Morrisons maintains full-year guidance, 888 wins race for William Hill international business

London open

The FTSE 100 is expected to open 63 points lower on Thursday, having closed down 0.75% at 7,095.53 on Wednesday.

Stocks to watch

Gambling company 888 Holdings on Thursday said it had won the race to buy the non-US international business of William Hill from Caesars Entertainment for £2.2bn. The combination is expected to deliver “significant operating efficiencies”, including pre-tax cost synergies of at least £100m a year, leading to improved profit margins, 888 said in a statement. It won an auction with Apollo and CVC Capital Partners working with Tipico, a German betting group. Advent International recently withdrew from the race and the CVC-led bid was knocked out over the weekend.

Morrisons stuck to its full-year guidance as the supermarket chain reported a 37% drop in first-half profit before exceptional items. Pretax profit before tax and exceptionals fell to £105m from £167m in the six months to the end of August from a year earlier as revenue excluding fuel increased 3.7% to £9.05bn. Statutory pre tax profit fell 43.4% to £82m. Morrisons said profit was reduced by £41m of costs directly linked to Covid-19, and £80m of lost profit in cafes, fuel and food-to-go during lockdowns early in the half.

Newspaper round-up

Boeing’s board of directors must face a lawsuit from the planemaker’s shareholders over two fatal crashes of its 737 Max aircraft, which killed 346 people in less than six months, a US judge has ruled. Delaware judge vice-chancellor Morgan Zurn found that the company had ignored “red flags” about the safety of the new aircraft and its anti-stall system, which the board “should have heeded but instead ignored”, following the crash of Lion Air flight 610 in October 2018. - Guardian

Shares in the embattled Chinese property giant Evergrande have slumped again after two credit downgrades in two days amid concerns that it will default on parts of its massive $300bn debt pile. Evergrande, which is one of the world’s most indebted companies, has seen its shares tumble 75% this year. They fell by almost 10% on Thursday morning to HK$3.35, which is below the listing price when the company floated on the Hong Kong market in 2009. - Guardian

Britain was forced to ask France to send less electricity across the Channel after technical problems with a trading platform in Europe threatened a risky surge of power. Officials issued a request for “emergency assistance” from France on the morning of Sunday August 29 to cap flows to Britain through giant cables under the sea. - Telegraph

Shoppers have long pined for the return of the good old days at Marks & Spencer, so the reintroduction of its St Michael label might fan hopes that a revival is around the corner. M&S scrapped the logo from products ranging from socks to sausages in 2000 in an effort to resuscitate its fortunes. Now, after a 21-year absence, a preview of the chain’s latest ranges has revealed that the St Michael’s brand has reappeared. - The Times

KPMG’s decision to set foot on the delicate territory of class is brave. The accounting firm has set itself a target for 29 per cent of its senior people to be from a working-class background by 2030. It thinks that this is a first for any large UK employer. At present 20 percent of its partners and 23 per cent of its directors are deemed to be working class, while only 14 percent of the executive committee are sufficiently proletarian. Class, once toe-curlingly taboo, is now firmly on the agenda at the Big Four firm. - The Times

US close

Stocks closed in the red on Wall Street on Wednesday, after a top Federal Reserve official made the case for a prompt withdrawal of the central bank's emergency bond purchases.

The Dow Jones Industrial Average closed down 0.2% at 35,031.07, the S&P 500 slipped 0.13% to 4,514.07, and the Nasdaq Composite was 0.57% weaker at 15,286.64.

In an interview with the Financial Times earlier, the president of the Federal Reserve Bank of St. Louis, James Bullard, dismissed concerns about a slowdown in hiring and said the Fed would start tapering those bond purchases before the end of 2021.

He also favoured ending tapering by the end of March 2022 to give the Fed "optionality" to raise interest rates and because of the "incipient housing bubble".

On a related note, Andrew Garthwaite, Credit Suisse's chief equity strategist, reiterated his "small underweight", but with a small overweight for tech, on US equities.