Tesco delivers first quarter ahead of expectations, Rolls-Royce starts year off 'well'
London open
The FTSE 100 is expected to open 14 points higher on Friday, after closing down 0.74% at 7,419.36 on Thursday.
Stocks to watch
In spite of tough conditions for the retail industry, Tesco romped off to a strong start to its new financial year, with the grocer delivering first quarter UK sales ahead of City expectations. UK like-for-like food sales up 2.7% and UK total LFL sales up 2.3%, versus a consensus forecast of 1.9%, saw group LFL sales increase 1.0%.
Rolls-Royce Holdings issued a pre-close trading update on Friday, as it prepared to meet investors over the next fortnight at the Paris Airshow - and ahead of its half year results on 1 August - claiming it had started the year “well”, with all businesses performing in line with expectations. The FTSE 100 company said that as a result, group expectations for first half revenue, profit and free cash flow remained unchanged from that provided at its annual general meeting in May.
Newspaper round-up
For the best part of a decade, Greece has wanted to become a “normal” country, and late on Thursday it appeared to begin that process, after creditors agreed to disburse €8.5bn (£7.4bn) of bailout funds aimed at putting the debt-stricken nation back on the road to recovery. The money, signed off after months of disagreement between the European Union and International Monetary Fund over how to reduce Athens’ staggering debt pile, will be released in July, once European parliaments ratify the deal. - Guardian
More than half of Morrisons shareholders have failed to back the supermarket’s bosses’ pay package in a massive protest vote. Investors representing 48% of its shares voted against the company’s remuneration report, rising to 51% with abstentions, as Morrisons held its annual shareholder meeting at its HQ in Bradford on Thursday. – Guardian
The company behind some of London’s largest estate regeneration projects has been sold by its Chinese owner to private equity firm Starwood and a newly-established asset management firm. Pinnacle carries out regeneration projects across the UK in partnership with councils. It has been owned by the Cheng family, whose company Knight Dragon owns vast swathes of the Greenwich Peninsula. - Telegraph
Fast-growing industrials business Liberty has been spurned in its attempts to buy Australian collapsed steel and mining business Arrium. Entrepreneur Sanjeev Gupta had been hoping to rescue the South Australia business out of administration to expand his UK-based Liberty Industries Group, part of the GFG Alliance which has energy and mining interests. – Telegraph
The chief executive of FirstGroup has had his £723,415 annual bonus withheld because of the Croydon tram crash in which seven people died and 58 were injured. In its annual report, published yesterday, the company told shareholders that it would not be appropriate for Tim O’Toole, 61, to get the cash and shares that he would otherwise have been due. – The Times
A leading shareholder in Fusionex has succeeded in an effort to delist the company from the Alternative Investment Market in a move that has angered minority shareholders and raised questions about the regulation of London’s junior market. Ivan Teh, chief executive and founder of the software and IT group, said he was “grateful for the overwhelming support we received from our shareholders who voted in favour of the proposed delisting”. – The Times
US close
Wall Street's main market gauges continued to pull back on Thursday, with a stronger dollar in the wake of Wednesday's Fed policy decision taking its toll on commodity-related stocks alongside renewed falls in the largest big-cap tech names, the so-called FANG contingent.
The Dow Jones Industrial Average finished down 0.07% at 21,359.90, while the S&P 500 lost 0.22% to 2,432.46 and the technology-heavy Nasdaq 100 was off 0.46% at 5,700.89.
On Wednesday, the Federal Reserve lifted interest rate targets for the second time this year by 25 basis points to between 1 and 1.25%, as expected, with chair Janet Yellen reiterating that inflation was expected to return to target, and forecasting one more hike this year.
She added that policymakers would be watching low inflation numbers closely after some disappointing readings.
US economic data out on Thursday was a tad mixed, with industrial production figures for May printing slightly below analysts forecasts even as the widely-followed Philly Fed factory gauge for June beat expectations slightly.
"Manufacturing sentiment points to continued improvement in near-term activity due to better fundamentals, improving global growth, elevated equity prices and more efficient oil and gas firms," said Roiana Reid at Berenberg Capital Markets following the releases.