Rolls-Royce says cargo driving demand, BT to extend full fibre network

London open

The FTSE 100 is expected to open 56 points lower on Thursday, having closed up 0.82% on Wednesday at 7,004.63.

Stocks to watch

Rolls-Royce engines flew at 40% of 2019 levels in the first four months of this year as the Covid-19 pandemic continued to impact the airline industry. The company, which is paid for the number of hours its engines fly, said it was largely driven by demand for cargo flights and the maintenance of key routes with and “broadly unchanged from the run rate at the end of 2020 and consistent with our planning assumptions”. “While the timing of the recovery remains uncertain, the progress of Covid-19 vaccination programmes in a significant number of countries, particularly the US and UK, is encouraging. Combined with increased testing, vaccination programmes are key enablers of further recovery in international air travel.”

UK telecoms operator BT said it was extending its full-fibre broadband network to 25m premises by the end of 2026, and would aim to fund the 5m extra premises through a joint venture. The company also reported a 7% fall in revenue and a 6% fall in adjusted earnings for the year to end-March, reflecting the impact of Covid-19.

Newspaper round-up

The head of the UK financial regulator has promised to consider imposing restrictions on a system that allowed the now collapsed bank Greensill Capital to operate in the UK without a licence. Nikhil Rathi, the chief executive of the Financial Conduct Authority (FCA), told MPs that Greensill’s failure had led the regulator to look “much more closely at the systems of control that the principle has in place and potentially also plac[e] some restrictions on the scale of business that can be undertaken through this mechanism”. - Guardian

Guidance that people in England should work from home if they can is to be dropped from 21 June, the prime minister has indicated. Boris Johnson told MPs on Wednesday the government intended to take the step when it moved to the final stage in its Covid reopening plans. “That is certainly our intention, provided we stay on track,” he told the Commons when asked about the proposal by the Tory MP Felicity Buchan. - Guardian

Driving could become the preserve of the rich as Britain and other countries around the world impose bans on diesel and petrol cars and embrace electrification, the boss of Vauxhall owner Stellantis has warned. A global rush to go electric could make cars too expensive for the middle classes, said Carlos Tavares, chief executive of the world's fifth-biggest car maker - and it may even fail to significantly reduce carbon emissions because the vehicles are so much heavier than petrol ones. - Telegraph

Bitcoin fell sharply last night after Tesla announced it would no longer accept the world’s largest cryptocurrency as payment for its vehicles. The electric carmaker, one of the digital asset’s largest corporate champions, cited alarm over its “rapidly increasing” consumption of fossil fuels. Elon Musk, chief executive, argued Bitcoin’s future “cannot come at great cost to the environment.” - The Times

A loophole that allowed rogue directors to escape scrutiny by dissolving their companies is to be closed, the government has said. The Insolvency Service will be given powers to investigate directors of companies that have been quietly struck from the corporate register amid concerns over fraudulent evasion of liabilities linked to emergency Covid-19 loans. - The Times

US close

Wall Street stocks finished in negative territory for yet another session on Wednesday, following the release of April's consumer price index.

At the close, the Dow Jones Industrial Average was down 1.99% at 33,587.66, as the S&P 500 lost 2.14% to 4,063.04, and the Nasdaq Composite was 2.67% weaker at 13,031.68.

The Dow closed 681.5 points lower on Wednesday, extending losses recorded in the previous session despite big-name tech stocks staging a late reversal.

In focus on Wednesday was April's consumer price index, which rose 4.2% year-on-year, according to the Labor Department, ahead of estimates for a print of 3.6% and the fastest pace of acceleration since September 2008.

The monthly gain was 0.8%, well ahead of the 0.2% advance expected on the Street.