Pre-tax profits rise at Grafton, Ferrexpo unable to identify use of Blooming Land funds

London open

The FTSE 100 is expected to open one point higher on Friday, having closed up 0.98% at 7,184.32 on Thursday.

Stocks to watch

Half year pre-tax profits at builders merchant Grafton rose 5% to £88.2m as the company said it was exiting the Belgian market and had struck a deal with an unnamed buyer. Revenue rose 2% to £1.4bn despite Brexit uncertainty in the UK as Ireland and the Netherlands both recorded strong results. The company warned it expected the UK and Irish macro economic environment to weaken in the short term if Britain left the European Union without a deal.

An independent review committee established by Ferrexpo has failed to find the ultimate use of money the company donated to the Blooming Land Charity, leaving open the possibility that some of the funds could have been misappropriated. The iron pellet producer said it remains aware of various tax and other investigations concerning its relationship with the charity, and said the two parties have now terminated their relationship.

Newspaper round-up

A fire has torn through lorry trailers at a domestic appliance factory in Peterborough, sending large clouds of thick black smoke over the city. About 50 firefighters worked to bring the blaze under control at the Whirlpool UK headquarters in Shrewsbury Avenue, with up to 40 trailers affected. Witnesses used social media to report hearing explosions as billowing clouds of dark smoke were visible for miles. There were no reported casualties, and residents were warned to keep their doors and windows closed. – Guardian

Toyota is planning to halt production at its factory in Burnaston on 1 November in anticipation of possible disruption to deliveries of parts, amid growing concern among manufacturers that the UK is heading for a no-deal Brexit on 31 October. Staff at the Derbyshire plant will not work on Friday 1 November and will return on the following Monday. The Japanese carmaker does not plan to reduce volume and staff will have to work the hours lost to the production pause at a later point. – Guardian

The trade war is already dragging down China’s economic growth and could end up costing it another $2.5 trillion of lost potential GDP if the battle with the US intensifies further, credit ratings agency Standard and Poor’s has warned. After years of growth at above 6pc per year, S&P anticipates a sharp slowdown to 4.6pc per year over the next decade. But if relations worsen further with more hikes to tariffs and other trade controls, the reality could be far worse. – Telegraph

Over £1bn was wiped from the valuation of Micro Focus after Britain's second biggest listed tech company issued a revenue warning which could trigger its ejection from FTSE 100 next week and pave the way for a possible sale or break-up of the business. Micro Focus shares slumped almost a third on Thursday after a shock trading update slashed revenue forecasts and announced a management review. The Newbury-headquartered software firm could be axed from the leading blue chip index after falling as low as 118th place on the list of the UK’s largest listed companies. – Telegraph

The world’s biggest oil company is erring towards Tokyo as the international venue for its planned $2 trillion stock market listing in a potential snub to London. Saudi Aramco, the state-controlled oil giant, has been targeting an initial public offering for several years as part of the crown prince Mohammed bin Salman’s plans to diversify the kingdom’s economy. – The Times

More than a million square feet of office space was taken up in the City of London last month. This was more than double the figure for June and the best for almost two years. The figures from Savills, the property consultancy, suggest that the City is well placed to retain its dominance as a global centre despite predictions by bankers, politicians and analysts that Britain’s impending departure from the EU would lead to an exodus of financial services jobs and businesses. – The Times

US close

Stocks finished higher in the US on Thursday, as China's desire to calmly wrap up its trade war with the US gave investor sentiment a much-needed boost.

The Dow Jones Industrial Average ended the session up 1.25% at 26,362.25, the S&P 500 added 1.27% to 2,924.58, and the Nasdaq 100 was 1.51% firmer at 7,702.31.

Following on a late rally during the previous session, the Dow had opened 257.69 higher after China's commerce ministry stated that it wanted to bring an end to its protracted trade dispute with the US in a "calm" manner.

China also said it was not interested in escalating tensions at the moment, hinting that it may not retaliate with tariffs of its own on Sunday, and that the two sides remained in contact with the aim of continuing negotiations, perhaps in September.

Beijing's comments seemingly did their part to soothe investors even as concerns regarding the possibility of a global recession remained in focus.