Barratt makes strong start to year, Next upgrades profit guidance

London open

The FTSE 100 is expected to open six points higher on Thursday, having closed up 1.68% on Wednesday at 7,039.30.

Stocks to watch

House builder Barratt said it expects full year results to be “modestly above” prior expectations after a strong start to the new year and was refunding £3.5m in Covid business rate relief. The company on Thursday forecast 2021 wholly owned completions to be between 16,000 and 16,250 homes and to deliver around 650 joint venture completions.

Next upgraded its guidance for annual pretax profit by £20m to £720m after sales beat expectations in the first quarter. Full-price sales fell 1.5% in the 13 weeks to 1 May from two years earlier - exceeding the fashion retailer's previous central guidance for a 10% reduction. Next said the post-lockdown sales surge was likely to be short-lived and left its sales guidance for the rest of the year unchanged at +3% from two years earlier.

Melrose Industries is trading “modestly” ahead of expectations, it said in an update on Thursday. The FTSE 100 company said that for the group, the momentum from the second half of 2020 had continued into 2021, with sales to the end of April 8% higher year-on-year. Excluding Nortek Air Management, group sales grew by 4%.

Newspaper round-up

The government has been urged to publish details of up to £2bn in Covid-19 contracts awarded to private healthcare companies, including some that have helped fund the Conservative party. Contracts to provide extra capacity during the pandemic have been handed to 17 firms since March 2020. - Guardian

Indivior faces the threat of a shareholder revolt over the drugmaker’s decision to maintain bonus payments for its British former chief executive, who was jailed last year in a case related to the US opioid crisis. Shaun Thaxter, 53, was sentenced to six months in federal prison in the US state of Virginia last October and agreed to pay $600,000 (£432,000) in fines and forfeiture, after pleading guilty in June to federal charges related to Indivior’s Suboxone Film, used to help reduce withdrawal symptoms in recovering opioid addicts. He is due to be released on 10 May. - Guardian

KPMG has told its 16,000 UK staff that they can knock off early one day a week over summer as the firm embraces flexible working in the wake of Covid. The Big Four consultant is giving employees two and a half hours off each week until the end of August to support their wellbeing and allow them to "re-energise" after working on intense and stressful projects during the pandemic. - Telegraph

Ministers are exploring the creation of a national stockpile of so-called rare earth metals amid rising fears that Britain's efforts to adopt electric cars are at risk from a Chinese stranglehold on supplies. It is understood that officials at the Department for Business are discussing options to protect the UK's access to vital materials including lithium and cobalt, which are essential for batteries and part of a global commodity prices boom as expectations rise for massive demand. - Telegraph

The chairman of GlaxoSmithKline has sought to ease the pressure on its chief executive by throwing his weight behind her in the face of investor unease about her strategy. Sir Jonathan Symonds used the pharmaceutical giant’s annual shareholder meeting yesterday to give a public show of support for Dame Emma Walmsley, who has faced questions about her overhaul of the company. He praised her “bold and courageous” leadership of the business and signalled that he expected the chief executive to stay in place for years to come. - The Times

US close

Wall Street finished in a mixed state on Wednesday, with more corporate earnings and comments from Treasury Secretary Janet Yellen in focus.

At the close, the Dow Jones Industrial Average was up 0.29% at 34,230.34, while the S&P 500 eked out gains of 0.07% to 4,167.59, and the Nasdaq Composite slipped 0.37% to 13,582.42.

The Dow closed 97.31 points higher on Wednesday, reversing gains recorded yesterday in what was an otherwise losing session for major indices.

Comments from Treasury Secretary Janet Yellen that an interest rate hike was neither something she was "predicting or recommending" were lending some support to stocks after a previous statement that "it may be that interest rates have to rise somewhat" in order to stop the US' post-covid economy from overheating had panicked investors.

On the macro front, weekly mortgage applications fell 0.9% in the seven days ended 30 April, according to the Mortgage Bankers' Association, as the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances moved ever so slightly higher to 3.18% from 3.17%.