said Shay Segev, Entain's outgoing chief executive.
Entain's partner in BetMGM, US casino operator MGM Resorts International, on Wednesday said it will not be making a firm takeover offer for Entain following a possible bid made at the start of January. Entain previously had rejected the MGM approach, saying it "significantly undervalues the company and its prospects".
In a separate release Thursday, Entain said it has appointed Jette Nygaard-Andersen, currently an independent non-executive director, as CEO with immediate effect. Segev will step down as a director and will remain available until July 8 to facilitate a smooth handover.
Nygaard-Andersen - who has more than 20 years' experience in leadership and operational roles in media, entertainment, sport and digital businesses - will be the first woman to run a listed UK gambling group. Sky News had first reported last week that Entain was in talks with Nygaard-Andersen for the position.
Accounting software firm Sage said it performed in line with expectations in the first quarter, posting recurring revenue growth.
Recurring revenue for the three months to December 31 increased 4.7% to GBP408 million, supported by software subscription growth of 11% to GBP303 million.
Other revenue fell 24% to GBP39 million, in line with Sage's strategy to transition away from licence sales and professional services revenue. Organic total revenue grew 1.4%.
"We have continued to deliver against our strategy in the first quarter, growing recurring revenue in line with our plan for the year, supported by good demand for Sage Business Cloud solutions. Accordingly, we reiterate our guidance for the full year, as set out in our FY20 results announcement," said Chief Financial Officer Jonathan Howell.
Online trading platform IG Group Holdings reported a "record" performance in its first half, seeing profit more than double on a year ago.
Net trading revenue in the six months to November 30 surged 67% to GBP416.9 million and pretax profit jumped to GBP231.3 million from GBP101.2 million a year before. Active clients rose 55% to 238,600.
IG kept its interim dividend steady at 12.96 pence.
Separately, IG unveiled its acquisition of tastytrade, a US online brokerage and trading education platform. IG will pay USD1.0 billion to tastytrade's shareholders, comprising USD300 million in cash and the issue of 61.0 million IG shares.
"This acquisition will materially expand and scale our business in the US and see us further diversify into the exciting high growth market of US retail options and futures, a market which is adjacent to IG's core retail trading skill set. The US market has more than 1.5 million retail traders and is the largest derivatives market in the world," said IG Chief Executive June Felix.
AJ Bell reported customer and asset growth in its first quarter.
For the three months to December, the investment platform reported a 6% increase in customers over the quarter, closing the period at 312,309 after opening it at 295,305. Platform net inflows, representing organic growth in the quarter, increased by 67% over the prior year to GBP1.5 billion.
Total assets under administration increased to GBP62.5 billion, up 14% over the last 12 months and 11% in the quarter. AJ Bell Investments' assets under management was GBP1.0 billion at the end of 2020, having doubled over the past 12 months.
Sterling was quoted at USD1.3696 early Thursday, up from USD1.3631 at the London equities close on Wednesday and continuing to trade around its best levels since May 2018.
More people will lose their lives in the coronavirus outbreak, Prime Minister Boris Johnson has warned, after the UK saw its deadliest day in the pandemic.
Official figures showed that January 12 saw the highest number of deaths take place on a single day – with 1,110 Covid-19 fatalities, surpassing the previous peak of 1,073 on April 8, 2020. A record 1,820 further deaths within 28 days of testing positive for Covid-19 were reported as of Wednesday, although there is a time lag between a patient dying and appearing in the government's official statistics.
The PM said there are "tough weeks to come" as the vaccine rollout continues, adding that "the light will only really begin to dawn as we get those vaccinations out".
Gold was quoted at USD1,872.87 an ounce early Thursday, higher than USD1,865.55 on Wednesday. Brent oil was trading at USD55.99 a barrel, easing from USD56.30 late Wednesday.
The economic events calendar on Thursday has the latest US jobless claims figures at 1330 GMT.
By Lucy Heming; lucyheming@alliancenews.com
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