London pre-open: Prepare for weak start

28th Apr 2010 07:36

Further losses are predicted for Wednesday as investors continue to fret about the state of the eurozone economy, although an avalanche of results may prove a distraction.London fell 2.6% on Tuesday after Standard & Poor's decided to cut its credit rating on Greece to junk status and lowering its view on Portugal by two notches.City experts think the market will open around 22 points lower this morning following a slump of more than 200 points on Wall Street overnight.It'll be interesting to see the response to numbers from Royal Dutch Shell. Higher oil prices helped the company post a sharp rise in earnings in the first quarter of 2010. Profit jumped to $4.9m on a current cost of supplies (CCS) basis from $3.3bn last year. There was a strong improvement in upstream profit to $4.4bn, although downstream earnings fell to $743m from $1bn.British American Tobacco did well in the first quarter despite weaker volumes, helped by last year's acquisition of Indonesia's Bentoel and currency moves. The world's second largest tobacco company said revenue for the three months grew in constant currency terms across all regions, but volumes dropped to 168 billion from 170 billion in 2009.Sales rose but underlying profits fell last year at Home Retail as weak consumer spending and higher product costs put pressure on margins at Argos, though Homebase staged a recovery. Sales rose 2% to £6.02bn in the year to February, but discounts and promotions took their toll on underlying profits, down to £293m from £328m. Pre-tax profit of £293m compared with last year's one-off hit loss of £394m.Rolls-Royce remains on track for the full-year after trading in line with expectations since the start of 2010, although business is still challenging and the volcanic eruptions in Iceland haven't helped. Chief executive John Rose still thinks the aircraft engine maker can double revenue over the next decade.Speciality chemicals supplier Croda reported better than expected first quarter results as robust trading continued and is confident of significant progress for the remainder of the year. The group, which supplies ingredients for sun-block to companies such as Procter & Gamble, said group sales increased 14.7% to £264.7m despite adverse currency translation of 4.1%, with overall volumes increasing 26.0%. Pre-tax profit from continuing operations almost doubled to £42.4m from £21.7m in 2009.