London pre-open: Stocks to follow Wall St higher; earnings in focus
London stocks were set for a firmer open on Tuesday, taking their cue from a positive session on Wall Street, as investors eye the first congressional testimony from new Federal Reserve Chair Jerome Powell.
The FTSE 100 was called to open 28 points higher at 7,318.
CMC Markets analyst Michael Hewson said: "Today’s focus is likely to be on Washington DC later today as new Fed chair Jerome Powell sits in front of US lawmakers in his first semi-annual congressional testimony. If markets want to make a judgement on whether we can expect to see four rate rises this year then the tone of Powell’s remarks could go some way to supporting that premise.
"With other Fed policymakers making increasingly optimistic noises about the US economy, Randal Quarles, the vice chairman of financial supervision on the Fed board being the latest in comments last night, Powell is going to find it increasingly difficult to dial back expectations, especially given the recent tax changes which are likely to filter through in the coming months.
"I suspect that while he won’t want to box himself into a corner, he is unlikely to want to paint a different picture to the rather hawkish interpretation of the minutes of last months Fed meeting which suggested that US policymakers are increasingly optimistic about the glide path of the US economy."
There are no major UK data releases due.
In corporate news, Meggitt saw full-year free cash flows jump 42% to £186m, alongside a 34% increase in statutory profits to £262.4m. In underlying terms, the engineer reported a 2% rise in underlying profits before tax to £357.9m as sales edged ahead by the same measure to £2.03bn.
The company's earnings per share followed a somewhat similar pattern, surging by 105% to 45.2p per share in statutory terms but with the underlying measure edging ahead by just 1% to 35.3p a share. In parallel, its net debt position declined by 18% to £964.8m while the company's full-year payout was increased 5% to 15.85p.
Speciality chemical company Croda International reported a record full-year profit as sales grew thanks to a strong performance across sectors and regions.
In the year to the end of December 2017, adjusted pre-tax profit was up 11.1% to a record £320.3m on sales of £1.4bn, up 10.4% on 2016 and driven by an ongoing focus on premium, faster growth niches in personal care, life sciences and performance technologies, together with positive currency translation as 95% of the company’s sales are outside the UK.
Direct Line announced bumper dividend payments as the insurance company posted a more than 50% increase in annual operating profit. The FTSE 100 general insurer proposed a final dividend of 13.6p a share, up from 9.7p a year earlier. The payment pushed the payout for the year to the end of December to 20.4p from 14.6p. Direct Line also announced a special dividend of 15p taking total dividends for the year to 35.4p a share from 24.6p in 2016.
Annual operating profit from continuing operations rose 51.4% to £610.9m as gross written premiums increased 3.6% to £3.4bn. The results also reflected a change to the personal injury discount rate which reduced profit in 2016.
Provident Financial's Vanquis Bank has been hit with a sizeable fine by the financial regulator over failings associated with its Repayment Option Plan product and ordered the non-standard lender to pay a whopping £168.8m in compensation to customers.
The FCA fined Vanquis £1.976m and ordered Vanquis to pay back the interest customers were charged on ROP from 1 April 2014 to when customers were informed of the full cost of the product.