London pre-open: FTSE 100 called lower despite US rally
London stocks are expected to edge lower in early trade on Friday, after a mixed session in Asia but a positive day for Wall Street.
The FTSE 100 was being called around 15 points lower, having finished at 7,545.44 the day before. Sterling remained soft against the dollar at 1.3076 and little moved against the euro at 1.1239.
Overnight, US stocks had ended a multi-session losing streak, helped by some robust economic data. This was a "relief rally" as the Federal Reserve’s actions kick in, said Jasper Lawler, market analyst at London Capital Group, as the markets adjust to the new higher interest rate economy, with solid durable goods data and treasury yields falling from recent highs.
"Whilst US markets closed off their highs, Asian markets powered upwards overnight, supported by a lift in oil," Lawler added, with oil concerns heightened over a tightening in the physical market from Iran’s supply loss and declining Venezuelan output. "Oil will remain in focus across the European session as it is on track for its third weekly gain."
Brent crude pushed oil to $82.44 a barrel overnight but was back below $82 by the start of the European session.
There is inflation and GDP releases in Europe and the US due later.
Among London corporates, budget airline easyJet said it expected to deliver full year pre-tax profit of between £570m - £580 million, in the upper half of previous guidance and despite the impact of strike action and weather-related air traffic restrictions across Europe. Passenger numbers for the full year excluding Tegel airport in Germany are expected to increase by 5.4% to around 84.6m, driven by an expected increase in capacity of 4.2% to 90.3m seats which was lower than originally planned due to the level of external disruption.
RSA Insurance reported a “strong” third quarter in its international businesses, but poor UK underwriting results, driving a disappointing overall third quarter in a trading update on Friday. The FTSE 100 company said net written premiums for the third quarter discrete were up 4% year-on-year. Large and weather losses were above expected levels in the quarter overall, but were “particularly elevated” in the UK.
United Utilities said current trading is in line with the group's expectations for first half of its financial year, with revenue higher than a year ago but statutory profits to be hit by an extra investment to cope with the hot and dry weather over the summer. The water company said over the full year it expected to pour £80m into measures to "safeguard continuity of supplies to customers and protect our water resources" and avoid water restrictions.
Millennium & Copthorne Hotels chief executive Jennifer Fox has agreed to step down with immediate effect, having only started in June. Fox is a 30-year veteran of the industry, having joined after a long spell with Sheraton and after senior executive roles in Australia, Hong Kong, the UK and Europe, the US, Canada and the Middle East.