Next lifts profit guidance, Babcock signs £115m five-year deal
London's FTSE 100 was expected to open unchanged at 7,648.
Stocks to watch
Next has nudged up its full year profit target thanks to a better online sales performance in the run up to Christmas, and said it expects increased sales but lower profits in the coming year.
Full price sales in the 54 days to Sunday 24 December were 1.5% higher than those last year, much better November's guidance for a decline of 0.3% and the 1.3% in the third quarter.
Babcock International has signed a five-year agreement worth about £115m to maintain frigates for the Australian navy.
The FTSE 100 engineer said Naval Ship Management (NSM), its joint venture with Australia's UGL, would provide critical engineering services for eight Anzac class frigates. The work comprises planning, scheduling, management and execution of preventive and corrective maintenance on Australia's east and west coasts.
FTSE 250 residential landlord Grainger has exchanged contracts with Abode Hallam Limited and agreed to forward fund and acquire a private rented sector (PRS), build to rent development, Eccy Village, in Sheffield, for around £32m.
The investment is expected to generate a gross yield on cost of more than 7% once stabilised, with completion due by the end of next year.
News round-up
Ryanair has applied for a British air operating licence to ensure its domestic UK routes can keep flying after Brexit. The Irish airline has repeatedly warned that flights could be grounded after March 2019 unless a new framework for aviation is agreed between Britain and the EU. – Guardian
House prices in “prime” central London appear to be stabilising, while areas in the south and west of the capital such as Wandsworth and Richmond are now under increasing pressure, according to estate agent Savills. The company is predicting that average property values in central London’s top-end enclaves such as Knightsbridge, Mayfair and Holland Park will record no growth for the next two years following three years of decline. – Guardian
WANdisco, the Sheffield-based software company, has secured its biggest deal to date, capping a turnaround year in which its share price has trebled. The company will announce on Wednesday morning that it has won a $4.3m (£3.2m) contract with “one of the world’s leading financial institutions”. – Telegraph
City staff who spent the Christmas period racing to prepare for a major piece of EU legislation that goes live on Tuesday have been warned that meeting deadline does not mean the work is over. Staff at firms including TP ICAP were barred from taking holiday during the festive period so that they could prepare for the sweeping markets reform, known as Mifid II, by the January 3 deadline. – Telegraph
US close
Wall Street got off on the front foot as trading floors opened for 2018 with stock indices led higher by oil and tech as the dollar and Treasuries suffered a new year hangover.
The S&P 500 added 22.2 points or 0.8% to reach a record closing high of 2,695.81, while the Dow Jones Industrial Average gained 104.79 points or 0.42% to 24,824.01 by Tuesday's closing bell and the Nasdaq Composite regained the 7,000 mark with a rise of 103.5 points or 1.5%. Earlier, European stocks finished lower but Asian markets enjoyed a strong session.