Diageo flags 'challenging' environment, Halma backs full-year guidance

London open

The FTSE 100 is expected to open 61 points higher on Thursday, having closed down 0.17% on Wednesday at 8,268.70.

Stocks to watch

Drinks maker Diageo maintained guidance amid a "challenging" global environment for the industry. In a brief trading statement ahead of its annual general meeting, chief executive Debra Crew said consumers continued to be "cautious". Diageo in July reported a drop in full-year organic operating profit as it pointed to a weaker performance in Latin America and the Caribbean

Halma backed its guidance for the full year as it said further progress was made in the first half in trading conditions "which remain varied across our end markets".

AstraZeneca's ‘Tagrisso’, or osimertinib, has been approved in the US for treating adult patients with unresectable, stage three EGFR-mutated non-small cell lung cancer (NSCLC) that had not progressed during or after platinum-based chemoradiation therapy. The approval was based on the results of a phase three trial that showed Tagrisso extending median progression-free survival to over three years compared to 5.6 months with placebo. Tagrisso reduced the risk of disease progression or death by 84%, with overall survival data still under evaluation.

Newspaper round-up

Rachel Reeves is pushing for the UK’s tax and spending watchdog to upgrade its national growth forecasts to reflect the economic boost Labour says can be achieved from its blitz of planning reforms. In a development that could open up additional spending headroom for the chancellor before next month’s budget, the Treasury has held talks with the Office for Budget Responsibility to try to persuade its officials that unblocking the planning system could drive up growth. – Guardian

Jaguar Land Rover has said it will spend half a billion pounds to upgrade a Merseyside factory to build hybrid cars and prepare for electric vehicle production. Britain’s largest automotive employer – officially known as JLR – said it has already spent £250m on new car production lines, machinery, people and digital technology at the Halewood plant, with plans for £250m more over the coming years. – Guardian

Labour ministers have sought legal advice about a £1.6bn Royal Navy shipbuilding contract as the struggling British company hired for the work faces a Spanish takeover. Belfast-based Harland & Wolff, which built the Titanic, was hired alongside Navantia, a Spanish state-owned shipbuilding giant, to build three Navy vessels but Harland’s decision to call in administrators last week has plunged the project into crisis. – Telegraph

The production of electric cars including hybrids fell by 25.9 per cent last month as demand waned, new figures show. This led to a decline in their share of overall car output to 29.6 per cent, according to the Society of Motor Manufacturers and Traders, the car industry body. – The Times

The chairman of Royal Mail’s parent company has criticised the slow timetable of Ofcom’s consultation on reform of the struggling postal operator’s universal service obligation. Keith Williams, 68, told International Distribution Services’ shareholders at Wednesday’s annual meeting, that while the loss-making Royal Mail welcomed Ofcom’s plans to consult, the process is “frustratingly slow”, with no decision due until next summer. – The Times

US close

US stocks finished mostly lower on Wednesday as investors chose to take profits after the record highs seen on the Dow and S&P 500 the previous session, as optimism surrounding stimulus measures in China quickly faded.

The Dow settled 0.7% lower at 41,914.75, pulling back from Tuesday's all-time closing high of 42,208.22, while the S&P 500 slipped 0.2% to 5,722.26 from 5,732.93.

The Nasdaq, meanwhile, finished more or less flat at 18,082.21, eking out a gain of just 0.04%.

Equity markets worldwide rallied on Tuesday after the People's Bank of China unveiled a significant stimulus package aimed at boosting the country’s flagging economy, including cuts to reserve requirements and lending rates, including for existing home loans.

However, even further PBoC stimulus announced on Wednesday – by way of a cut to the largest reduction in interest rates for one-year loans to financial institutions in history – wasn't enough to keep the rally going.