Tullow signs new production sharing contract, Watches of Switzerland backs full-year guidance

London open

The FTSE 100 is expected to open 12 points lower on Wednesday, having closed up 0.76% at 7,502.89 on Tuesday.

Stocks to watch

Tullow Oil has signed a production sharing contract for an offshore exploration licence in Côte d'Ivoire. UK-listed Tullow will operate the licence with 90% equity and the remaining 10% is held by PetroCi. The licence covers an area of 1,345 square kilometres and is adjacent to licence CI-524 which is also held by Tullow and PetroCi.

Watches of Switzerland backed its full-year guidance on Wednesday as it reported a rise in first-half profit and revenue amid solid demand. In the 26 weeks to 30 October, statutory pre-tax profit jumped 28% to £83m, while revenues increased 31% to £765m, or 23% at constant currency.

Holiday giant TUI posted a return to annual profits and said it expected underlying earnings to increase significantly in 2023, despite market uncertainty. TUI reported underlying earnings (EBIT) of €409m for the year to September 30, compared to the €2bn loss a year earlier as travel rebounded from the Covid pandemic. Revenue more than trebled to €16.5bn.

Newspaper round-up

The price of a fresh turkey centrepiece for Christmas dinner has increased by as much as 45% because of shortages caused by the bird flu outbreak, which has wiped out 1.6 million of the birds in the UK. Not only are prices up but the choice of fresh turkey is more limited in the major supermarkets, with the number of whole bird and crown options falling by about a third this year. – Guardian

Passengers around Britain are set for another day of disrupted trains and curtailed services on the railway as a 48-hour RMT strike continues on Wednesday. The two-day strike, the first in a wave of industrial action that will affect the railway for four weeks around Christmas, involves about 40,000 members of the RMT union in Network Rail and 14 train operators. – Guardian

New natural gas-only boilers are facing a ban within four years under net zero proposals for the grid to use hydrogen instead. All boilers installed after 2026 would have to be hydrogen-ready under the plan, which the Government announced in a consultation on Tuesday. – Telegraph

Binance has registered $1.9 billion of withdrawals in the past 24 hours, according to the blockchain data firm Nansen, as the world’s biggest crypto exchange said it had “temporarily paused” withdrawals of the USDC stablecoin. How crypto exchanges such as Binance and its now-bankrupt former rival FTX handle customer deposits is under close scrutiny from users and regulators. The FTX founder Sam Bankman-Fried was charged by the US Securities and Exchange Commission yesterday with defrauding investors. – The Times

The squeeze from rising inventory levels has been sorely felt at Asos, the fast-fashion retailer whose shareholders include Mike Ashley’s Frasers Group. The owner of the Topshop and Miss Selfridge brands has moved to overhaul its operations after posting a full-year loss in October. Asos, which is scaling back discounts, plans to write off between £100 million and £130 million of out-of-fashion inventory to help refresh its brand for twenty somethings. Inventories rose to almost £1.1 billion at the end of August, its year end, from £807 million. – The Times

US close

Wall Street stocks closed higher on Tuesday as November's all-important inflation report seemed to indicate that inflation may be peaking.

At the close, the Dow Jones Industrial Average was up 0.30% at 34,108.64, while the S&P 500 advanced 0.73% to 4,019.65 and the Nasdaq Composite saw out the session 1.01% stronger at 11,256.81.

The Dow closed 103.60 points higher on Tuesday, extending solid gains recorded in the previous session.

Tuesday's main focus was news that the cost of living in the US slowed a bit more quickly than anticipated in November, as energy and used vehicle prices continued to retreat. According to the Department of Labor, the year-on-year rate of increase in the headline consumer price index slipped to 7.1%, while at the core level, the annual rate of increase slipped to 6.0%.

Elsewhere on the macro front, the National Federation of Independent Business' small business optimism index unexpectedly increased to 91.9 in November amid a slight ease in inflation pressures and better business conditions. The reading was up from 91.3 in October and also beat forecasts for a print of 90.4.