Morrisons sales deflate, while AstraZeneca inflates revenue guidance

London open

The FTSE 100 is expected to open 11 points higher on Thursday morning, according to sources in the City of London.

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Third-quarter like-for-like sales at Morrison Supermarkets fell at a faster rate than in the previous quarter and worse than expectations. However, management confirmed they expect underlying pre-tax profit to be higher in the second half than in the first.

AstraZeneca’s third quarter revenues were hit by foreign exchange woes, with total revenue of $5.9bn a 2% drop at constant currency rates but a reported decline of 10% at actual rates. The FTSE 100 pharmaceutical company's year to date revenues are flat at constant exchange rates on the previous year at $18.3bn (£11.9bn), with weakness in its key trading currencies against the US dollar resulting in an actual revenue year to date drop of 8%. Despite this, the company has upgraded its revenue guidance - at constant currencies - for the full year from a small decline to in line with the previous year.

RSA Insurance booked a net loss of £16m in the third quarter as a result of the earthquake in Chile, but insisted its turnaround plan is on track as it posted a 1% rise in underlying premium income for the first nine months of the year. After suitor Zurich Insurance announced an end to its interest in acquiring the company in September, chief executive Stephen Hester said the unsolicited approach was a distraction in the third quarter but the business continued to perform well despite that.

Newspaper round-up

Volkswagen needs to tear up its complex corporate governance structure in the wake of the emissions scandal that knocked a further 10% off its share price on Wednesday, according to investors and governance experts. They called for a radical overhaul that would involve the families, state government and sovereign wealth fund that are the carmaker’s biggest shareholders all giving up seats on its supervisory board. – Financial Times

Competition regulators are “lazy” and “passing the buck” as their probe into the banking market failed to find crucial information on the cost of bank accounts, according to MPs. The Competition and Markets Authority is studying the market to see why so few customers switch banks, and last month ordered banks to prompt customers to switch to a rival whenever a special offer runs out, the bank's systems crash for a long period of time, or the customer racks up unauthorised overdraft charges. – Telegraph

Facebook has passed 1.5bn monthly users for the first time in its history, the world’s biggest social network said, as it smashed Wall Street expectations to post an 11pc increase in profits. The social network, which now counts half the world’s internet users as members, grew revenues by 40pc in the three months to September. For the first time, more than 1bn people logged on to Facebook every day, it said, and monthly active users reached 1.55bn, a 14pc increase on a year ago. – Telegraph

Leaving the EU would plunge Britain back into recession, damage the country’s long-term growth potential and drive up government borrowing, Morgan Stanley has warned. In a comprehensive review of the economic impact of an exit vote at the referendum, the American investment bank said that Britain would “flirt with recession” in the best case and collapse into a full-blown slump if there were difficulties in “resolving post-referendum uncertainties”. – The Times

US close

US stocks ended lower as energy stocks declined in line with the oil price and after Federal Reserve chairwoman Janet Yellen hinted at the possibility of a rate hike in December.

The Dow Jones Industrial Average closed down 0.3%, the S&P 500 fell 0.4% and the Nasdaq ended 0.1% lower.

In a testimony before the House of Representatives' financial services committee, Yellen said the committee has made no decision yet but that the US economy was performing well and a rate hike next month was still a “live possibility”.