(Alliance News) - Stocks in London are set for another muted session on Tuesday as traders await US inflation data for May later in the week.
In early UK company news, British American Tobacco and Dechra Pharmaceuticals boosted their full-year outlook, while Oxford Instruments declared a dividend above pre-pandemic levels.
IG says futures indicate the FTSE 100 index of large-caps to open down 0.62 of a point at 7,076.60 on Tuesday. The FTSE 100 closed up 8.18 points, or 0.1%, at 7,077.22 on Monday.
"It was a nondescript session overnight as markets settled into a pre-US-inflation waiting game. Thursday's data could mean this week seems interminably long if the overnight price action is anything to go by," said Jeffery Halley, senior market analyst for Asia Pacific at Oanda.
In the US on Monday, Wall Street ended on a negative note, with the Dow Jones Industrial Average ending down 0.4%, the S&P 500 down 0.1% and the Nasdaq Composite down 0.5%.
In Asia on Tuesday, the Japanese Nikkei 225 index ended down 0.2%. In China, the Shanghai Composite was down 0.7%, while the Hang Seng index in Hong Kong was down 0.3%.
Due Thursday, the US consumer price index is expected to show annual growth of 4.7% for May, according to FXStreet, which would mark another uptick after April's 4.2% increase.
In early UK company news, British American Tobacco said it continues to expect this year will be a "pivotal" one for the business as it upgraded revenue guidance.
The cigarette maker now expects constant currency revenue growth of above 5% for 2021, ahead of prior guidance of 3% to 5%.
For combustibles, BAT said group value and volume share are both up 10 basis points in the year-to-date, with full-year cigarette volumes expected to be ahead of the industry, which itself is expected to be down 3%.
Meanwhile, BAT reported accelerating addition of non-combustible product consumers, up by 1.4 million to 14.9 million in the first quarter.
"We are accelerating our transformation with increased investment capitalising on our growing momentum in the New Categories, and a record quarter for consumer acquisition. This, together with our strong business performance, is reflected in our upgraded group revenue growth guidance of above 5% for 2021," said Chief Executive Jack Bowles.
"The momentum across the business is strong, and I am excited about the future for BAT."
Oxford Instruments posted full-year profit growth and brought its dividend above pre-pandemic levels.
Revenue for the financial year ended March 31 crept up 0.3% to GBP318.5 million, while growth on a constant-currency basis was up 1.7%. The company noted this was against a "challenging backdrop", while order growth was strong at 5.3% to GBP353.7 million.
Pretax profit jumped 35% to GBP52.2 million, helped by a foreign exchange gain of GBP7.3 million versus a loss of GBP1.4 million a year ago.
"We delivered strong order, profit, and margin growth, with revenue slightly ahead of the previous year. The momentum in orders reflected the underlying strength and breadth of our chosen end markets and their fundamental growth drivers. Increased profit and margins were supported by tangible gains realised as a direct result of the improved commercial processes and operational efficiencies that we have implemented through Horizon," the company said.
Oxford Instruments is an Abingdon, England-headquartered company, which makes products, systems and tools for research and industry.
It will pay a dividend for the year of 17.0 pence, after deciding not to pay anything for the previous financial year due to Covid-19 uncertainty. For the financial year ended in 2019, it paid out a dividend of 14.4p.
Oxford Instruments said its robust performance, strong order book and diversified end markets position it well for progress in the year ahead despite anticipated currency headwinds and ongoing coronavirus uncertainty.
Dechra Pharmaceuticals boosted its outlook following strong year-to-date trading.
The veterinary products firm said it has continued to benefit from strong market fundamentals as well as lower costs due to Covid-19. This, combined with he completion of the UK pre-Brexit inventory unwind and further easing of lockdown restrictions, means the board is "increasingly confident" that this strong performance will continue for the remainder of the financial year ending June 30.
As a result, Dechra expects full-year revenue to be ahead of current consensus expectations.
Ahead of the US CPI print, focus will lie on eurozone data on Tuesday. The economic events calendar has eurozone economic growth figures at 1000 BST, followed by US trade data at 1330 BST.
Already out, German industrial production fell 1.0% month-on-month in April, undershooting expectations, according to FXStreet, for growth of 0.7% after a 2.2% increase for March.
"The disappointing start to the second quarter suggests that supply chain disruptions, like the blockage of the Suez Canal in April or the ongoing semiconductor delivery problems, have not left German industry unscathed. However despite today’s disappointment, the industrial outlook remains bright," commented ING.
The euro edged down, with the US dollar stronger against major currency pairings early Tuesday. The single currency traded at USD1.2179 early Tuesday, down from USD1.2197 late Monday.
Sterling was quoted at USD1.4161, lower than USD1.4172 at the London equities close on Monday.
Against the yen, the dollar rose to JPY109.45, up from JPY109.23.
Data showed Japan's economy contracted 1.0% in the three months to March after the government reimposed coronavirus restrictions in major cities as infections surged.
This is an improvement on 1.3% contraction showed by the first preliminary reading in May.
The quarter-on-quarter fall came after the world's third-largest economy grew for two quarters to December, but the expansion was stopped in its tracks by a winter increase in coronavirus cases. The government imposed new virus states of emergency in January in response, urging people to stay at home and calling for restaurants to close earlier.
Gold was quoted at USD1,896.59 an ounce early Tuesday, nudging up from USD1,893.07 on Monday. Brent oil was trading at USD70.95 a barrel, down from USD71.43 late Monday.
By Lucy Heming; lucyheming@alliancenews.com
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