(Alliance News) - Markets were on edge early Friday, after the US killed a senior Iranian military leader in Iraq. The dollar, gold and oil all were benefiting from the tense mood.
But London also received reassuring news from a bellwether retailer
In the first Christmas trading update of the season, Next upped its annual profit guidance and said it expects further improvement in financial 2021 after fourth-quarter performance came in ahead of internal forecasts.
The FTSE 100 home and fashion chain reported that total full price sales - which include interest income - grew by 5.2% on a year before in the period from October 27 to December 28. Next said the result was 1.1% ahead of its internal forecasts.
"We believe our sales performance in the period was helped by a much colder November than last year and improved stock availability in both our Retail stores and Online," Next said in its statement Friday.
Therefore, Next increased its pretax profit guidance for the financial year to the end of January by GBP2 million to GBP727 million, which will represent a 0.6% growth on last year.
Next said it expects full price sales growth of 3.9% in financial 2020, which is 0.3 percentage point ahead of its guidance given in October.
Looking further ahead, Next said it expects to deliver a 3.0% full price sales growth in financial 2021, resulting in pretax profit growth of 1% to GBP734 million. This guidance is based on a 52-week sales period. However, Next highlighted that the financial year to the end of January 2021 will be a 53 week year, resulting in an additional week of sales, which is expected to generate an extra GBP13 million of profit.
The stock was up 1.0% in early trade Friday.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: down 0.4% at 7,575.01
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Hang Seng: down 0.4% at 28,433.00
Nikkei 225: Tokyo market closed for holiday
DJIA: closed up 330.36 points, 1.2%, at 28,868.80
S&P 500: closed up 0.8% at 3,257.85
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GBP: down at USD1.3087 (USD1.3155)
EUR: down at USD1.1152 (USD1.1185)
Gold: up at USD1,544.05 per ounce (USD1,527.98)
Oil (Brent): up at USD68.36 a barrel (USD65.76)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Friday's Key Economic Events still to come
Japan financial markets closed after New Year's Day.
0930 GMT UK CIPS-Markit construction purchasing managers index
0930 GMT UK money and credit - lending to individuals
1000 CET EU monetary developments in the euro area (M3)
1400 CET Germany provisional consumer price index
1030 EST US EIA weekly natural gas storage report
1100 EST US EIA weekly petroleum status report
1400 EST US Federal Open Market Committee meeting minutes and economic forecast
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Iran's Supreme Leader Ayatollah Ali Khamenei has threatened the US with "harsh retaliation" after the killing of influential Iranian General Qassem Soleimani, Iranian state television reported. Soleimani's path would continue without him, but the perpetrators would face severe revenge, Khamenei said. Soleimani's death would not affect what he termed Islam's final victory over "the imperialists," Khamenei said in remarks carried on state television. Khamenei also declared three days of national mourning. The Defense Department in Washington confirmed earlier that Soleimani was killed in an attack near Baghdad airport in the early hours of Friday, in what the US described as "defensive action" strikes. Soleimani was killed along with with the deputy head of Iraq's powerful Shiite Hashd Shaabi militia, Abu Mahdi al-Mohandes, the group said.
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UK shop prices continued to decline in December as discounts deepened and began earlier amid retailers' efforts to keep customers shopping, the British Retail Consortium-Nielsen Shop Price Index showed. The BRC-Nielsen Index, covering the first week of December, showed annual shop prices were flat in December compared with November. On a year-on-year basis, prices were down 0.4% in December. "Shop prices continued to fall in December as receding inflationary pressures, weak consumer demand and intense competition combined to keep price increases at bay. 2019 has been a particularly challenging year, with historically weak sales growth," said BRC Chief Executive Helen Dickinson. Non-food prices declined by 1.5% in December on a year before, slowing from a 1.6% annual decline in November, while food inflation remained steady at 1.4%.
