London pre-open: Stocks seen up despite Fitch credit outlook downgrade
London stocks were set for a positive open on Thursday following losses in the previous session and despite Fitch downgrading the UK’s credit rating outlook.
The FTSE 100 was called to open 50 points higher at 7,103.
Late on Wednesday, Fitch downgraded the credit outlook to "negative" from "stable". It said: "The large and unfunded fiscal package announced as part of the new government's growth plan could lead to a significant increase in fiscal deficits over the medium term."
The ratings agency maintained its AA- credit rating for the UK.
In corporate news, spirits maker Diageo got off to a good start in its 2023 fiscal year, reporting organic net sales growth across all regions ahead of its annual general meeting.
Nevertheless, the company anticipated the operating environment would remain "challenging" and volatile due to the geopolitical uncertainty, weaker consumer spend, price pressures and the disruptions from Covid-19.
Even so, Diageo boss, Ivan Menezes, expressed confidence in the business's resilience and management's ability to cope. He also believed that Diageo was still well-positioned to reach organic net sales growth "consistently" in the range of 5-7.0% across FY2023-25 and organic operating profit growth of 6-9.0%.
Tobacco company Imperial Brands unveiled a £1bn share buyback as it said current year trading was in line with expectations.
"In line with previous guidance, we expect full-year net revenue and group adjusted operating profit to both grow by around 1% at constant currency," the company said in a trading update.
Elsewhere, safety technology maker Halma said it had bought German testing technology firm WEETECH Holding for €57.5m (£50m), on a cash-and debt-free basis.
Founded in 1973 and headquartered in Wertheim, Germany, WEETECH designs and makes safety-critical electrical testing technology, to test the integrity of both high and low voltage electrical systems.