AB Foods reinstates dividend, Avast reports solid Q1 growth

London open

The FTSE 100 is expected to open six points lower on Tuesday, having closed down 0.28% on Monday at 7,000.08.

Stocks to watch

Primark owner Associated British Foods reinstated its dividend as it reported a fall in interim profits, reflecting the closure of stores in the latest round of Covid lockdowns. The clothing-to-foods conglomerate reported an 8% fall in half year pre-tax profits to £275m. On an adjusted basis, pre-tax profits were down 50% to £319m as revenues declined 17% to £6.3bn. An interim dividend of 6.2 pence a share was declared, totalling £49m.

Rio Tinto reported a 7% improvement in Pilbara iron ore shipments year-on-year to 77.8 million tonnes for the first quarter on Tuesday, with production down 2% to 76.4 million tonnes. The FTSE 100 mining giant said bauxite production slipped 2% to 13.6 million tonnes, while aluminium production grew 3% to 0.8 million tonnes. Mined copper production of 120,500 tonnes was 9% lower than in 2020, while titanium dioxide slag production was 5% lower year-on-year at 279,000 tonnes and production of pellets and concentrate at the Iron Ore Company of Canada (IOC) was 8% lower than in 2020.

Cybersecurity software company Avast said first quarter revenue rose 10.4% to $237.1m on an organic basis, with its Consumer Direct business continuing to deliver good growth, while the SMB business also sustained positive momentum. The FTSE 100 company said adjusted EBITDA was 10.3% higher for the period at $133.7m, resulting in an adjusted EBITDA margin of 56.4%.

Newspaper round-up

Ministers have ordered a formal investigation into the proposed $40 billion takeover of Arm by America’s Nvidia, citing concerns the deal could diminish Britain’s national security. Oliver Dowden, the culture secretary, has told the competition watchdog to begin a “phase one” investigation of the acquisition of the microchip designer, which is considered the most successful technology to have emerged from the UK in recent decades. - The Times

The French government has increased its stake in Air France-KLM to more than three times that of the Netherlands, strengthening its grip on the struggling airline. A share issue by the struggling airline more than doubled the French government’s holding to 28.6pc, according to a statement on Monday, followed by China Eastern Airlines which increased its stake from 8.8pc to 9.6pc to become the second biggest shareholder. - Telegraph

A stimulus programme focused on green and digital infrastructure, research and development, energy and care work could create more than 1.2m jobs within two years and more than 2.7m jobs during the next decade, according to research. Such a strategy alongside additional government investment could mean every job lost to the coronavirus pandemic would be replaced during vital upcoming recovery years, a report by Green New Deal UK non-profit group has found. - Guardian

Households are a step closer to paying for goods and services with digital pounds and pence after the Treasury and the Bank of England announced a task force to weigh up the idea. A central bank digital currency, or CBDC - dubbed Britcoin by Rishi Sunak - would give consumers and businesses a new way of making and receiving payments and would sit with physical cash and bank deposits. While possibly underpinned by the blockchain technology used by cryptocurrencies such as bitcoin and ethereum, the CBDC would be pegged to the pound and therefore much less volatile. - The Times

Jeff Fairburn, the former boss of Persimmon, has teamed up with an American hedge fund to buy one of the UK’s largest residential property developers. Yorkshire-based private property developer Berkeley DeVeer, headed by Mr Fairburn since early 2020, has partnered with funds advised by New York’s Elliott Advisors to take over Avant Homes Group. - Telegraph

US close

Wall Street stocks closed lower on Monday as traders took profits in bank stocks and digested more earnings from big-name US firms.

At the close, the Dow Jones Industrial Average was down 0.36%% at 34,077.63, while the S&P 500 was 0.53% weaker at 4,163.26 and the Nasdaq Composite saw out the session 0.98% softer at 13,914.77.

The Dow closed 123.04 points lower on Monday, cutting into gains recorded in the previous session that saw the index close at a fresh record high.

Corporate earnings were again in focus on Monday, with a slew of major blue-chip firms slated to report throughout the week.

Coca-Cola shares were in the green after posting better-than-expected quarterly earnings and revenues and stating that demand had returned to pre-pandemic levels in March, while banks stocks like Bank of America, Wells Fargo and Citigroup were under pressure Monday as market participants continued to take profits after some solid earnings from the nation's largest lenders last week.