London pre-open: Stocks to bounce back from heavy losses; Barclays in focus
London stocks looked set to rise at the open on Wednesday, bouncing back from heavy losses in the previous session and after stocks on Wall Street ended off their lows.
The FTSE 100 was called to open 60 points higher at 7,015.
CMC Markets analyst David Madden said: "European equity markets endured a severe sell-off yesterday as global investment sentiment continues to be weak. There are several factors playing into the mix. The political stand-off between Rome and Brussels continues as the EU commission have rejected the budget proposal from the Italian government. The administration in Rome will have to resubmit its proposals, but Prime Minister Conte has already made it clear there is no ‘plan B’.
"Dealers are bracing themselves for the prospect of higher yields on Italian government bonds, and that could keep pressure on the Italian banking sector."
In addition, he noted that trade tensions between the US and China persist, adding to the bearish sentiment.
"A Chinese official announced that Beijing are not looking for a trade war, but they do not fear one, and this suggests the country is prepared to dig its heels in over this trade dispute. Yesterday, Caterpillar confirmed that manufacturing costs jumped on the back of the higher steel and aluminium prices due to tariffs, and this underlines how the poor relationship between the US and China is hurting their business."
On the data front, BBA mortgage approvals for September are at 0930 BST.
In UK corporate news, Barclays' third-quarter profit fell 9.5% to £3.1bn due to continued payments of litigation and conduct charges in the US and PPI in the UK, though the bank's underlying performance was much improved.
Excluding charges of £2.1bn, profit before tax increased 23% to £5.3bn as income was fairly flat in UK retail banking and corporate and investment banking, but credit impairment charges improved 53% and operating costs by 3%.
Antofagasta narrowed full year copper production guidance to 705-725,000 tonnes, with production in 2019 to increase to 750-790,000 tonnes, driven by higher average grades at Centinela Concentrates and Zaldívar.
Third quarter copper production increased 15% quarter-on-quarter to 188,300 tonnes. Production volumes will continue to grow, with the fourth quarter expected to be particularly strong, the company said.
Fresnillo issued its third quarter production numbers, with silver production rising 6.3% year-on-year to 15.5 moz including Silverstream, thanks to the contribution of the new Pyrites Plant, higher ore grades at Fresnillo, Herradura and Ciénega, and higher volumes of ore milled at San Julián phase II.
The company said gold production fell ⅖% to 225 koz, which was put down to higher than normal speed in the recovery rate at the leaching pads in the third quarter last year, and the lower grade and volume of ore deposited on the pads at Herradura this year.