(Alliance News) - Stock prices in London are seen opening marginally lower on Tuesday as concerns over a second wave of coronavirus infections in some parts of the world weighs on sentiment.
In early company news, property company Land Securities cut is dividend reported a sharp annual loss, as coronavirus-driven shutdowns forced tenants to default on rent payments. Telecoms firm Vodafone Group kept its own dividend unchanged. Grocer WM Morrison Supermarkets reported growth in first-quarter sales.
IG futures indicate the FTSE 100 index is to open 6.13 points lower at 5,933.60. The blue-chip index closed up 3.75 points, or 0.1%, at 5,939.73 on Monday.
Vodafone said it delivered a good financial performance in light of the coronavirus outbreak.
For the financial year ended March 31, the mobile phone operator swung to a pretax profit of EUR795 million from a loss of EUR2.61 billion in financial 2019 on revenue which rose 3% to EUR44.97 billion from EUR43.67 billion last year.
Vodafone said adjusted earnings before interest tax depreciation and amortisation grew by 2.6% to EUR14.9 billion, reflecting revenue progression and cost savings success. Free cash flow grew by 12% to EUR4.9 billion.
Vodafone kept its total dividend unchanged at 9.0 euro cents.
Looking ahead, Vodafone guided for financial 2021 adjusted Ebitda to be flat to slightly lower from EUR14.5 billion.
Land Securities said its annual results were hurt by the effects of Covid-19 and the longer-term societal and economic consequences are yet to be determined.
For the financial year to March 31, the commercial property developer's pretax loss widened to GBP837 million from a loss of GBP123 million in financial 2019 as revenue slipped 6.3% to GBP414 million from GBP442 million.
The company said the value of its assets fell 8.8% in the recent year to GBP1.18 billion from a decline of GBP557 million last year.
LandSec slashed its full-year dividend 49% to 23.2 pence per share from 45.55p last year.
"As a result of the significant uncertainty surrounding Covid-19, the board took the difficult decision in early April to cancel the third interim dividend. With limited change in the situation since then, the board is also not proposing the payment of a final dividend. We recognise that this is disappointing as income is an important component of our return for shareholders and are committed to resuming dividends at an appropriate level as soon as conditions stabilise," said Chief Executive Mark Allan.
WM Morrison Supermarkets reported sales growth in the first quarter despite "highly volatile" trading patterns and a worse-than-expected Easter due to the ongoing coronavirus lockdown in the UK.
For the 14-week period from February 3 to May 10, the grocer said like-for-like sales excluding fuel were up 5.7% - with retail sales up 5.1% and wholesale up 0.6%.
Morrisons said that retail like-for-like sales were up 5% for the first six weeks of the year. Sales were flat in the first four weeks of financial 2021 with weeks five to seven being marked by "considerable stocking up" by customers, lifting sales.
"At this stage, the impact of Covid-19 remains uncertain. The outlook for our sales is also uncertain, although we are adapting well to the new day-to-day circumstances, while being both proactive and reactive in taking new opportunities. In addition, we are confident that we can satisfy any ongoing increased demand if the eat-at-home market continues to be temporarily larger than usual," Morrisons said.
As some of the worst-hit countries including Spain, Italy and France take heart from slowing death and infection rates, they are gradually allowing businesses to open up and try to get back to some semblance of normality.
However, after weeks of no new cases, Wuhan, the central Chinese city where the outbreak first emerged, reported six new infections in two days and South Korea announced its biggest spike in new cases for more than a month.
AxiCorp analyst Stephen Innes said: "Markets may eventually desensitize to mini-cluster outbreaks, provided death statistics remain static. Still, at this stage, it does not lessen fears of a significant secondary spreader, which will undoubtedly weigh on consumer sentiment and hurt the rebound.
"Unfortunately for global risk markets in general, this will be a reoccurring theme until effective vaccines are made available to the masses."
The pound was quoted at USD1.2337 early Tuesday, firm from USD1.2328 at the London equities close Monday.
The euro was quoted at USD1.0813, flat from USD1.0812. Against the yen, the dollar was trading at JPY107.40, lower than JPY107.66 late Monday.
The Japanese Nikkei 225 index closed up 0.1%. In China, the Shanghai Composite is down 0.5%, while the Hang Seng index in Hong Kong is down 1.6%.
Consumer inflation in China slowed in April, and Covid-19 continued to hurt producer prices, data from the National Bureau of Statistics showed.
In April, consumer prices rose 3.3% year on year, slowing from a 4.3% rise in March. Market consensus, according to FXStreet, had predicted a 3.7% consumer price inflation rate in April.
The producer price index - which reflects what factories charge wholesalers - fell 3.1% in April, accelerating from March's 1.5% slip and steeper than market consensus of a 2.6% drop.
Brent oil was quoted at USD29.81 a barrel Tuesday morning, flat from USD29.78 at the London equities close Monday. Gold was quoted at USD1,701.89 an ounce, firm against USD1,698.03.
The economic calendar has US inflation readings at 1330 BST.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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