Smith & Nephew earnings beat consensus, Aviva offloads 50pc stake in Antarius
London open
The FTSE 100 is expected to open five points higher on Thursday, after closing up 0.04% at 7,188.82 on Wednesday.
Stocks to watch
In spite of declining sales in the fourth quarter, Smith & Nephew reported full year sales in line with forecasts and earnings beating the consensus. For 2017 the medical devices group said it expected stronger revenue growth and an improvement in trading profit margin.
Aviva is to sell its 50% stake in life insurance joint venture Antarius to Sogecap, a subsidiary of French bank Société Générale, for £425m (€500m). The sale of Antarius, which is currently owned by Aviva and Crédit du Nord, a separate subsidiary of Société Générale, follows Crédit du Nord's decision in 2015 to exercise its option to buy Aviva's stake in Antarius.
BHP Billiton announced on Thursday that its board had approved expenditure of $2.2bn for its share of the development of the Mad Dog Phase 2 project in the Gulf of Mexico. The FTSE 100 firm holds a 23.9% participating interest in the Mad Dog field. Mad Dog Phase 2 includes a new floating production facility with the capacity to produce up to 140,000 gross barrels of crude oil per day from up to 14 production wells, with production expected to begin in the 2022 financial year.
Newspaper round-up
Waitrose is planning to close six stores and remove a level of management in its supermarkets, putting 600 jobs at risk. The upmarket grocer began consulting with staff at the six stores – in Hertford, Staines, Leek, Huntingdon, Cardiff Queen Street and Palmers Green in north London – on Monday ahead of planned closures later this year. The company said it hoped to replace the Palmers Green store with a new outlet in nearby Winchmore Hill. – Guardian
McLaren Automotive is to open a £50m manufacturing plant in Sheffield that will create more than 200 jobs. The McLaren composites technology centre will build carbon-fibre chassis for future McLaren sports cars. Full production will begin at the site by 2020. - Guardian
The Greek crisis intensified on two fronts as the likely US ambassador to the EU said the eurozone might break up, and the Netherlands warned it will not take part in another bailout if the International Monetary Fund drops out of the process. Ted Malloch, President Donald Trump’s pick as the US representative in Brussels, said there is a question mark over the survival of the euro. – Telegraph
British politicians have “lost touch” with voters and elitist bids to suppress the EU debate made the referendum on membership that led to the Brexit vote “inevitable”, Mervyn King has said. The former governor of the Bank of England said he “resent[ed]” suggestions by friends and acquaintances that Britons who “even contemplated” voting for Brexit were “ignorant” or “racist”. – Telegraph
New energy suppliers could face strict financial checks and existing companies could be subjected to stress tests, under a regulatory shake-up being considered by Ofgem. The energy watchdog is expected to announce today that it will carry out a review of the rules governing suppliers, amid growing concern that they can be set up too easily and that more could go bust after the demise of GB Energy Supply last year. – The Times
An influential consultancy that advises institutional shareholders on whether to veto company bonus schemes has triggered concern by touting a service to boards to help them to sidestep investor revolts in the coming AGM season. Institutional Shareholder Services, the world’s biggest proxy voting agency, has told UK-listed company boards that it can identify potential problem pay schemes and suggest tweaks and favourable language to ensure that they win shareholder approval. – The Times
US close
US stocks ended mostly a little firmer on Wednesday, recouping earlier losses as oil prices settled higher.
The S&P 500 rose 0.1% to 2,294.67 and the Nasdaq edged up 0.2% to a record 5,682.45. The Dow Jones Industrial Average fared less well, finishing the session 0.2% lower at 20,054.34, with financials such as Goldman Sachs and JP Morgan Chase weighing on the index amid falling yields.
Oil prices settled higher, recovering from earlier losses, with West Texas Intermediate up 0.4% to $52.40 a barrel and Brent crude 0.2% higher at $55.17.
The Energy Information Administration said crude inventories rose by 13.8m barrels to 508.6m in the week ended 3 February. Analysts had estimated a build of 2.5m barrels.
But traders said investors chose to focus instead on an unexpected drop in gasoline stocks. According to the EIA, gasoline declined by 869,000 last week, compared to estimates for it to rise by more than a million barrels.
Prices had been under pressure after figures on Tuesday from the American Petroleum Institute showed a 14.2m barrel build in its crude oil inventory last week, compared to a 5.8m barrel rise the week before and expectations for a 2.5m build.