Diploma gobbles up Virginia Sealing Products, Workspace Group reports healthy customer demand

London open

The FTSE 100 is expected to open 17 points higher on Thursday, having closed down 0.08% at 7,530.69 on Wednesday.

Stocks to watch

Technical products supplier Diploma on Thursday said it had bought the assets and trade of Virginia Sealing Products for £56m. VSP supplies gaskets and fluid sealing products to the industrial maintenance, repair and overhaul market. Further deferred payments up to £8m may be payable in late 2020 subject to achievement of operating profit targets, Diploma said.

Workspace Group reported a “good level” of customer demand in its first quarter on Thursday, with enquiries averaging 1,060 per month, compared to 1,021 a year ago, and lettings standing at 121 per month, up from 88. The FTSE 250 real estate investment trust added two new buildings, in Hoxton and Clerkenwell, and one building extension and refurbishment in Chiswick during the quarter.

Reckitt Benckiser said it had agreed to pay to $1.4bn to resolve all US federal investigations in connection with the sales and marketing of Suboxone Film by its former prescription pharmaceuticals business Indivior. Indivior had been accused of illegally boosting prescriptions for its opioid addiction treatment by the US Justice Department. The deal was struck with US Department of Justice and Federal Trade Commission. Indivior was demerged from Reckitt in 2014.

Newspaper round-up

Boris Johnson’s allies have warned Theresa May that she must not “tie the hands” of her successor by appointing a new ambassador to the United States as one of her final acts in Downing Street. Sir Kim Darroch resigned as Britain’s ambassador to Washington yesterday, saying that it was impossible for him to stay on after President Trump severed relations and described him as stupid, wacky and pompous. - The Times

Britain has failed to make meaningful progress towards a free trade deal with the United States amid “chronic” staffing shortages and communication breakdowns in Whitehall, according to a cache of documents seen by the Telegraph. Details of meetings spanning two years show how overstretched departments have been working “at cross purposes” as transatlantic talks have repeatedly stumbled over politically sensitive topics such as rules on health, farming and the finance industry. - Telegraph

The British economy pulled out of a one-month downturn to return to growth in May as carmakers resumed production in the wake of shutdowns for the original Brexit deadline. The Office for National Statistics (ONS) said UK GDP rose by 0.3% from a month earlier, when stoppages at car plants resulted in negative growth of 0.4%. - Guardian

Living standards are more equal across British regions than at any point since 1979, a study says. Disposable income inequality between regions has halved since peaking in 1990, according to the Resolution Foundation think tank. In that year, incomes in the richest region, the South East of England, were £10,307. - Daily Mail

US close

US stocks closed in the green on Wednesday following Federal Reserve chair Jerome Powell's testimony to the House Financial Services Committee.

At the close, the Dow Jones Industrial Average was up 0.29% at 26,860.20, while the S&P 500 was ahead 0.45% at 2,993.07 and the Nasdaq Composite clinched a record close at 8,202.53 after a 0.75% gain in the session.

The Dow closed 76.71 points higher on Wednesday, while the S&P 500 briefly broke above 3,000 for the first time in history and the Nasdaq closed at an all-time high, as investors digested the key testimony from Powell.

Powell signalled that the door was wide open to policy easing, telling lawmakers that there were increased risks bearing down on the US economy from overseas even as price pressures remained muted.

In his semiannual Monetary Policy Report to Congress, the Fed chair said global crosscurrents related to growth and trade had reemerged since policymakers met in May, with apparent progress on trade having since turned into greater uncertainty and with the central bank's contacts in business and agriculture reporting heightened concerns over trade developments.