SSE swings to interim loss, Sage reports 'significant strategic progress'

London open

The FTSE 100 is expected to open eight points higher on Wednesday, having closed down 0.21% at 7,369.44 on Tuesday.

Stocks to watch

UK energy provider SSE swung to an interim loss in what it called “unprecedented” market volatility”. The company on Wednesday posted a pre-tax loss of £511m loss compared with a profit of £1.6bn last year. Profitability in renewables was negatively affected by the pace of project delivery and unfavourable weather, exacerbated by the associated requirement to buy back hedges in a higher-price environment.

Sage described “significant strategic progress” in its full-year results on Wednesday, as revenue rose 5% to £1.95bn, and organic total revenue advanced 6% to £1.92bn. The FTSE 100 software company said its organic operating profit was ahead 8% year-on-year in the 12 months ended 30 September at £383m, while operating profit itself fell 2% to £367m. Its board declared a final dividend of 12.1p per share, up 4%, taking the full-year distribution to 18.4p.

Newspaper round-up

Energy suppliers have been accused of profiteering by charging “horrendous and financially crippling rates” to care homes facing huge bills this winter. The chief executive of Care England, the largest body representing independent providers of adult care, has accused gas suppliers of being “unduly onerous” in their practices. – Guardian

Local authorities have warned they face an “existential crisis” caused by massive funding shortfalls and any attempt by ministers to patch up budgets by allowing increased council tax is doomed to failure. The multibillion “black hole” in England’s municipal finances – which has pushed a number of councils to the brink of bankruptcy – could not be fixed by local ratepayers alone, who would face unrealistic council tax increases of up to 20%, the Local Government Association (LGA) said. – Guardian

Jeremy Hunt is preparing to announce measures to help the long-term sick back into jobs on Thursday, as figures showed that a record 2.5million people are now unable to work because of persistent illness. The Chancellor is expected to use Thursday’s Autumn Statement to warn that labour shortages are fuelling spiralling inflation by reducing the workforce and pushing up wages. - Telegraph

Shadow banking firms should draw up contingency plans so that they can be safely wound down if they collapse, the boss of the City regulator has told peers scrutinising the recent turmoil that gripped pension schemes. Nikhil Rathi, the chief executive of the Financial Conduct Authority, said an “important point” that had emerged from the pension crisis was the extent to which retirement schemes and other non-bank firms should have “resolution regimes”. – The Times

A second senior executive at HSBC is leaving the bank in a potential setback to the FTSE 100 lender as it seeks to fend off an activist campaign by its biggest shareholder. Chirantan Barua, who is HSBC’s global head of strategy, is to join Lloyds Banking Group as the head of its Scottish Widows division, it was announced yesterday. This comes only three weeks after HSBC surprised its shareholders by disclosing the exit of Ewen Stevenson, its highly regarded finance chief, who will leave next year. – The Times

US close

Wall Street stocks closed higher early on Tuesday as market participants digested another key inflation report.

At the close, the Dow Jones Industrial Average was up 0.17% at 33,592.92, while the S&P 500 advanced 0.87% to 3,991.73 and the Nasdaq Composite saw out the session 1.45% firmer at 11,358.41.

The Dow opened 56.22 points higher on Tuesday, taking a bite out of losses recorded in the previous session.

Tuesday's primary focus was October's producer price index, with the Bureau of Labor Statistics' report for final demand rising 0.2% on a seasonally adjusted basis in October, driven by a 0.6% advance in prices for final demand goods. October's PPI print came in lower than the 0.4% reading expected on the Street, signalling that inflation may be slowing down, and comes hot on the heels of last week's cooler-than-expected consumer price index data.

Elsewhere on the macro front, manufacturing activity in the New York area improved a lot more than expected in November, according to a survey released on Tuesday. The New York Fed's Empire State general business conditions index rose to 4.5 from -9.1 in September. This was well ahead of analysts’ expectations for a reading of -5.0. According to the survey, 33% of respondents reported that conditions had improved over the month, while 29% said they had deteriorated.