Next lifts profit guidance, Intertek buys Brazil's JLA

London open

The FTSE 100 is expected to open 32 points higher on Wednesday, having closed up 0.54% at 6,881.12 on Tuesday.

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UK fashion retailer Next on Wednesday lifted full-year profits guidance after a sales rebound in the second quarter. In an unscheduled trading update, the company said it now expected annual pre-tax profits of £750m, up £30m from previous forecasts and towards the top end of estimates. Total full-price sales rose 18% in the three months to July 17 after the lifting of Covid restrictions and people returned to physical stores. Next added that it was also repaying £29m in business rates relief after consultation with major shareholders.

Intertek has acquired JLA Brasil, it announced on Wednesday, which provides food, agri and environmental testing in Brazil. It said the acquisition of JLA represented a “compelling opportunity” to enter the fast-growing food testing sector in Brazil, which is one of the largest markets globally in terms of agri-food and beverage production value.

Royal Mail said first quarter revenues rose 12.5% in the first quarter as people continued to shop online with Covid lockdown restrictions still in place, although UK parcel volumes had started to slip as curbs were lifted. Parcel volumes at the firm’s UK business were down 13% year on year in the three months to June 30, but were up 19% on the pre-pandemic 2019 quarter. “We are starting to see evidence that the domestic parcel market is rebasing to a higher level than pre-pandemic, as consumers continue to shop online,” Royal Mail said on Wednesday ahead of its annual shareholder meeting

Newspaper round-up

Rishi Sunak is poised to usher in cuts to public services of up to £17bn compared with the government’s pre-pandemic plans unless he takes action this summer to increase funding, a leading think tank has warned. The Institute for Fiscal Studies said the government was on track to spend between £14bn and £17bn less each year on a range of public services from April 2022 than had been earmarked prior to Covid-19. - Guardian

Theatre unions and trade bodies claim the UK government has “let down a vital industry” by failing to back a Covid-19 insurance scheme to help their beleaguered sector. Since England’s venues reopened on 17 May, theatre workers who have Covid or receive a test and trace app “ping” have gone into self-isolation, with their colleagues required to follow suit even if they test negative. This has led to an increasingly widespread cancellation of performances, and in some cases entire productions, resulting in significant losses of box-office income. Andrew Lloyd Webber’s new musical Cinderella and a revival of Hairspray at the London Coliseum are among the shows that have had to halt performances this month. Hairspray reopens on Tuesday night after cancelling 17 shows from 4-18 July. - Guardian

Ministers have cut off taxpayer-funded payments to Britain’s biggest microchip factory after its sale to a Chinese-owned technology company. UK Research and Investment (UKRI) has suspended grants to Newport Wafer Fab under Government instructions after its sale to Nexperia, The Telegraph understands. - Telegraph

Apple is to delay plans to call office staff back to their desks this autumn amid rising concerns over a new wave of coronavirus cases. The American technology group, which employs about 147,000 full-time workers, is said to be postponing a mandated part-time return to offices by at least another month.- The Times

The government’s new Steel Council will meet tomorrow to consider an industrial policy — a “steel deal” — to determine whether troubled businesses like Liberty Steel should be saved. Kwasi Kwarteng, the business secretary, has admitted having doubts about whether a private sector refinancing of the company will be successful. - The Times

US close

Wall Street stocks finished firmer on Tuesday, as major indices crawled back some of the heavy losses recorded in the previous session.

At the close, the Dow Jones Industrial Average was up 1.62% at 34,511.99, while the S&P 500 added 1.52% to 4,323.06, and the Nasdaq Composite was 1.57% firmer at 14,498.88.

The Dow closed 549.95 points higher on Tuesday, more than halving losses recorded in the previous session, its worst performance in eight months, as concerns regarding the spread of the Covid-19 delta variant saw market participants offload equities en masse.

Rising coronavirus cases were in focus again on Tuesday, with the ‘Delta’ variant spreading primarily among the unvaccinated, and the US now averaging about 26,000 daily cases over the last seven days - more than double the average number seen in mid-June.

Also in focus, the yield on the benchmark 10-year Treasury note was still hovering around a five-month low at roughly 1.18%.