United Utilities in line, Wolseley improving

London open

The FTSE 100 is forecast to open marginally lower on Tuesday, extending the slight loss from the day before.

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United Utilities said underlying operating profit for 2015/16 would be in line with management expectations, albeit lower than 2014/15, reflecting new regulated price controls, an expected increase in infrastructure renewals expenditure (IRE), depreciation, employee and other operating costs, partly offset by a reduction in bad debts and regulatory fees. Reported operating profit will be impacted by additional costs and asset impairments incurred in relation to the floods in the North of England in December 2015, although United expected these charges to be largely offset by insurance proceeds.

Building materials company Wolseley delivered a resilient trading performance in the first half, despite mixed market conditions and sustained deflationary headwinds. Market conditions remain mixed but after a low point in November, like-for-like revenue growth over the subsequent three month period to 29 February 2016 improved to 3.2% for the group and 5.7% in the USA.

Revenue and earnings were up thanks to strong demand for the luxury wares of Jimmy Choo in 2015, particularly in Asia and Japan, with the firm reporting revenue growth of 7.2% at constant currencies on Tuesday. The upmarket shoemaker consolidated net income increased £30.2m into the positive figures, reaching £19.4m, and adjusted EBITDA grew 1.5% to £51m.

Newspaper round-up

Mike Ashley admitted yesterday that Sports Direct was in trouble, blaming MPs for creating a spiral of negative publicity surrounding the company. Mr Ashley told The Times he had concerns that the sportswear retailer, which employs about 18,000 people in Britain, was losing momentum and said that he would refuse to appear before a Commons select committee in June. – The Times

Britain’s biggest companies could face a credit downgrade – potentially forcing up their borrowing costs – should the UK vote to leave the EU in June, according to a report by a leading ratings agency. Moody’s said the prospect of lengthy and uncertain negotiations would deter foreign investors and limit the profits of mainstream corporations that trade with the rest of the EU. But banking and insurance would be less affected than non-financial companies. – Guardian

It was the crisis that dealt a “final blow to Britain’s self-image as a world power to be reckoned with”. Now a Bank of England policymaker has warned that Britain could face another Suez-style crisis in the run-up to the European Union referendum. Kristin Forbes, an external member of the Bank’s monetary policy committee, made the comparison in a speech in London yesterday, in which she said that the UK’s heavy dependence on foreign financing could make it vulnerable in the face of a possible Brexit. – The Times

US close

US stocks eked out gains during a relatively quiet trading session on Monday, with telecommunications and healthcare stocks leading the risers.

The S&P 500 finished up 0.1% at 2,051.60, theDow Jones Industrial Average closed up 0.12% at 17,623.87, and the Nasdaq ended the day up 0.28% at 4,808.87.

Oil rose during the US session remaining well above the $40 mark, with West Texas Intermediate up 1.32% at $41.69, while treasury yields also rose, with the two year touching close to 0.87% and the 10 year at 1.92%.

On the economic front, existing home sales declined to their lowest level since November in February, to an annual rate of 5.08m units, which was worse than expected data and led Goldman Sachs, and others, to lower first quarter GDP growth forecast by 0.1 percentage points to 2.3%.