Morrisons now expecting bumper year, Playtech trades as expected

London open

The FTSE 100 is expected to open flat on Tuesday, after closing up 0.38% at 7,327.77 on Monday.

Stocks to watch

On the back of its strongest festive performance for seven years, Wm Morrison Supermarkets said it now expects full year profit to be ahead of market consensus. For the nine weeks to 1 January, the supermarket group grew like-for-like sales excluding fuel 2.9%, while total sales were 2.0% higher.

Gaming software development company Playtech said it expects results for the full year 2016 to be in line with market views as it announced that chief financial officer Ron Hoffman will become chief executive officer of the group’s financials divisions. Andrew Smith, the current head of investor relations, will succeed Hoffman and join the board as an executive director with immediate effect.

International distribution and outsourcing group Bunzl announced on Tuesday that it has acquired two further businesses in the UK and the US. The FTSE 100 company said Woodway, purchased at the end of December, is a leading supplier of both packaging products and solutions to a variety of end user customers in a number of market sectors throughout the UK. In January Bunzl acquired the business of Packaging Film Sales, based in Denver, Colorado, and completed the acquisition of Sæbe Compagniet, that was announced on 22 November.

Insurance provider Phoenix Group Holdings has achieved its 2016 target for cash regeneration and will make at least £250m from the acquisition of the Axa businesses. The company generated £486m from its operating companies last year, achieving its target, and of this, £117m came from the integration of the Axa Wealth pensions and protection businesses it bought in November 2016.

Newspaper round-up

UK retail sales continued to grow at the end of last year as Britons made a late dash for Christmas gifts and festive foods, according to industry figures that add to signs the economy ended 2016 on a strong note. The British Retail Consortium (BRC) pointed to challenges ahead from rising costs and political uncertainty but said its members went into the new year having enjoyed solid sales growth over the crucial Christmas period. - Guardian

More than 1,000 jobs could be at risk at Tesco after Britain’s biggest grocer said that it was planning to close two distribution centres “in order to run its business more simply”. It is ending its relationship with DHL and Wincanton logistics and plans to bring all its warehouse operations in-house, while simplifying management at its remaining 23 centres. - The Times

The owner of the Daily Mirror is in talks again with Richard Desmond, the publisher of the Express newspaper titles, about a possible deal between the two groups. Trinity Mirror is expected to make a stock exchange announcement today confirming that it is in early negotiations with Mr Desmond whose media empire also includes the Daily Star and OK! Magazine. - The Times

Three of the City’s leading figures will grilled today by MPs who accuse them of exaggerating the risks of Brexit to make it sound like a Hammer House of Horror script. Douglas Flint, chairman of HSBC, Xavier Rolet, chief executive of the London Stock Exchange, and Elizabeth Corley, chief executive of Allianz Global Investors, will face the Treasury select committee. - The Times

Restaurant giant Whitbread has “secretly” added pork to its lasagne in a cost-cutting move — and sold nearly 250,000 dishes to unaware diners. Brewers Fayre, Table Table and Whitbread Inn have been serving the meals for three months. - The Sun

US close

Ahead of the approaching corporate earnings season, US stocks were mostly down on Monday as the Dow backed away from the 20,000 mark amid a rising dollar and lower oil prices.

On Friday the S&P 500 and the Nasdaq had set new record closing highs, while the Dow was just shy of the 20,000 mark following the non-farm payrolls report, but the new week began on the back foot with the Dow Jones Industrial Average finishing Monday down 0.38% to 19,897.38 and the S&P 500 down 0.35% to 2,268.90.

The Nasdaq 100 was the odd one out, closing 0.36% higher at 5,024.90.

Later this weak earnings season gets into swing with results from big banks JP Morgan Chase and Bank of America.

Michael Hewson, chief market analyst at CMC Markets, said investors were mulling over whether further gains in US markets are sustainable in the longer term.