London open City sources predict FTSE100 will open down 22 points from yesterday’s close of 5,314.
Stocks to watch
Ash clouds from Iceland and strike action caused losses to grow at British Airways during a tough first quarter, although the airline still expects to break-even for the year. Losses before tax jumped to Ł164m in the three months ended 30 June from Ł148m a year ago as revenue fell by Ł46m, or 2.3%, to Ł1.94bn. Passenger revenue dropped 3.4% on capacity down 11.2%. BA blamed “additional finance costs and the impact of non cash foreign exchange movements” for its higher pre-tax loss.
Anglo American’s interim results came in slightly below analyst forecasts but the mining giant said it remains confident about its prospects. The group also announced that it reinstated its dividend payments with an interim dividend of 25 cents per share. Revenue came to $15.02bn in the six months ended 30 June compared with $11.13bn last time, while EBITDA rose to $5.41bn from 2.99bn previously. Operating profit more than doubled to $4.36bn. The figures missed Panmure Gordon’s forecasts. The broker predicted first half revenue of $16.15bn, EBITDA of $5.94bn and operating profit of $4.93bn.
Mondi said underlying operating profit for the first half of 2010 is expected to be considerably higher than that of the comparable period in the prior year.
In the Press
TalkTalk has signed a deal with Vodafone to launch a mobile phone service under its own brand — but it will target only its existing broadband customers. The deal will increase competition in the mobile phone market and should put pressure on prices. The telecoms provider, which has 4.2m customers, will announce the deal with Vodafone today alongside a trading statement for the first quarter, the Times reports.
EDF has agreed to sell its UK electricity grids business to Sir Li Ka-shing, the Hong Kong billionaire, for more than Ł5.5bn, according to reports. Hongkong Electric and Cheung Kong Infrastructure outbid a consortium including Macquarie bank, the Abu Dhabi Investment Authority, and Canada Pension Plan, the Times reports.
Google's internet search services were last night blocked in mainland China just three weeks after a denouement between the technology giant and the secretive superpower appeared to have been reached. Google's regular monitoring of its operations in the country revealed that its search services had been fully blocked, with no apparent warning from the Beijing government, the Telegraph reports.
Newspaper tips
Rolls-Royce is among the FTSE 100's band of defensives. The shares trade on a multiple of 15.5 times forecast earnings for 2010, putting the stock at the top of end of its historic range. While that may worry some, it's just a reflection of the market's preference for what is a relatively safe and promising investment. Keep buying says the Independent.
Aegis has followed up its purchase of a stake in a Chinese buying and advertising agency earlier this year with the A$363m (Ł207m) purchase of Mitchell. The shares sell on about 11 times this year’s earnings. Expect some volatility as the Mitchell deal shakes out, but a good hold for recovery says the Times.
The news from gold miner Centamin Egypt yesterday was mixed, as production fell in the latest quarter. However, management believe that it will meet full-year targets as production is ramped up through the rest of the year. The shares are trading on a June 2011 earnings multiple of 12.9 times, falling to 9.2 in 2012. Buy says the Telegraph.
US close
US stocks have lost all their early gains to close slightly lower with negative news from chipmakers knocking Nasdaq.
Demand for graphics chips has slumped in Europe and China according to Nvidia and it has slashed its sales outlook for the second quarter. Data storage firm Symantec warned last night that its sales are weak.
Investors are also nervous ahead of Friday's GDP report which is expected to show second-quarter growth revised to a 2.5% annualised rate, down from 2.7%.
Across the markets, the Dow closed 31 points lower at 10,467, with the Nasdaq down 13 points to 2,252. The S&P 500 was down 5 points at 1,102.
Exxon Mobil lost its early gains despite a 91% rise in second-quarter net income and a rising oil price. The figures exceeded analyst estimates. Net income jumped to $7.56bn compared with $3.95bn last time, while revenue rose to $92.5bn from $74.5bn.
(Source:Digitallook)
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