SSE operating profit falls, RSA agrees to £7.2bn buyout

London open

The FTSE 100 is expected to open 29 points lower on Wednesday, having closed down 0.87% on Tuesday at 6,365.33.

Stocks to watch

Energy supplier SSE reported a fall in adjusted operating profit after taking a £115m hit from the coronavirus pandemic, but also maintained its interim dividend payout. The company on Wednesday said adjusted operating profit fell 15% £418.3m. The dividend was held at 24.4p a share and SSE said it planned to recommend an annual payout of 80p a share plus RPI inflation.

RSA Insurance has agreed to be bought for £7.2bn by a consortium comprising Intact Corp of Canada and Denmark’s Tryg. The consortium will pay 685p in cash for each of RSA’s shares.

Speciality chemical company Croda International has agreed to acquire fragrances and flavours company Iberchem, it announced on Wednesday. The FTSE 100 company said total consideration for the acquisition would be €820m (£736m) on a debt-free, cash-free basis. Iit said Iberchem has been majority-owned by Eurazeo since 2017.

Newspaper round-up

Failure to strike a post-Brexit trade deal would cut the UK’s economic growth rate by more than half next year, delaying a full recovery from the coronavirus pandemic, according to a report. The accountancy firm KPMG said the economy would suffer heavily should the UK fail to secure a trade deal with the EU before the end of Brexit. - Guardian

The UK music industry is set to halve in size this year as issues including an effective shutdown of concerts, gigs and festivals strip £3bn from its contribution to the economy. UK Music, the umbrella organisation representing the commercial music industry from artists and record labels to the live music sector, has revealed that the industry grew by 11% last year to be worth £5.8bn to the UK economy. - Guardian

Amazon is urging shoppers to buy their presents early as even the most advanced online retailers battle against supply chain chaos in the run-up to Christmas. The e-commerce giant has hired an extra 250,000 workers this year to staff its global network of warehouses - along with 100,000 temporary Christmas employees. - Guardian

Business leaders have warned the government that livelihoods are at risk because they are in the dark about what Covid-19 restrictions will be in place when England’s lockdown ends on December 2. Bosses told MPs yesterday that they needed clarity over the rules they would have to adhere to in the crucial Christmas trading period so that they could make plans for their staff, sites and suppliers. - Telegraph

It is perhaps no surprise that the word Covid appears 215 times in Airbnb’s 349-page float prospectus. The document, published on Monday night, shows just how bad it became for the home-sharing service in the worst months of the pandemic. This January, guests made a net 33.3 million bookings on Airbnb for rooms and “experiences” such as city tours, cookery classes and stand-up comedy workshops. In March, they made a net 4.1 million cancellations. Like the rest of the travel industry, Airbnb was in crisis. - Telegraph

US close

Wall Street stocks closed lower on Tuesday after seeing out the previous session at a record high.

At the close, the Dow Jones Industrial Average was down 0.56% at 29,783.35, while the S&P 500 was 0.48% weaker at 3,609.53 and the Nasdaq Composite saw out the session 0.21% softer at 11,899.34.

The Dow Jones closed 167.09 points higher on lower on Tuesday, cutting into losses recorded in the prior session after drugmaker Moderna gave the blue-chip index another shot in the arm when it revealed that its Covid-19 vaccine candidate was more than 94% effective, further raising expectations of a sharp economic recovery.

Positive headlines on the vaccine front couldn't come at a better time for markets, with more than 1.0m cases being confirmed across the US in less than a week, raising the country's total number of recorded cases to more than 11.0m, according to Johns Hopkins University.

However, despite the good news, the World Health Organization said that although the announcements of new potential effective vaccines for Covid-19 were positive, "many questions" around them remained.