London pre-open: Stocks seen lower as peace hopes fade, ahead of ECB

(Sharecast News) - London stocks were set to fall at the open on Thursday as hopes of a peace deal between the US and Iran faded and as investors awaited the latest policy announcement from the European Central Bank. The FTSE 100 was called to open down around 35 points.

Summing up events in the Middle East, Danske Bank said: "Iran's Revolutionary Guard declared the Strait of Hormuz closed and threatened to target any vessel attempting to transit, reporting that two ships were fired upon, although US Central Command said commercial traffic 'was continuing to transit in and out of the Strait'.

"While the US launched new strikes on Iranian military assets inside Iran, Iran claimed drone and missile attacks on multiple US bases in Kuwait, Bahrain and Jordan."

The ECB is widely expected to lift rates by 25 basis points when it makes its announcement at 1315 BST.

TD Securities said it expects the Bank to hike amid persistently high energy prices and likely upward revisions to inflation projections.

"If a hike materialises, the risk will be in messaging of whether it's appropriate to maintain flexibility and stick to a data-dependent approach or acknowledge the forward-looking risks to inflation and a need for additional hikes, as a result," it said.

In corporate news, safety equipment and life-saving tech specialist Halma posted a jump in full-year earnings despite an uncertain economic backdrop.

The blue chip saw revenues rise 15% to £2.58bn, or by 16% on an organic basis, in the year to 31 March, while earnings before interest and tax rose 22% to £594.5m. It was the first time earnings have come in above £500m.

Halma said demand had been broad-based across its three sectors, with premium growth in its photonics business, despite an "uncertain" economic and geopolitical environment.

Low cost airline Wizz Air said it had suspended guidance due to the impact of the Iran war which had led to "a lack of visibility across our trading seasons".

Despite the cancellation of routes to the Middle East and Cyprus as the conflict started in February Wizz Air reported a rise in EBITDA for the year to March to €1.32bn from €1.13bn a year earlier.