Halma flags lower profits, PZ Cussons expecting tougher trading

London open

The FTSE 100 is expected to open 49 points higher on Wednesday, having closed up 0.43% at 5,829.46 on Tuesday.

Stocks to watch

Hazard detection company Halma said it expected 2021 adjusted pre-tax profits to be up to 10% lower and more weighted to the second half. The company said there had been a “significant variation” in demand in its individual end-markets and geographic regions as it grappled with the Covid-19 pandemic. “The USA and mainland Europe regions have delivered the most resilient overall trading performances. The UK and Asia Pacific have remained more challenging, although the latter has benefited from prior year acquisitions and a gradual recovery in China,” Halma said on Tuesday.

PZ Cussons said it had a good start to the current financial year but that it expected tougher trading with the UK and other markets in recession. The maker of Imperial Leather soap updated on trading for the three months to the end of August as it reported a 33% drop in annual profit. Pretax profit from continuing operations fell to £29.3m from £43.6m in the year to the end of May as revenue declined 2.6% to £587.2m

HgCapital Trust announced the sale of UK specialist insurance intermediary A-Plan Group to international insurance broking group Howden on Wednesday. The company said the terms of the transaction were not being disclosed, with the acquisition remaining subject to regulatory approval.

Newspaper round-up

The chancellor, Rishi Sunak, is weighing up plans to replace the furlough scheme with German-style wage subsidies as part of a wider emergency support package to help businesses through a second wave of Covid-19. Sources from business and industry told the Guardian that the Treasury has been consulting on options for the end of the furlough scheme as concerns mount over increasing numbers of job losses, and as rising infections and tougher restrictions risk derailing Britain’s economic fightback from the pandemic. - Guardian

Facebook has warned that it may pull out of Europe if the Irish data protection commissioner enforces a ban on sharing data with the US, after a landmark ruling by the European court of justice found in July that there were insufficient safeguards against snooping by US intelligence agencies. In a court filing in Dublin, Facebook’s associate general counsel wrote that enforcing the ban would leave the company unable to operate. - Guardian

Tesla has promised a $25,000 electric car in the next three years as it halves the cost of its batteries. Chief executive Elon Musk unveiled a plan to make electric cars accessible to the masses, conceding that the company does not yet have "a truly affordable car". - Telegraph

Wahaca’s lenders have agreed to write off millions of pounds of debt to keep the Mexican restaurant chain afloat. Wahaca, co-founded by Masterchef winner Thomasina Miers, has launched a company voluntary arrangement that will see its shareholders and lenders give the business a £5m cash injection to help return it to an even keel, Sky News first reported.- Telegraph

The American private equity firm Apollo Global Management has emerged as the frontrunner to take control of Asda but worries about a legal battle involving the supermarket chain remain an obstacle to a £6.5 billion deal. It emerged yesterday that Lone Star, another private equity group, had pulled out of the race to acquire a majority stake in the chain from Walmart, the American retail giant, after its bid failed to meet the seller’s price expectations. - The Times

US close

Wall Street closed higher on Tuesday after testimony from Federal Reserve Chairman Jerome Powell earlier in the day.

At the close, the Dow Jones Industrial Average was up 0.52% at 27,288.18, while the S&P 500 was 1.05% firmer at 3,315.57 and the Nasdaq Composite saw out the session 1.71% stronger at 10,963.64.

The Dow closed 140.48 points higher on Tuesday, putting an end to a four-day losing streak as Chinese trade relations, a potential second wave of the Covid-19 pandemic and stimulus negotiations were all in focus.

Tuesday's main focus was Powell's testimony before the House of Representatives Financial Services Committee.

Powell told the House that the Fed stands ready to use all of the tools at its disposal to assist the recovery of the economy and limit the lasting damage from the Covid-19 pandemic's effect on the nation.