London pre-open: Stocks seen down ahead of Autumn Statement

(Sharecast News) - London stocks were set to fall at the open on Thursday following losses in the US and Asia, as investors eye Chancellor Jeremy Hunt's Autumn Statement. The FTSE 100 was called to open 18 points lower at 7,333.

CMC Markets analyst Michael Hewson said: "As we look ahead to today's European open the main focus will be on Westminster and Chancellor of the Exchequer Jeremy Hunt as he delivers the long-anticipated Autumn Statement.

"Over the past few weeks, we've heard an array of estimates of the size of the fiscal black hole at the heart of the public finances, ranging from £40bn to £55bn, however this week we got a new one in the form of a higher number, this latest one being £70bn, begging the question as to how big the fiscal hole is.

"While we know a good proportion of this is due to higher borrowing costs due to high inflation, as well as the potential for a slowdown in the UK economy, it seems odd that the size of the hole has gone up at the same time UK gilt yields have gone down, along with natural gas prices.

"Yesterday the UK 10-year gilt yield fell to its lowest level since 16th September, likewise with 2-year gilt yields, to a level when the term black hole referred to objects in outer space.

"This would suggest that, as Bank of England governor Andrew Bailey admitted yesterday, that most of the risk premium from the events in September has come out, which means there is little if any need for a punishing budget. If he is correct in that assessment, it would suggest that the Chancellor probably has more wriggle room when it comes to laying out a long-term plan to address the challenges facing the UK economy."

In corporate news, Halma posted a surge in first-half revenues following the acquisition of three companies, despite which the company's net debt position remained low.

The safety equipment manufacturer said that sales jumped 19% over the six months ending on 30 September versus a year earlier, to reach £875.5m. Adjusted earnings were up 11% to £171.7m or 35.65p per share, with strong growth reported in all sectors and regions - including in organic and constant currency terms.

Royal Mail owner International Distribution Systems swung to a half-year loss, blaming weak parcel volumes and strikes at the UK postal carrier.

Pre-tax losses came in at £127m, compared with a profit of £315m a year earlier. The company also said it would stop talks with the Communication Workers Union if it went ahead with further strike action.