Paddy Power Betfair targets in Trump-slump, Petra production sparkles in first half

London open

The FTSE 100 is expected to open 39 points lower on Monday, after closing down 0.14% at 7,198.44 on Friday.

Stocks to watch

Paddy Power Betfair said it would not hit its top-end targets after Donald Trump's unexpected US election win and several other punter-friendly sporting results at the end of the year cost it around £40m. However, the FTSE 100 group said it still expected to make underlying earnings before interest, tax, depreciation and amortisation around the midpoint of its November guidance of £390-405m.

Essentra, a maker of cigarette filters and plastic packaging, warned that it expects profit will be below expectations to a due to a more challenging than previously anticipated Health & Personal Care Packaging unit, which has been experiencing operational issues The FTSE 250 company said that due to continuing operational issues in the unit, there was a further “significant” decline in revenue and profitability during the last two months of 2016, and there is no expectation of a near-term improvement in 2017.

Petra Diamonds posted its unaudited trading update for the six months to 31 December on Monday reporting a production increase of 24% to 2,015,087 carats. The FTSE 250 company put the improvement down to an increased contribution from undiluted return-of-mine ore leading to improved return-of-mine grades, and additional tailings production from Kimberley Ekapa Mining. It said it remains on track to deliver full year production of between 4.4 and 4.6 million carats.

Newspaper round-up

Financiers are losing confidence in the economy and one of the country’s most closely watched forecasting panels has predicted a three-year grind of slow growth. The gloomy expectations come as officials prepare this week to publish their first estimate for growth in the final quarter. This is expected to slow slightly from 0.6 per cent in the second and third quarters to 0.5 per cent in Q4. - The Times

Theresa May will signal an era of greater state intervention in the economy as she launches her industrial strategy with a promise of “sector deals”, a new system of technical education and better infrastructure. The prime minister will publish the strategy at a cabinet meeting in the north-west of England, setting out five sectors that could receive special government support: life sciences, low-carbon-emission vehicles, industrial digitalisation, creative industries and nuclear. - The Guardian

One of the City’s most influential fund managers is trying to put Bovis Homes in play after calling for Berkeley Group to consider an all-paper merger with its troubled rival. Andy Brough, of Schroder Investment Management, which has an 8.1 per cent stake in Bovis, has written to the Berkeley board, led by Tony Pidgley, urging it to consider a marriage with Bovis to accelerate its expansion outside London. - The Times

British-based factory workers producing garments for a string of top fashion brands are being paid less than half the legal minimum wage, a new undercover film claims. Textile firms making products for fashion retailers such as River Island, New Look, Boohoo and Missguided are paying their UK workers between £3 and £3.50 an hour, Channel 4’s Dispatches will allege on Monday night. - The Guardian

The UK’s small, privately-owned pharmaceutical companies often go under the radar, but they’re playing an increasingly important role in Britain’s healthcare sector and posting impressive growth rates, according to a report from consultants Catalyst Corporate Finance. As big players such as GlaxoSmithKline and AstraZeneca come under pressure from rising R&D costs, stricter regulation and outcomes-based reimbursement, they’re outsourcing parts of their business that would historically have been done in-house to specialist companies. - Telegraph

US close

Markets in New York closed higher on Friday, as the nation watched its new president be inaugurated in front of a particularly sparse Washington DC crowd.

The Dow Jones Industrial Average finished 0.48% higher at 19,827.25, the S&P 500 was up 0.34% at 2,271.31, and the Nasdaq 100 ended the day 0.24% firmer at 5,063.20.