London pre-open: Stocks to rise after positive US session
London stocks were set to rise at the open on Tuesday following a positive close on Wall Street.
The FTSE 100 was called to open 41 points higher at 6,374.
CMC Markets analyst David Madden said: "The S&P 500 finished higher last night as the optimism surrounding the coronavirus drug story aided sentiment. It was reported that President-elect, Joe Biden, wants to appoint former Fed chair Janet Yellen to the role of Treasury Secretary. Yellen’s leadership at the Fed greatly helped the US economy continue its recovery from the banking crisis. Yellen oversaw the raising of interest rates in the post credit-crisis era and it was carried out in a measured and well signalled manner so dealers would welcome that style of doing business.
"Broadly speaking, stock markets in Asia are higher as the positive momentum from the US has spilled over to the Far East. The Nikkei 225 played catch-up as it was closed yesterday for a holiday. European markets are called higher."
In corporate news, contract catering giant Compass forecast a 2.5% underlying operating margin in the first quarter of 2021 as it reported a heavy fall in profits due to the closure of half its business during the coronavirus pandemic.
The company said pre-tax profits plunged 86% to £210m as revenues fell 19.8% to £20bn. Compass, which supplies food to a wide range of sectors including health and education, had returned to profitability in the fourth quarter and was now cash neutral.
"Although the prospects of a vaccine are encouraging, the resumption of lockdowns in some of our major markets shows that we have to continue to take proactive actions to control the controllable and ensure the business can thrive despite the ongoing pandemic," the company said.
Phoenix Group Holdings confirmed press speculation regarding the possible sale of its European businesses.
The life insurer said that it had received expressions of interest from several third parties for its European unit. However, while management was now in the process of assessing a range of strategic options to maximise shareholder value, there was no certainty that a transaction would be achieved.