London pre-open: Stocks seen muted after vaccine-fuelled rally

London stocks were set for a muted open on Wednesday as investors pause for breath after strong gains on the back of Covid-19 vaccine optimism.

The FTSE 100 was called to open just four points higher at 6,300.

CMC Markets analyst Michael Hewson said: "This week’s news on a vaccine, while welcome doesn’t change the fact that France, Germany and the UK are still in the middle of partial economic lockdowns, while infection rates in the US have continued to rise, however for now markets appear content to ignore this and are now focussing on the potential green pastures of a post pandemic world, with a workable vaccine. Whether this is premature, only time will tell but for now investors appear content to ride this particular wave until it breaks.

"Today’s start for markets in Europe is likely to be a subdued one given a mixed session in Asia, and that it is a Remembrance Day holiday in the US and Canada, and France also has an Armistice day public holiday."

In corporate news, defence aerospace group BAE Systems said underlying earnings would be slightly higher than forecast as order intake levels moved ahead of original pre-Covid planning.

The Wednesday said its large order backlog and incumbent programme positions “are expected to lead to strong and profitable top line growth with increasing cash conversion in the coming years”.

“The recent German parliament announcement confirming the approval of the purchase of an additional 38 Typhoon aircraft is significant for the consortium, and we are working with Eurofighter and our industrial partners to conclude the relevant contracts in the near future,” BAE said in a trading statement.