Anglo's De Beers posts jump in revenue, GSK reports decent growth
London open
The FTSE 100 is expected to open six points higher on Wednesday, having closed up 0.44% on Tuesday at 7,666.31.
Stocks to watch
De Beers, the diamond division of mining giant Anglo American, has reported encouraging further signs of stabilisation in the diamond market after a big jump in revenues from its first sales tender of the new financial year. The company said it sold $370m of rough diamonds in the cycle one tender, down from $454m in the same cycle one tender last year but well ahead of the $137m sold in the last sales cycle of 2023. Al Cook, De Beers chief executive, said: "Solid consumer demand for diamonds in the United States over the year-end holiday season has certainly helped to stabilise the industry and we are seeing polished diamond prices increasing again."
GSK said on Wednesday that its 2023 performance showed decent growth, with total sales reaching £30.3bn - a 5% increase, or 14% excluding Covid-related factors. Vaccine sales surged by 25%, while specialty medicines saw a rebound of 15% excluding Covid. The FTSE 100 pharmaceuticals giant reported strong operating profit and earnings per share growth, driven by robust sales performance, higher royalty income, and increased investments in research and development and new product launches.
Professional IT services provider FDM Group said it expected annual revenues to be flat, confirming the warning it issued in November about the hit from geopolitical uncertainties and clients deferring project decisions. Revenue for calendar 2023 is expected to rise by 1% to £334m as client placements plunged by 21% and FDM was forced to axe a tenth of its internal workforce.
Newspaper round-up
Thousands of delicatessens and other specialist food shops have said new border rules that come in from Wednesday are likely to mean reduced choice of products for consumers. The Guild of Fine Food (GFF), which represents 12,000 businesses, has raised fears that European suppliers of specialist foods such as cheeses and meats will stop supplying the UK as a result of the additional red tape for imported goods. – Guardian
Sky is to cut about 1,000 jobs as customers move away from traditional satellite pay-TV to streaming-based services, in the latest round of redundancies to hit the UK media industry. The company, which employs about 26,000 staff in the UK, is seeking to reduce its workforce by about 4% this year. – Guardian
A US judge has ruled that billionaire Elon Musk’s $56bn (£44bn) Tesla pay package can be cancelled, calling the compensation “an unfathomable sum” that was not fair to shareholders, according to a court filing. The court’s opinion directed a Tesla shareholder who challenged the pay plan to work with Elon Musk’s legal team on an order implementing the judge’s decision. – Telegraph
HMRC has underestimated the true cost of government tax breaks by billions of pounds because it has been doing its sums wrong, the audit watchdog has claimed. Official forecasts massively underestimated the true cost of a range of tax reliefs because HMRC’s modelling did not account for the fact that the policies boosted growth, the National Audit Office (NAO) said in a report. – Telegraph
The world’s biggest coffee chain missed Wall Street estimates for quarterly sales in a sign that demand for its pricey coffees in the United States might be struggling, while its international markets also faced a slowdown. Shares in Starbucks, which opened its first outlet in 1971 in Seattle and has more than 32,000 stores in 80 countries, rose 4.2 per cent, or $3.95, to $98.03 in extended trading as its China business showed signs of recovery. – The Times
US close
US stock markets finished mixed on Tuesday as investors braced themselves for a deluge of corporate earnings from tech heavyweights, a central bank policy decision and some vital economic data.
The Dow rose 0.4% to set another record close of 38,467.31, while the S&P 500 pulled back 0.1% from Monday's all-time high and the Nasdaq dropped 0.8%.
Microsoft is first up, due to publish its figures after the closing bell, and will have a lot to prove following a 65% surge in the stock over the past 12 months.
Results from Alphabet were due out after markets closed, along with earnings from Advanced Micro Devices, Starbucks, Electronic Arts and Juniper Networks.
Then on Thursday, Apple, Amazon and Meta Platform will publish their results.