London pre-open: Stocks seen up after Wall Street gains

(Sharecast News) - London stocks were set to rise at the open on Friday following strong gains on Wall Street. The FTSE 100 was called to open 70 points higher at 6,920.

CMC Markets analyst Michael Hewson said: "As a result of yesterday's sharp turnaround in the US we can expect to see European markets open sharply higher as we come to the end of what has been a turbulent week.

"UK markets also saw some big moves yesterday with UK gilt yields retreating sharply, and the pound surging on reports that the government will execute further U-turns when it comes to its recent mini-budget measures. While Number 10 Downing Street has denied such a U-turn will happen, markets seem to think that the Chancellor won't have a choice, and his early departure from the IMF meetings in Washington appears to suggest that something is afoot.

"There is also an expectation that whatever the Bank of England and Governor Bailey says about ending the support for the gilt market today, if we get further turbulence next week, they will have little choice but to step in and provide liquidity to the market."

Hewson added that while Thursday's rebound was a welcome respite after the weakness seen in markets this week, there's no reason to think that it was anything more than a technical rebound off some key support levels.

In corporate news, asset manager Ashmore said that total assets under management had fallen 12.5% in the three months ended 30 September as a result of $5.0bn in net outflows and a $3.0bn negative investment performance.

Ashmore said total assets under management dropped from $64.0bn at the end of June to $56.0bn in the third quarter, with the increase in net outflows predominantly stemming from institutional investors reducing exposure in the external debt, local currency and blended debt themes.

Royal Mail said it was looking to cut 10,000 jobs by the end of August 2023 as it warned of financial losses due to industrial action and lower parcel volumes.

Parent company, the newly renamed International Distribution Services, said the job loss figure could include up to 6,000 redundancies. For the current fiscal year, Royal Mail forecast an adjusted operating loss of around £350m, including the direct, immediate impact of eight days of industrial action which have taken place or been notified to Royal Mail, but excluding any charges for voluntary redundancy costs.

"This may increase to around a £450m loss if customers move volume away for longer periods following the initial disruption," it added.