London pre-open: Stocks seen up on positive Asian, US cues

London stocks were set to rise at the open on Thursday following positive US and Asian sessions, as investors set aside their concerns about higher rates, with an avalanche of earnings to wade through.

The FTSE 100 was called to open 29 points higher at 6,688.

CMC Markets analyst Michael Hewson said: "After a negative start US markets underwent a turnaround in fortune with the Dow leading the way powered by the likes of energy and financials, while tech lagged behind.

"Various Fed officials continued to play down the threat of higher rates, with both vice chair Richard Clarida, and permanent Fed governor Lael Brainard weighing in as well, while Powell said that higher rates were a natural consequence of an economic recovery story. While that is certainly true, there is no escaping the fact that after years of low or negative real rates, there is the possibility that real rates might be about to move quite a bit higher.

"While that may be manageable for some, there are others that might find the prospect of that a little more concerning, particularly in Europe, where debt levels in some parts are eye-wateringly high, and likely to get higher.

"After last night’s record close for the Dow and subsequent rebound in the S&P500 and Nasdaq, markets here in Europe look set to open higher encouraged by the prospects of a continued reopening, and central banks that are in no hurry to pare back their stimulus attempts, as Asia markets reversed yesterday’s declines."

In corporate news, Standard Chartered said annual profits more than halved on bad loan impairments due to the coronavirus pandemic, as it resumed dividend payments and announced a share buyback.

The Asia-focused bank said pre-tax profits fell 57% to $1.61bn, below the $1.85bn average of bank-compiled analyst forecasts. Credit impairments more than doubled to $2.3bn.

StanChart declared a 9 cents-per-share dividend and said it would return a further $254m to shareholders via a buyback, the total payout being the maximum permitted under temporary limits set out by the Bank of England last year to protect bank balance sheets.

Building materials distributor and DIY retailer Grafton reported a decline in full-year profit and revenue after its branches were forced to close due to the pandemic.

In the year to the end of December 2020, adjusted pre-tax profit fell 7.4% to £166.4m on revenue of £2.51bn, down 6.1% on the previous year.