London pre-open: Stocks seen up on vaccine rollout, US stimulus optimism

London stocks were set to rise at the open on Monday as investors took heart from falling coronavirus cases in the UK and a speedy vaccine rollout, and amid optimism over US stimulus.

The FTSE 100 was called to open 49 points higher at 6,538.

Hussein Sayed, chief market strategist at FXTM, said: "Appetite for risk is not showing any signs of ebbing away. Asian stocks hovered near record highs in early Monday trade, with European and S&P 500 futures advancing further following a new record close for US indices on Friday.

"US 10-year Treasury yields also hit a post-pandemic high of 1.19%, while Brent Crude reached a new milestone of $60 per barrel.

"Slowing coronavirus infections, continued rollout of vaccines, and anticipation of President Biden’s $1.9 trillion rescue package is keeping the bull market well and truly alive."

In corporate news, UK energy producer Drax said it was buying Canadian firm Pinnacle Renewable Energy for 11.30 Canadian dollars a share, valuing it at £226m.

Drax said the offer price for Toronto-listed Pinnacle also implied an enterprise value of CAN$741m, including CAN$356m of debt.

Electrocomponents predicted annual profit in line with expectations as stronger growth offset higher operating costs at the electronic products company.

The company registered 8% like-for-like revenue growth in the four months to the end of January with business increasing across its business. Revenue had shrunk 4% in the three months to September and 11% in the quarter before that.

Trading was held back by higher freight, labour and business continuity costs linked to Brexit. Consensus for the year to the end of March is for adjusted pre-tax profit of £175m.