Sales up in first quarter at Morrisons, BT to shed 13k jobs
London open
The FTSE 100 is expected to open 38 points higher on Thursday, having closed up 1.26% at 7,662.52 on Wednesday.
Stocks to watch
Morrisons updated the market on its trading on Thursday, reporting that for the 13 weeks to 6 May, group like-for-like sales excluding fuel were up 3.6%, comprising contributions from retail of 1.8% and wholesale of 1.8%. The FTSE 100 supermarket said group like-for-likes including fuel were up 1.9%. Total sales were ahead 3.8% excluding fuel, and 2.1% including fuel.
BT Group announced 13,000 back office job cuts as part of a new operating strategy that aims to cut £1.5bn of costs within three years, launch 'converged' products and increase full-fibre broadband. The former UK telecoms monopoly also revealed a £11.3bn pension funding deficit and final results showing revenue down 1% after a 3% decline in the fourth quarter.
House builder Barratt Developments said total forward sales were up 2.5% in the calendar year to May 6 to £3.3bn, adding that current trading was in line with expectations. The company said it expected its net cash position at 30 June 2018 to be better than previous guidance at around £550m.
Royal Bank of Scotland has agreed to pay $4.9bn (£3.6bn) to settle a long-running investigation by the US Department of Justice into the bank’s dealing in mortgage-backed securities before the financial crisis. Chief executive Ross McEwan said settling the case was a milestone and that removing uncertainty over the size of the fine had made RBS’s investment case clearer.
Newspaper round-up
A cut to the maximum stake on addictive betting machines to £2 has been delayed after a senior minister led a cabinet revolt against the plans. The Department for Culture, Media and Sport planned to announce the reduction today after winning over sceptics in the Treasury but a source close to the cabinet says Esther McVey, the work and pensions secretary, has strongly objected to the plan. - The Times
The chairman of 21st Century Fox, Lachlan Murdoch, said the media company planned to press ahead with plans to merge with Disney and take full control of Sky on Wednesday but said the company was considering its options as cable giant Comcast prepares a higher bid. Last December Fox agreed to sell most of its cable and studio assets to the Walt Disney Company. It is also looking to acquire the shares of Sky it doesn’t already own. - Guardian
BP’s bid to sell the North Sea gas field it owns with Iran could face an eleventh hour delay as the threat of US sanctions raises concern for the industry regulator. The Oil and Gas Authority (OGA) is expected to pause the £300m deal agreed between the oil major and North Sea minnow Serica Energy late last year because the sale includes the Rhum gas field which is part-owned by Iran’s state oil company. - Telegraph
Ministers are facing calls to reassure businesses in key sectors including manufacturing and farming that they will be adequately defended from unfair trading practices after Britain leaves the European Union. In a new report, the Commons international trade committee expressed “serious concerns” over whether the Trade Remedies Authority, which will handle trade disputes and consider how best to protect industries, will be operational in time for Brexit next March. - The Times
Shoppers face a significant rise in food prices if the government fails to secure a free trade deal with the European Union, peers have warned. In a bleak assessment of the impact of Brexit, the Lords EU energy and environment subcommittee suggested grocery costs would rise, businesses could go bust and year-round supplies be put at risk. - Guardian
ZTE, one of the world’s largest telecom equipment makers, may be the first major casualty of a trade war brewing between China and the US. The Shenzhen-based company said it had ceased “major operating activities”, in a filing late on Wednesday to the Hong Kong stock exchange. - Guardian
US close
Wall Street finished in the green on Wednesday, after energy shares were given a boost by Donald Trump's decision to withdraw from the Iran nuclear deal.
The Dow Jones Industrial Average ended the session up 0.75% at 24,542.54, the S&P 500 added 0.97% to 2,679.79, and the Nasdaq 100 was 1.14% higher at 6,893.21.
Trump said on Tuesday evening that the US would exit the 2015 multilateral agreement over Iran’s nuclear ambitions, and reimpose sanctions on the country.
He said in a statement that it was a "horrible, one-sided deal that should never, ever have been made" and that rather than protecting the US and its allies, it placed "very weak limits on the regime's nuclear activity".
European powers, meanwhile, reiterated their commitment to the 2015 agreement, while Iranian President Hassan Rouhani said that for now, he considers the deal to be intact.
Although Trump had been widely expected to announce the withdrawal, analysts said the threat that he would also penalise anyone who helps Iran is likely to have a lasting impact on markets.