AstraZeneca earnings grow, Vodafone upbeat despite revenue fall

London open

The FTSE 100 is expected to open 12 points lower on Thursday, having closed up 0.12% at 7,107.65 on Wednesday.

Stocks to watch

AstraZeneca reported good growth in earnings for 2016 in spite of a 13% decline in revenues in the fourth quarter, as it holds out hopes that 2017 will be "a defining year" for new blockbuster drugs to breathe life back into the business. The decline in revenue towards the end of the year led to annual turnover falling 7% to £23b, reflecting the rise of generic rivals to its Crestor, its last great blockbuster patent.

International mobile communications giant Vodafone postes a trading update for the quarter to 31 December on Thursday, reporting 1.7% growth in group organic service revenue, with Europe accounting for 0.7% of that growth and Africa, Middle East and Asia-Pacific (AMAP) 3.9%. The FTSE 100 firm said its European growth continued as average revenue per user (ARPU) stabilised, with Italy up 3.0%, Germany up 1.8%, Spain 0.8% firmer, and the UK falling 3.2%. It said growth in AMAP slowed due to competition in India, with a 1.9% fall in that country, 4.0% growth at Vodacom, and 15% growth in Turkey.

Consumer goods firm Reckitt Benckiser confirmed that it is “advanced negotiations” to buy US baby food maker Mead Johnson for around $16.7bn, a move which could bolster its health products business. The Slough-based company which makes Durex, Nurofen, Cillit Bang and Dettol said that it is in talks to by each Mead Johnson share for $90 in cash giving it a share capital of about $16.7bn.

Newspaper round-up

German authorities have opened a probe into share dealing by Deutsche Börse group head Carsten Kengeter shortly before the announcement of the market’s planned merger with the London Stock Exchange. The inquiry centres on the acquisition by Kengeter of Deutsche Börse shares worth about €4.5m (£3.8m) on 14 December 2015, a bourse spokesman told AFP on Wednesday. – Guardian

At dawn on Thursday, Aussie retailer PJ Davis will be throwing his first snags on a barbie carefully sheltered among flowers and plant pots in a former Homebase store on an unglamorous retail park in St Albans. The barbecue chef is the new UK boss of Bunnings, often billed as Australia’s favourite retail chain and famous for its “sausage sizzles”. Drizzle may have replaced Aussie sunshine at Bunnings’ first UK outpost, but the waft of onions and sausages through the store will give British shoppers the first taste of how they do DIY down under. – Guardian

Facebook has been ordered to pay $500m (£395m) after its virtual reality division was found to use stolen technology. The ruling took the shine off the world’s biggest social network posting record fourth-quarter profits and signing up millions of new users. – Telegraph

A computer game maker that has reinvented dinky die-cast cars for the mobile generation has driven off with a £4m investment. Hutch, based in London’s ‘Silicon Roundabout’ cluster at Old Street, has raised $5.5m (£4m) in a funding round led by Index Ventures and Backed VC. – Telegraph

Tesco could be forced to dispose of more than 600 stores unless it can convince regulators that its £3.9 billion merger with Booker will not harm competition. Analysis by the data team at The Times has found there are 635 Tesco stores situated less than 500 metres from a shop in Booker’s network of Premier, Londis and Budgens stores, raising fears about the impact on consumers, suppliers and rivals. - The Times

Schroders has sold its entire stake in French Connection. The institutional investor, which had held its 9.27 per cent stake for many years, sold its shares at 33p each yesterday. The move prompted the fashion retailer’s share price to surge by nearly 19 per cent to 39¾p. It was not clear who had bought the stake, but a name is likely to emerge when the new investor makes a regulatory filing disclosure in the next few days. – The Times

US close

US stocks ended the session slightly higher on Wednesday with the tech-heavy Nasdaq gaining from well-received earnings from Apple, as the Federal Reserve struck a slightly more positive note in its policy statement explaining its decision to stay put on rates, as expected.

The Dow Jones Industrial Average rose 0.14% to 19,890.94, the S&P 500 edged higher by 0.03% to 2,279.55 and the Nasdaq was up 0.50% to 5,642.65.

Following two days of policy deliberations, rate-setters at the Federal Reserve kept the target range for the Fed funds rate unchanged at between 0.50% and 0.75%, while calling attention to a recent improvement in consumer and corporate sentiment.

They also appeared to express a tad more confidence that inflation was headed back towards their 2.0% target, but economists said the post-meeting communique was on the whole little changed as the Fed waited for greater clarity on Trump’s fiscal plans.