Burberry sales improve, Vodafone forms Iran partnership

London open

The FTSE 100 is expected to open 39 points higher on Tuesday, after closing down 0.94% at 6,947.55 on Monday.

Stocks to watch

Burberry's like-for-like sales improved in the second quarter though for the full year its expected benefit from currency movements is not as big as analyst forecasts. For the six months to 30 September, total revenue of £1.16bn was up 5% at reported level but down 4% underlying, with 11% growth in retail or 2% underlying at constant currencies.

Smiths Group announced on Tuesday that it has established a €2.5bn euro medium term note programme with its ten relationship banks as dealers. The FTSE 100 firm said the EMTN programme will facilitate the issuance by the company of senior notes over time in various currencies and maturities as a continuing element of its financing strategy. “This programme underpins Smiths Group's existing strategy to finance our balance sheet from the rated public debt markets,” said chief financial officer Chris O’Shea.

The US Food and Drug Administration has accepted a complete re-submission of a new drug application for sodium zirconium cyclosilicate (ZS-9), a potential new medicine for the treatment of hyperkalaemia by AstraZeneca's subsidiary ZS Pharma. Hyperkalaemia – high potassium levels in the blood serum – commonly occurs in patients with advanced chronic kidney disease and/or chronic heart failure, and may lead to cardiac arrest and death.

Vodafone has partnered with Iran’s HiWeb to provide telecoms infrastructure and internet of things services which would expand its presence in the country. Vodafone agreed to modernise the internet service provider's network and IT infrastructure by expanding fixed and mobile internet services under the HiWeb brand in the country, while also providing marketing, sales and internet of things services. In return, the agreement would let Vodafone provide its corporate customers with fixed and mobile services in Iran.

Newspaper round-up

Investors dumped UK government bonds yesterday in one of the heaviest sell-offs since the Brexit vote as international demand for sterling assets declined rapidly. Overseas investors are becoming increasingly worried that inflation and a move by the Conservative government towards a “hard” Brexit will lead to a downgrade in the UK’s creditworthiness. The pound’s fall has also reduced expectations that the Bank of England will cut interest rates further this year. - The Times

Royal Dutch Shell is facing questions over an important plank of its $30bn asset disposal programme as an acrimonious boardroom clash complicates its planned exit from a refining partnership in Japan. The Anglo-Dutch oil group agreed last year to sell its 33 per cent stake in Showa Shell for ¥169bn ($1.6bn) to Idemitsu Kosan as part of efforts to reduce debt and streamline operations after its £35bn takeover of BG Group. - Financial Times

Bookmakers look set to be hit by an extra £30 million bill after the government decided to impose a levy of 10 per cent of their gross profits from horse racing from both betting shops and online betting. In a letter to betting industry and horse racing bodies seen by The Times, Tracey Crouch, the sports minister, said that the new fee, designed to replace the Horserace Betting Levy that has funded racing for more than half a century, would be introduced from April next year. - The Times

US companies with almost $600bn of investments in the UK are reviewing their plans for expansion in the UK amid concerns over its post-Brexit access to the EU’s single market, the largest US business group has warned. The US Chamber of Commerce, in a document due to be presented to the UK’s Cabinet Office this week, warns that a post-Brexit UK would need “unfettered access” to the European market in goods and services to retain and attract US investments. - Financial Times

Leaving the European Union will save Britons from paying the price of the European Union’s costly agricultural policy, according to a paper that flies in the face of multiple warnings that Brexit will push up food prices. Freeing farms of the EU’s overly zealous regulation of pesticides will prevent agricultural yields from plunging as the common agricultural policy veers towards organic production, according to a paper for the Institute of Economic Affairs, a right-wing think tank. - The Times

US close

US stocks closed lower on Monday, as oil prices fell and investors took in some key economic data and a slew of corporate results.

The Dow Jones Industrial Average was last down 0.29% at 18,086.40, the S&P 500 lost 0.3% to 2,126.50 and the Nasdaq 100 was off 0.26% at 4,796.17.

Meanwhile, oil prices weakened after data from oil field service company Baker Hughes showed the number of active US oil rigs last week rose by four to 432.

Brent crude was last down 0.52% to $51.68 per barrel while West Texas Intermediate was lower by 0.52% to $50.09.

Shares in Bank of America surged 14.29% as it reported third quarter profit unexpectedly increased as expenses fell and bond trading rose.

Revenue rose 3% to $21.64bn, ahead of the $20.97bn anticipated by analysts.

US industrial production rose 0.1% in September following a revised 0.5% fall in August, according to the Federal Reserve. Analysts expected a 0.2% gain.

In contrast, the Empire State manufacturing index fell to -6.8 in October from -2 in September, which was below the consensus +1.

The new orders index edged up but remained negative at -5.6, suggesting an ongoing fall in orders, and the shipments index rose to -0.6.