Vodafone (LON:VOD) has climbed higher this Tuesday on the back of a wholesale deal, providing a bright spot on the benchmark FTSE 100 index which has retreated as UK investors returned from a three-day weekend to find that US President Donald Trump had signalled additional tariffs on Chinese goods. With the earnings season winding down, investors have fewer corporate releases to digest compared with last week, although tomorrow is shaping up to be interesting with updates due from a string of blue-chips including ITV (LON:ITV) and Imperial Brands (LON:IMB).
Tuesday’s notable FTSE 100 movers
Telecoms giant Vodafone is outperforming the UK market today after announcing that it had inked a wholesale agreement with Telefónica Deutschland. The move is part of the London-listed group’s efforts to secure the approval of the European Commission for its deal with Liberty Global which will see Vodafone acquire Liberty’s cable networks in Germany and eastern European markets.
The telco is also benefitting from analyst comments as Citi reiterated its ‘buy’ recommendation on the shares. Sharecast reported that the analysts had told clients that a cut to the telco’s dividend payout was not their base case. Vodafone’s share price is up by 0.9 percent in early afternoon trade, compared with about a one-percent drop in the FTSE 100.
AstraZeneca (LON:AZN) has been another prominent riser today as it posted positive results from a late-stage trial of its oncology treatment acalabrutinib, marketed as Calquence, in previously-treated patients with chronic lymphocytic leukaemia. The news marks a boost for the Anglo-Swedish drugmaker which has bet on oncology as one of its key therapy areas to propel growth. Shares in the company are changing hands about 0.9 percent higher.
Blue-chip insurer Hiscox (LON:HSX) is marginally outperforming the market, trading about 0.6 percent lower, as it reported that its gross written premiums had climbed by 3.3 percent in the first three months of its financial year.
China-exposed financials meanwhile are under the cosh, with investors mulling over the prospects of extra US tariffs on Beijing. Prudential (LON:PRU), is down by about three percent today, while Standard Chartered (LON:STAN) and HSBC Holdings (LON:HSBA) are worse off by about 2.8 percent and 2.3 percent, respectively. Luxury goods retailer Burberry (LON:BRBY), which also has significant exposure to China, has also lost more than two percent today.
“Rhetoric from the US side has shifted markedly in the last two days. Having seen progress and a good direction to productive discussions, relations have soured,” said Neil Wilson of Markets.com, as quoted by Proactive Investors. “Tweets from Donald Trump over the weekend saying he would raise tariffs on US$200bn in imports from China as early as Friday did the main damage to risk sentiment, sparking a sell-off in equities.”
UK share prices to watch on Wednesday
ITV is likely to take the centre stage tomorrow, with the broadcaster due to post its first-quarter results and hold its annual general meeting on the same day. Investors will be eyeing information on the company’s advertising revenue after ITV warned earlier this year that economic and political uncertainty continued to impact the demand for advertising, flagging a three-to-four percent fall in total advertising in the first four months of the year.
“Should advertising demand stay within that guidance it is unlikely to impact the share price too much, but its stock could suffer if its Q1 trading update is worse than expected,” Aaran Fronda, financial writer at IG, commented in a note last week.
Imperial Brands will also be among the UK share prices to watch tomorrow with its half-year results. Proactive Investors reports that UBS expect a ‘relatively weak’ reading, and see tobacco revenue declining marginally below the one-percent ‘normal’ level due to a one-percent headwind from a difficult comparison in the US.
“We expect a £140-million year-on-year headwind on operating profit due to £40 million of sale gains last year and an incremental £100 million investment in next generation products this year,” the broker elaborated, forecasting that Imperial Brands’ earnings per share will be down four percent year-on-year. The update will come after the tobacco group said in March that it was on track to deliver revenue growth at, or above, the upper end of its guidance range for the full year.
Direct Line (LON:DLG) will post a trading update tomorrow, ahead of its AGM on Thursday when the company’s chief executive Paul Geddes will step down, to be succeeded by chief financial officer Penny James. Proactive Investors reports that Numis expects a ‘modest’ decrease in premium income and flat policy numbers overall with small growth in motor offset by reductions in home and other.
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