M&S profits plunge 64pc, Vodafone Malta to merge with local cable operator

London open

The FTSE 100 is expected to open 10 points lower on Wednesday, after closing down 0.15% at 7,485.29 on Tuesday.

Stocks to watch

Although sales remained steady, Marks & Spencer reported a 64% plunge in profits for the year to 1 April after taking a £437.4m hit mainly from changes to its pension scheme, international stores, and UK head office. Keeping the full year dividend at 18.7p, chief executive Steve Rowe outlined causes for optimism as the general merchandise arm' market share started to stabilise and the food business continued to grow like topsy.

Vodafone Group, along with Apax Partners Midmarket and Fortino Capital announced an agreement to combine Melita and Vodafone Malta on Wednesday. The FTSE 100 telco said the transaction would combine Vodafone Malta, the mobile operator with a 4G mobile network covering 99% of the Maltese population, with Melita, Malta's leading cable, broadband and pay TV provider, which has a network covering 99% of Maltese households.

Newspaper round-up

The Bank of England governor, Mark Carney, has fallen victim to an online prankster who got him to joke about one of his predecessor’s supposed drinking habits. Carney was caught out by the same hoaxer who tricked the Barclays boss, Jes Staley, this month. The prankster, who goes by the Twitter handle @SINON_REBORN, emailed Carney from a Hotmail account pretending to be Anthony Habgood, the chair of the Bank’s court. In the exchange, posted on Twitter, Carney appears initially to fall for the prank and tentatively accepts an invitation to a “soiree” in June. – Guardian

London’s thriving economy generates a £26.5bn surplus that is recycled by the government to provide financial help to Britain’s less well-off regions, according to an official breakdown of the public finances. The first attempt by the Office for National Statistics to break down the UK’s budget deficit by region has demonstrated the importance of the capital and highlighted how taxes and public spending are used to narrow the north-south divide. – Guardian

Barclays is being sued for £1.6bn in damages by a US credit card services firm which filed a High Court claim against the British bank for mis-selling a payment protection product at subprime credit card business Monument. CCUK Finance, which used to be known as CompuCredit, bought Monument and its portfolio from Barclays ten years ago. The £390m deal included an indemnity clause relating to customers' claims over mis-sold payment protection policies. – Telegraph

The UK is the world’s third largest global hub for innovation and development in the biosciences sector, new research has found. The UK BioIndustry Association (BIA) has said the country raised more venture capital than San Diego in 2016 and is primed to close the gap on San Francisco and Boston as the two leading centres for life sciences. – Telegraph

Royal Bank of Scotland’s eleventh-hour attempt to avoid a trial over its £12 billion rights issue appeared to have stalled last night after diehard shareholders refused to sign up to an out- of-court settlement. RBS has been urging a 9,000-strong group of investors suing the bank over the cash call to accept an 82p-a-share offer in two days of settlement talks after the start of the trial was adjourned on Monday. – The Times

America’s emergency oil reserve should be halved and the country’s largest wildlife sanctuary opened for drilling to raise billions of dollars to help cut the national debt, President Trump has proposed in his first budget. Draining half of the strategic petroleum reserve, which consists of about 688 million barrels of oil, would raise as much as $16.6 billion over the next decade, according to White House plans published yesterday. – The Times

US close

Wall Street finished in the green on Tuesday, as traders shrugged off weaker-than-expected readings on the US economy.

The Dow Jones Industrial Average finished up 0.21% at 20,937.91, while the S&P 500 pushed 0.18% higher at 2,398.42 and the Nasdaq 100 ended 0.07% firmer at 5,703.35.

IHS Markit's manufacturing sector purchasing managers' index retreated unexpectedly from a reading of 52.8 for April to 52.5 in May, against a consensus forecast for 53.4.

That was offset by a jump in an equivalent gauge for the country's services sector from 53.1 in April to 54.0 for May - a four-month high.

Commenting on Tuesday's PMI surveys, Chris Williamson at Markit said: "Growth of US business activity gained a little momentum for a second successive month in May, but the upturn still looks somewhat underwhelming.”

US new home sales plummeted 11.4% month-on-month in April to reach 569,000, falling short of forecasts for 610,000, although the blow from the data was softened by upwards revisions to the prior month’s figures.