Tesco flags flat profits, Imperial Brands trading in line

London open

The FTSE 100 was set to open 12 points lower on Thursday, having closed up 0.5% at on Wednesday 7,824.84.

Stocks to watch

UK supermarket chain Tesco said it expected to post flat profits this year and announced a £750m share buyback as annual earnings fell last year after it absorbed the cost of inflation instead of passing it on to customers. The company, Britain’s biggest retailer, said group pre-tax profit halved to £1bn. Retail adjusted operating profit fell 6.3% to £2.49bn.

Tobacco company Imperial Brands said it was on track to deliver earnings in line with expectations and low single-digit constant currency net revenue growth. The company on Thursday said strong combustible pricing was offset by temporarily increased volume declines against a prior period which benefited from Covid-related changes in buying patterns.

Newspaper round-up

A legal challenge to the expansion of London’s ultra-low emission zone will be heard in the high court later this year, after a judgement permitted councils to proceed. The city’s mayor, Sadiq Khan, vowed to press on regardless with plans to extend the Ulez, which he has argued is needed to tackle toxic air that is responsible for thousands of premature deaths a year. – Guardian

The music industry is urging streaming platforms not to let artificial intelligence use copyrighted songs for training, in the latest of a run of arguments over intellectual property that threaten to derail the generative AI sector’s explosive growth. In a letter to streamers including Spotify and Apple Music, the record label Universal Music Group expressed fears that AI labs would scrape millions of tracks to use as training data for their models and copycat versions of pop stars. – Guardian

Matt Hancock is being investigated over claims that he put undue pressure on Parliament’s standards watchdog. The former health secretary was told he was being investigated over allegations that he broke the MPs’ code of conduct by “lobbying the commissioner in a manner calculated or intended to influence his consideration” of whether a separate breach had been committed. - Telegraph

Intel will work with Arm, the UK-based chip designer, to make sure mobile phone chips that use Arm technology can be made in Intel factories, the US company has announced. Intel was once the leading global manufacturer of the top-end microchips known as central processing units (CPUs), but in recent years the company has faced fierce competition from rivals such as Taiwan Semiconductor Manufacturing Company, which produces chips for Apple products. – The Times

A legal challenge to the financial watchdog’s launch of a redress scheme for former members of a British Steel pension scheme has been dropped. The British Steel Action Group claimed that recent rises in interest rates had created a fundamental change of circumstances since the scheme closed, and that further consultation was required. – The Times

US close

Stocks on Wall Street closed in the red on Wednesday, with all three major indexes ending lower, after the latest Federal Reserve meeting minutes raised concerns over the possibility of economic recession.

The Dow Jones Industrial Average slipped 0.11% to close at 33,646.50, while the S&P 500 dropped 0.41% to 4,091.95, and the Nasdaq Composite declined 0.85% to finish trading at 11,929.34.

In the currency market, the dollar was in the red against its major trading pairs, last sitting 0.03% lower on sterling at 80.09p.

It slipped 0.02% on the common currency to trade at 90.96 euro cents, and it weakened 0.01% against the yen to change hands at JPY 133.12.