London pre-open: Stocks seen lower on weak US cues

London stocks are expected to open lower on Thursday, taking their cue from the US, where equities failed to hold on to their gains.

London’s FTSE 100 is seen starting 47 points lower than Wednesday’s close at 5,625.

“While US stocks initially tried to rally they slipped back into the close, alongside a decline in oil prices, and this is likely to translate into a slightly weaker European open this morning, particularly since Asia markets failed to gain any traction at all, though the Hang Seng was merely playing catch up after its Chinese New Year break,” said Michael Hewson, chief market analyst at CMC Markets.

“In a day fairly light of data the main focus is likely to be back on the banks to see whether they can sustain yesterday’s rebound, as well as oil prices with US prices back flirting near their lows of last month. Brent prices on the other hand appear to be holding up a little better as speculation swirls about an agreement on production cuts, which while remaining unlikely, appear to be helping to support the price at the margins, along with a slightly weaker US dollar.”

There are no major UK data releases due, so eyes will be on US initial jobless claims at 1330 GMT.

Glencore agrees gold and silver streaming deal with $500m upfront

Glencore has agreed a $500m gold and silver streaming deal from its Antapaccay mine in Peru to help ease its balance sheet woe.

As part of its debt reduction plans the FTSE 100 group expects to receive the $500m advance payment via its wholly owned Narila subsidiary before the end of the month in return for delivering 630,000 oz of gold, 10m oz of silver.

Imperial Brands has posted a 10% jump in tobacco revenue for the first quarter, and said it is on track to meet full year expectations.

In a trading update for the three months to 31 December, the FTSE 100 company which was previously named Imperial Tobacco, said net tobacco revenue had risen from £1.49b to £1.63bn, supported by ITG Brands in the USA.

However total tobacco volumes had dropped 3%, due to the company deprioritising low quality volume in certain markets.

Rio Tinto was insistent it was weathering the commodities storm in its full-year results on Thursday, but the numbers were telling a different story, with net earnings down almost £5bn and into loss territory.

In the year to 31 December 2015, the FTSE 100 company reported consolidated sales revenues of $34.8bn (£23.9bn), which was down $12.8bn on the prior year. Rio Tinto blamed the drop on a $13.bn reduction from the sharp decline in commodity prices.

Its EBITDA margin was 34%, compared with 39% in 2014. Underlying earnings totalled $4.5bn, which was down $4.8bn on a year before.