Argos lifts Sainsbury's in fourth quarter, Balfour Beatty returns to black

London open

The FTSE 100 is expected to open 34 points higher on Thursday, after closing up 0.15% at 7,368.64 on Wednesday.

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Infrastructure group Balfour Beatty returned to the black on Thursday, posting full year pre-tax profits of £8m from a loss of £199m. Underlying pre-tax profits came in at £60m against a loss of £123m in 2015. Shareholders have been rewarded with a 1.8p a share final dividend for a total of 2.7p. Underlying revenue grew 4% to £8.5bn thanks to the weak pound. At constant exchange rates revenue was down 3%.

International services company Serco Group announced on Thursday that it was named ‘preferred bidder’ to operate the New Grafton Correctional Centre (NGCC) in New South Wales, Australia. Serco's contract for operation, expected to commence in 2020, carried an estimated total contract value to Serco over a 20-year term of AUD2.6bn (£1.6bn).

Sainsbury’s like-for-like retail revenue fell in the fourth quarter but total group sales rose thanks to a strong showing from Argos. The group's retail revenue for the quarter ended 11 March was up 0.1%, excluding fuel sales, compared to last year, but LFL retail revenue fell 0.5%.

One Savings Bank hiked its dividend 21% as it reported a 29% increase in profit before tax as its loan book accelerated growth in the second half alongside an improvement in the net interest margin. The challenger bank delivered a 29% return on equity despite the impact of the bank corporation tax surcharge and an improvement in the capital ratio to 13.3%.

Newspaper round-up

Energy companies are braced for a sharp political backlash on Thursday as MPs debate plans to intervene in energy tariff pricing to protect consumers who are slow to switch. Fifty MPs have backed calls from John Penrose, a Conservative former minister, demanding "immediate action" from Government to ease the pressure on 20 million households which are on standard energy tariffs. – Telegraph

The Government is to set up a new watchdog to close loopholes used by criminals as part of a wider clampdown on money laundering and terrorist financing. It plans to launch the Office for Professional Body Anti-Money Laundering Supervision (OPBAS) - a new group that will sit within the Financial Conduct Authority (FCA) - by the start of next year. It comes as the Government moves to introduce new, stricter money laundering regulations that it said would ensure the UK meets the latest global standards. – Telegraph

Google and Facebook risk a boycott from the world’s major advertisers unless they do more to clamp down on advertising fraud, which is costing the industry $16.4 billion this year, a leading industry figure said yesterday. Johnny Hornby, founder of The&Partnership, a media agency backed by WPP, said that the two tech groups, which together control an estimated 60 per cent of all digital advertising, had a duty to come together with media agencies, brands and advertising industry bodies to combat advertising fraud. Government should be brought in if necessary, he said. – The Times

Canary Wharf Group is in discussions to sell the 50 per cent stake that it manages and owns in the Walkie Talkie, one of the City of London’s newer landmarks, for about £600 million, according to CoStar News. The group has approached agents about pitching for the mandate to sell the share in the building at 20 Fenchurch Street, at a level which would value the whole tower at about £1.2 billion. – The Times

The news that Jones Bootmaker is on the brink of falling into administrationis a reminder of just how tough life is on the high street. The 160-year-old shoe retailer may yet be rescued, but about 1,000 workers are unsure about their future employment. Profits for bricks-and-mortar shops are being squeezed by the rise of online shopping, an increase in staff costs brought on by the introduction of the national living wage, and fierce discounting of the price of their products, which is designed to attract shoppers but hurts profit margins. On top of this is business rates – a tax that takes no account of falling profit and is now more costly than corporation tax for many shops. - Guardian

US close

US equity markets finished higher on Wednesday, after the Federal Reserve tightened policy but left its so-called 'dot-plot' graph largely unchanged, triggering a sharp rally in government bond markets.

The Dow Jones Industrial Average was up 0.54% to 20,950.10, the S&P 500 rose 0.84% to 2,385.26 and the Nasdaq 100 was 0.63% firmer at 5,416.24.

As expected by economists, raising the target range for the Fed funds rate by 25 basis points to between 0.75% and 1.0%.

In a surprise move, however, Minneapolis Fed president Neil Kashkari dissented from the rest of the Federal Open Market Committee, instead casting his ballot in favour of keeping the target range for the Fed funds rate unchanged.

In its policy statement, the Fed described job gains as "solid" and said inflation had moved close to the Committee's 2% longer-run objective, although it was aiming for a sustained rise to that level.

For Tom Stevenson, investment director for personal investing at Fidelity International, the Fed was "clearly erring on the side of caution".

"The dot plot is pretty much unmoved but we do seem to have a bit more consensus around rates in 2019.

“Of note, Neel Kashkari didn't think rates should rise yet, which highlights there are still meaningful doubts about just how quickly and how far the Fed should raise rates in this cycle.”