TUI boosts earnings in face of lower revenue, National Grid to sell down gas distribution arm

London open

The FTSE 100 is expected to open 17 points higher on Thursday, after closing up 1.81% at 6,902.23 on Wednesday.

Stocks to watch

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.

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.

Newspaper round-up

The Government tried to “parachute” a vocal advocate of Channel 4 privatisation onto the broadcaster’s board, it has emerged, as part of a battle over its future that has triggered a row over diversity in television and political interference. The Department of Culture, Media and Sport put forward David Elstein, the Daily Telegraph reported, who is a former chief executive of Channel 5, late in a long-running search for four new non-executive directors. - Telegraph

Glencore is among the investors to have paid €10.5bn for an almost 20% stake in Russia’s state oil firm, Rosneft. The London-listed commodities trader will invest alongside Qatar as part of a Kremlin strategy of selling assets to raise funds needed to fill a hole in its budget, apparently left by low oil prices. Kremlin spokesman, Dmitry Peskov, described the deal as the largest in the global energy industry this year. - Guardian

US close

US equity markets ended in the black on Wednesday, with all three major indices registering their biggest gains since the election despite weakness in the healthcare sector.

The Dow Jones Industrial Average rose 1.6%, the S&P 500 gained 1.3% and the Nasdaq climbed 1.1%.

Sentiment was boosted by a strong showing in Europe, where stocks advanced amid hopes of a bailout for Italy’s struggling banks, with Banca Monte dei Paschi di Siena higher following a report that Italy could ask for a €15bn European Stability Mechanism loan to help it and other beleaguered banks.

More broadly, investors were looking ahead to Thursday’s rate announcement by the European Central Bank amid rising expectations that it will extend its bond-purchasing programme, particularly following the outcome of the Italian referendum.

Market participants also had their eyes on next week’s Federal Reserve policy announcement, with a rate hike now fully priced in.

In commodity markets, oil prices settled lower after the US Energy Information Administration said domestic crude supplies fell by 2.4m barrels in the week ended 2 December. Brent crude was down 1.7% to $53.03 per barrel, while West Texas Intermediate was 2.1% lower at $49.88.