London pre-open: Stocks seen up on positive US cues

(Sharecast News) - London stocks were set to rise at the open on Tuesday following a positive close on Wall Street, as traders return to their desks after the long weekend. The FTSE 100 was called to open 44 points higher at 7,280. Markets were closed on Monday for the funeral of Queen Elizabeth II.

CMC Markets analyst Michael Hewson said: "US markets also got off to a cautious start yesterday, coming off their worst week since June, they retested their 2-month lows of last week without breaking below them, before closing higher on the day.

"Yesterday's late rebound in the US looks set to translate into a positive start for European markets later this morning, however whether that can hold is likely to depend on the events of the next few days.

"The last few days has seen the market narrative start to shift quite markedly from optimism over some form of Fed pivot, to increasing concern over a hard landing for the global, as well as the US economy.

"Stock markets have for now proved relatively resilient to these concerns, despite rising bond yields. Yesterday the US 10-year yield took out its previous peak of earlier this year, while the 2-year yield edged ever closer to the 4% level, and their highest levels since 2007.

"This week's central bank meetings are likely to be pivotal in the context of what comes next, starting with the Federal Reserve meeting which starts today, and concludes tomorrow, as well as the latest meetings from the Bank of Japan, Bank of England, and the Swiss National Bank."

In corporate news, B&Q owner Kingfisher reported a fall in first-half profits against a tough comparator last year when DIY boomed during pandemic lockdowns, adding that it now faces a "more uncertain macroeconomic environment".

The company said pre-tax profits for the six months to July 31 fell by a third to £474m, while like-for-like sales were down 4.1% to £6.8bn. Kingfisher said it now expected full-year adjusted pre-tax profit of £730m - £770m.

Consumer healthcare company Haleon saw operating profits grow more than 20% in the six months ended 30 June, driven by increased revenues and margins.

Haleon said that interim revenues had risen 13.4% to £5.18bn, led by an 11.6% uptick in organic revenues, leading to a 22.1% increase in reported operating profits to £900.0m. Adjusted operating margins improved 150 basis points at reported rates to 23.0%.