London pre-open: Stocks seen up as EU agrees rescue package
London stocks were set to rise at the open on Tuesday after EU leaders finally agreed on a Covid-19 rescue package.
The FTSE 100 was called to open 37 points higher at 6,298.
Berenberg analyst Holger Schmieding said it was "a big step forward for Europe".
"After four days of intense negotiations, EU leaders agreed on a €1.8trn package. With a €750bn post-pandemic recovery fund and a €1.074trn seven-year budget framework for 2021-2027, they resolved two key challenges facing the EU.
"They did so even earlier than we had expected, with a slightly smaller proportion of the funds paid as grants. Of the €750bn recovery fund, €390bn will be paid as grants, €360bn as loans."
On home shores, investors will be mulling the latest figures from the Office for National Statistics, which showed that the UK government borrowed £35.5bn in June amid the coronavirus pandemic. This is around five times more than June last year and took total government debt to a record £1.98trn. Still, this was lower than May’s £45.5bn and below consensus expectations of £38bn.
In corporate news, BHP Group reported a 7% rise in fourth-quarter iron ore output, but warned the resurgence of coronavirus outbreaks threatened the short-term demand outlook for its main commodities.
The Australia-based mining giant met guidance for iron ore production of a record 67m tonnes for the quarter, up 4%, and 248m tonnes for the financial year, driven by strong Chinese demand.
Alternative asset manager Intermediate Capital Group posted a 1.0% quarter-on-quarter increase in assets under management to €45.6bn during the second quarter, as portfolio valuations recovered amid good or positive signals for future activity.
The firm, which specialises in private debt, credit and equity said that realisation activity had resumed at pre-Covid 19 valuations and that it had clinched €2.4bn of deals in exclusivity, terming the latter a "good indicator of investment pace and future fundraising pipeline".
Fundraising momentum was also said to have continued, with the company having raised €1.2bn of new money in the first quarter "with good visibility for the coming months".