M&S agrees Ocado JV, Rio Tinto unveils bumper divi
London open
The FTSE 100 was being called 29 points lower by City traders on Wednesday, having closed the previous session at 7,151.12.
Stocks to watch
Ocado is selling Marks & Spencer a 50% share in its UK retail business for up to £750m. The joint venture will trade as Ocado.com but benefit from access to M&S's brand, products and customer database from September 2020 at the latest. To pay for the deal, M&S intends to conduct a rights issue to raise up to £600m and cut its dividend by 40%.
Full year pre-tax profits at mining services group Weir rose 22% to £310m as orders increased 15% on a like-for-like basis to £2.5bn. The company said it expected its mining and infrastructure markets to “continue to benefit from positive industry fundamentals with oil and gas activity to improve modestly from current levels”.
Anglo-Australian mining giant Rio Tinto rewarded shareholders on Wednesday with a bumper special dividend worth a total $4bn as part of $7bn payout. Overall underlying earnings rose 2% to $8.8bn as higher contributions from copper and diamonds offset lower earnings in other divisions.
Newspaper round-up
Retail workers in Britain are more likely to face unemployment rather than finding another job amid mounting numbers of job losses on the high street, with younger staff hardest hit, according to a report. The study by the Resolution Foundation thinktank found the retail industry now has the highest rate of redundancies of any sector of the economy, amid the rapid rise of shop closures across the country. – Guardian
Metro Bank’s chief executive will give up an annual bonus that was previously worth £800,000 following a major accounting mistake that is now under investigation by City regulators. Craig Donaldson told the Guardian that he offered to resign after the mistake came to light, but will be staying after gaining the full support of the bank’s board, which is chaired by its American founder Vernon Hill. – Guardian
Business cannot prepare for a chaotic no-deal Brexit because there is not enough warehouse space in the UK for manufacturers to stockpile goods, Mark Carney has said. The governor of the Bank of England urged the government to secure a transition to prevent a cliff-edge Brexit, regardless of a deal. “Wherever we are headed, it would serve the economy well to have a transition period towards that new world,” he said. – The Times
US close
US stock closed lower on Tuesday, as optimism over Sino-US trade relations faded and investors digested Federal Reserve chairman Jerome Powell's testimony before the US Senate.
At the close, the Dow Jones Industrial Average was down 0.13% to 26,057.98, while the S&P 500 was 0.08% lower at 2,793.90 and the Nasdaq was 0.07% weaker at 7,549.30.
The Dow closed 33 points lower following testimony from Federal Reserve chairman Jerome Powell where he reiterated the central bank’s wait-and-see approach.
Powell said the economy was healthy but has been sending "conflicting signals" that have led to the Fed's "patient approach" towards future interest rates changes.