Rio Tinto issues China reopening warning, Inchcape takes stake in CATS

London open

The FTSE 100 is expected to open seven points lower on Tuesday, having closed up 0.2% at 7,860.07 on Monday.

Stocks to watch

Mining giant Rio Tinto said China's dismantling of Covid-19 restrictions raised risks of labour and supply-chain shortages as it reported a 4% increase in iron ore shipments in the fourth quarter. The coming months would bring “high volatility”, Rio said as China faced a surge in coronavirus cases, which would increase short-term risks of supply chain disruptions and labour shortages across the country.

Inchcape said it was taking a controlling stake in the CATS Group of the Philippines and forming a joint venture with the distributor of luxury vehicles. The deal will expand Inchcape's global distribution footprint as it enters the Philippines, the company said on Tuesday and strengthen its reach and partnerships with Mercedes-Benz, Chrysler, Dodge, Jeep, Jaguar and Land Rover.

Global drinks giant Diageo said it was buying Don Papa Rum of the Philippines for €260m up front. Diageo added that it could pay out an extra €177.5m to 2028 subject to performance, "reflecting the brand's current growth potential".

Newspaper round-up

Jeremy Hunt is facing calls for a “social energy tariff” providing cheaper gas and electricity for low income households to be introduced when government support ends next year. In an open letter to the chancellor, 95 charities and non-profit organisations have urged the government to move quickly to legislate for a change in energy bills for “those in greatest need to ensure they are able to live in their homes comfortably”. – Guardian

Britain risks losing vital investment if it keeps raising taxes and undermining its reputation as a stable place to do business, global bosses have warned. PwC’s annual poll of more than 4,000 chief executives showed the UK climbed one place this year to become the third most important country globally for growth, alongside Germany. – Telegraph

Sadiq Khan has been accused of manipulating a public consultation on expanding London’s Ultra-low emission zone (Ulez) after it emerged that more than 5,000 votes were excluded. Emails reveal the Mayor’s officials removed thousands of votes submitted to a consultation on whether to expand Ulez across the whole of London. The crackdown on motorists is costing drivers in the capital an additional £385,000 a day in charges, according to RAC. – Telegraph

The boss of Aveva has reiterated that the FTSE 100 technology company will remain autonomous as its controversial £10 billion takeover by France’s Schneider Electric was formally sealed. Peter Herweck, chief executive of Aveva, said that the company would continue to work with a variety of partners and control systems. “It is a clear agreement that we have done. We’ve been very, very clear about it. We will be agnostic,” he said. – The Times

The global airline industry will be back at prepandemic levels by the middle of this year. That is the bullish assessment of Avolon, one of the world’s largest aircraft leasing companies. The forecast is the most optimistic estimate yet for a recovery in the industry from the Covid-19 travel restrictions of 2020 to 2022. – The Times

US close

Wall Street remained closed on Monday for the Martin Luther King, Jr. Day holiday.