London pre-open: Stocks to jump after Wall Street rally; services data eyed
London stocks were set for a firm open on Thursday, tracking gains on Wall Street as investors eye the latest reading on the UK services sector.
The FTSE 100 was called to open 100 points higher at 7,134.
David Madden, market analyst at CMC Markets, said: "The US markets had a roller-coaster ride yesterday, and after being well offside, all the major indices managed to finish higher on the day. The Dow Jones was down over 500 points at one point, and managed to close up over 200 points - which sums up how much of a turn around the US market underwent yesterday. It was reported that President Trump might be a little flexible on one of the North American Free Trade Agreements points, and that boosted the sentiment.
"Stocks that were in the firing line for the new round of tariffs from China still finished in the red, but off the lows of the day. Beijing has targeted the aerospace and the agricultural sectors, amongst others, and stocks like Boeing and Deere clawed back most of the ground they lost. Now that China have levelled the playing field in terms of tariffs, the markets will be cautious about a potential retaliation from President Trump - he still feels there is a major trading imbalance between the two counties. "
On the data front, Markit's services purchasing managers' index for March at 0930 BST is expected to have slipped to 53.9 from 54.5.
"There is talk the Bank of England will hike interest rates next month, and the services sector needs to be strong if the hawks what to pull the trigger," Madden said.
Market participants will also eye the release of US initial jobless claims at 1330 BST ahead of Friday's non-farm payrolls report. Consensus is for an increase to 225,000 from 215,000.
In corporate news, Hammerson reported modest growth in the value of its portfolio of shopping centres in the first quarter of the year, but said it was waiting for French suitor Klépierre to make its position clear later this month before proceeding with its own takeover of UK rival Intu.
In spite of the difficulties endured by much of the UK retail and restaurant sectors, the FTSE 100 group said there remained good demand for its premium centres, with leasing increasing thanks to strong lettings in the UK.
Moody's has downgraded its rating on Barclays after the bank split its retail and investment banking activities under rules to make banks safer.
The ratings agency cut Barclays Plc's long-term issuer and senior unsecured debt ratings to Baa3, or one step above junk, from Baa2.
Moody's also reduced its rating on the deposits and senior unsecured debt of Royal Bank of Scotland Plc and Royal Bank of Scotland NV to Baa2 from A2 and A3.
Smurfit Kappa is installing a new industrial-scale HP PageWide C500 digital press for corrugated printing, which will provide greater customisation and flexibility for customers, it announced on Thursday. The FTSE 100 packaging giant said the HP PageWide C500 Press, which would be the first commercial HP single pass press in Europe, was HP’s most technologically advanced digital press for corrugated application. It said the press will be installed in Smurfit Kappa’s Interwell plant in Austria.