London pre-open: Stocks to track Wall St higher after dovish Powell speech
London stocks were set to gain at the open on Thursday, taking their cue from big gains on Wall Street after Federal Reserve Chairman Jerome Powell struck a seemingly dovish tone in his latest speech.
The FTSE 100 was called to open 35 points higher at 7,039.
The Dow surged more than 600 points on Wednesday after Powell said US interest rates were just below neutral levels, leading US equity markets to their best session since March.
"Interest rates are still low by historical standards, and they remain just below the broad range of estimates of the level that would be neutral for the economy - that is, neither speeding up nor slowing down growth," Powell said in a speech at the Economic Club of New York.
"Investors interpreted the comments as a signal that rate rises will slow across the coming year and that the Fed could decide not to hike rates much further," said London Capital Group analyst Jasper Lawler.
"This is like Christmas come early for the markets! Investors had been growing increasingly nervous of the Fed hiking rates too quickly and stifling economic growth."
There was also some good news for UK banks as the Bank of England stress tests revealed that they are strong enough to survive a disorderly Brexit, the outcome of which the BoE said could leave the country worse off than in the 2008 financial crisis. None of the high street lenders were told to raise billions of pounds in capital to strengthen their finances.
On the data front net lending to individuals, consumer credit, mortgage approvals and money supply figures are all due at 0930 GMT.
In corporate news, Rio Tinto gave the green light for its $2.6bn (£2.03bn) Koodaideri iron ore mine in Western Australia.
Koodaideri will feature technology already in use across Rio Tinto, such as autonomous trucks, trains and drills, and implement systems connecting all components of the mining value chain for the first time.
Unilever chief executive Paul Polman will step down from the role at the end of next month and be replaced by the group's beauty & personal care boss, Alan Jope.
Polman, who has held the reins of the Anglo-Dutch giant for a decade, will support the transition process during the first half of the year.