London pre-open: ECB, Italian banks in focus
Stocks in London were expected to start the session only slightly higher despite outsized gains overnight on Wall Street that saw the Dow Jones Industrials, S&P 500 and Russell 2000 all set fresh record highs.
The Footsie was seen starting the day by up to 25 points higher from Wednesday´s closing level, with all eyes on the European Central Bank´s policy meeting, later in the day and the rapidly changing situation among Italy´s banks.
Governing council members at the European Central Bank were expected to announce between a six to nine-month extension in their monthly asset purchase programme at the current pace of €80bn a month.
Just as important, the ECB was set to release its most recent short-term economic forecasts and investors would be keen to know its thinking on recent events in Italy and what steps it would support in restoring the health of that country´s financial sector.
Acting as a backdrop, Chinese exports grew 0.1% year-on-year in November following a drop of 7.5% in October, outpacing forecasts for a drop of 5.0%.
"The pick-up reflects a strengthening in global demand, with recent business surveys suggesting that the global economy is on track to end the year on a strong note. The improvement appears to be broad based, with Chinese exports to the US, EU and other emerging markets all increasing," said Julian Evans-Pritchard, China economist at Capital Economics.
Capita lets go deadweight
Dogged by weak growth and high debts, Capita has decided to offload the majority of its Asset Services division and a small number of other 'non-core' businesses in order to focus fully on business process outsourcing. The FTSE 100 company, whose shares have been in freefall since a profit warning in September, also cut its full year guidance for underlying profit before tax to be at least £515m down from its previously lowered range of £535-555m, and said the headwinds affecting the business are expected to produce a similar trading performance in the full-year 2017.
Utility company National Grid is to sell a 61% stake in its gas distribution business to a consortium of investors for about £3.6bn and return £4bn to shareholders. It will retain a 39% minority stake in the new holding company for the business and receive £1.8bn from additional debt financing.
Germany-based travel and tourism provider TUI delivered its full-year results to 30 September on Thursday, with a 12.5% increase in underlying EBITA including Travelopia to €1bn, or 14.5% for continuing operations to €1.03bn. Turnover was down slightly, dipping 1.9% to €17.19bn, though it improved 1.4% at constant currencies. The FTSE 100 firm’s board said it expects to deliver at least 10% growth in underlying EBITA in 2016/17, and extended its previous guidance of at least 10% underlying EBITA CAGR to 2018/19.