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House price growth in the UK decelerated in December, Nationwide reported. House prices in December grew 0.1% on November, after November had risen 0.5% on October. On an annual basis however, house prices increased by 1.4%, accelerating from the 0.8% year-on-year rise recorded in November. "Annual UK house price growth edged up as 2019 drew to a close, with prices 1.4% higher than December 2018, the first time it been above 1% for 12 months," said Nationwide Chief Economist Robert Gardner.
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The UK housing market should start 2020 with a new mood of confidence, but continued political uncertainties will keep a lid on property prices, economists predict. Several predictions for house price growth across 2020 are clustered around the 2% mark. Experts said the Conservatives' recent general election win could help to bring more certainty to the UK market and unleash some pent-up buyer demand. An abundance of low-rate and low-deposit mortgage deals should also support activity. Some estate agents are even sensing there may be a "Boris bounce" for the housing market, which could in the coming months have an effect on house prices.
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Navy ships plucked hundreds of people from beaches and tens of thousands were urged to flee on Friday before a predicted worsening in Australia's already-devastating wildfires. More than 200 fires were burning, and warnings of extreme danger to come on Saturday amid more high temperatures and strong winds set in motion one of the largest evacuations in Australian history. Thousands have already fled at-risk coastal areas, creating traffic gridlock in places, while firefighters escorted convoys of evacuees as fires threatened to close roads. Victoria Premier Daniel Andrew declared a disaster across much of the eastern part of the state, allowing the government to order evacuations in an area with as many as 140,000 permanent residents and tens of thousands more holidaymakers.
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BROKER RATING CHANGES
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PEEL HUNT RAISES HOMESERVE TO 'BUY' ('ADD') - TARGET 1450 (1350) PENCE
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COMPANIES - FTSE 100
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British American Tobacco welcomed regulations announced on Thursday by the US Food & Drug Administration, saying they acknowledged that a properly regulated vapour category provides a credible alternative to smoking. However, the regulator addressed the important issue of preventing the access and appeal of vapour products to youth, BAT said. The FDA said cartridge-based e-cigarettes in flavours other than tobacco or menthol will become illegal unless specifically authorised by the government. BAT said this regulatory clarity is expected to return the US vapour market to stability, following a period of "disruption and uncertainty". Back in September, some US states banned flavoured e-cigarettes, which have been available in the country since 2006, amid an outbreak of severe pulmonary disease that has killed seven people and sickened hundreds. The move followed the announcement from US President Donald Trump's administration that it would soon ban flavoured e-cigarette products to stem a rising tide of youth users. BAT said the guidance from US FDA is clear that flavours can return to the market place once they have been cleared through the premarket tobacco application process. PMTA is an application that must be reviewed and approved by the FDA before a new tobacco product can be legally marketed in the US.
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COMPANIES - OTHER MAIN MARKET AND AIM
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Irish budget airline Ryanair said traffic in the month of December grew by 9% to 11.2 million passengers compared to 10.3 million carried a year earlier. For the year as a whole, the number of passengers it carried also increased by 9%, to 140.2 million.
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Hotel Chocolat is asking landlords for clauses in rent renegotiations that match any rent cuts pushed through by rivals via a popular form of insolvency. Company Voluntary Arrangements, whereby a retailer asks landlords for a rent cut to avoid going bust, has been a popular route out of difficulties for struggling high street chains. But Angus Thirlwell, co-founder and chief executive of Hotel Chocolat Group, told the PA news agency he was fed up with getting "penalised for being successful" by subsiding rent cuts for others, and called for "fairness" from landlords.
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COMPANIES - INTERNATIONAL
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Credit Suisse has started a new round of share buybacks, it said. The Swiss bank completed its buyback programme for 2019 on Monday, it said, repurchasing CHF1.00 billion worth of stock. On December 11, Credit Suisse had announced the programme for 2020. This has now begun and will see Credit Suisse purchase up to CHF1.5 billion in shares.
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Friday's Shareholder Meetings
Prime People (re share reduction)
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By Tom Waite; thomaslwaite@alliancenews.com
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