London pre-open: Stocks to slide amid rising bond yields

London stocks were set to slide at the open on Friday following downbeat sessions in the US and Asia, amid concerns about rising bond yields.

The FTSE 100 was called to open 85 points lower at 6,567.

CMC Markets analyst Michael Hewson said: "This week has been characterised by the question as to whether higher rates are good or bad for stock markets. If last night’s price action in the US is any guide then the answer to that would be a no, with the sharp declines in the US set to result in a negative start for markets here in Europe, after Asia markets slid sharply as well.

"For most of this week equity markets have tried to move higher, and tried to move lower and succeeded in not doing much at all until last night in the US, which saw the Nasdaq post its biggest one day fall since October, while US 10-year yields hit a peak above 1.6%, before pulling back to just below 1.5%.

"This sharp push higher appears to be starting to blow the froth off some of the more richly valued parts of the market, thus begging the question as to whether investors will move this cash into the weaker parts, which have this week been starting to show signs of life."

In corporate news, British Airways owner IAG swung to a massive €7.4bn annual operating loss and pulled guidance for 2021, reflecting the impact of the Covid-19 crisis.

The loss compares with a profit of €2.61m a year ago.