Tesco lifts full-year guidance, Sirius Real Estate trades in line

London open

The FTSE 100 is expected to open 45 points lower on Wednesday, having closed up 0.94% on Tuesday at 7,077.10.

Stocks to watch

UK supermarket chain Tesco lifted full year earnings guidance after strong first-half sales helped interim profits to more than double against a backdrop of labour shortages and cost pressures. Group sales including fuel grew 5.9% to £30.4bn in the 26 weeks to August 28 as pre-tax profit increased 107% to £1.1bn and adjusted operating profit rose by 40% to £1.45bn. Core retail sales were up 16.3% to £1.38bn. Tesco said it expected adjusted retail operating profit to be between £2.5bn and £2.6bn.

Sirius Real Estate said it was trading in line with expectations on Wednesday, flagging a 2.5% increase in like-for-like annualised rent roll to €98.9m for the six months ended 30 September. The FTSE 250 company said that was driven by a 2.6% increase in like-for-like rate per square metre to €6.33. Its total annualised rent roll, meanwhile, improved to €99.7m.

Newspaper round-up

Nearly two-thirds of UK manufacturers expect to raise their prices in the run-up to Christmas after being hit by mounting cost pressures, a leading employers’ group has said. The British Chambers of Commerce said inflation expectations had risen to their highest since its records began at the end of the 1980s, with 62% of industrial firms planning price hikes over the next three months. - Guardian

Petrol prices could reach all-time highs before Christmas, the RAC warned, signalling “misery” for motorists still reeling from the fuel shortage crisis. Amid signs that the number of petrol forecourts running dry was easing, the drivers’ organisation warned that anxiety about whether motorists could fill up their tanks was likely to be replaced by concern about how much it would cost. - Guardian

Vladimir Putin has blamed the shift to renewable energy for causing "hysteria and confusion" in European markets as gas prices surged to new record highs. The Russian president claimed that the power crisis gripping the West is being driven by an "unbalanced" and "drastic" move away from fossil fuels, amid efforts by the Kremlin to downplay suggestions that it has sent prices surging by restricting the supply of gas. - Telegraph

Amazon has opened a new bricks and mortar concept store selling electronics, books, toys and kitchenware in a fresh assault on physical rivals such as John Lewis and Curry's. Called 4-star, the shop stocks about 2,000 of the company's highest-rated and most popular products and is located in Bluewater, a shopping centre just outside of London. - Telegraph

Google’s London-based artificial intelligence lab has moved into the black for the first time after the Silicon Valley giant used more of its discoveries in its commercial products. DeepMind’s maiden annual profit draws a line under many years of heavy losses and suggests that its parent is starting to generate significant revenue from its intellectual property. - The Times

US close

Wall Street stocks closed higher on Tuesday following heavy losses in the previous session.

At the close, the Dow Jones Industrial Average was up 0.92% at 34,314.67, while the S&P 500 was 1.05% firmer at 4,345.72 and the Nasdaq Composite saw out the session 1.25% stronger at 14,433.83.

The Dow closed 311.75 points higher on Tuesday, almost reversing losses recorded on Monday as investors rotated out of tech stocks amid rising bond yields.

Investors seemed to be buying the dip on Tuesday, as tech stocks traded higher despite the yield on the benchmark 10-year Treasury note trading higher at 1.534%.

Market participants were also focussed on Washington, with lawmakers still trying to agree on whether or not they should raise or suspend the US borrowing limit in order to avert a dangerous first-ever default on national debt. The Treasury Department cautioned lawmakers last week that they needed to address the debt ceiling before 18 October, when officials estimate that the US will have exhausted emergency efforts to honour bond payments.