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

(Sharecast News) - London stocks were set to rise at the open on Friday following an upbeat session on Wall Street. The FTSE 100 was called to open 33 points higher at 7,940.

CMC Markets analyst Michael Hewson said: "It's been a difficult week for European and US stock markets with the prevailing theme being one of weakness, although as far as markets in Europe are concerned, they are a little overdue a pullback after such a strong start to the year.

"Yesterday saw markets in Europe, as well as the US finish the day higher after the Fed minutes gave a broad indication that any Fed pause would likely occur at around 5.4%, tempering the recent rise in bond yields.

"The rally in US markets yesterday looks set to see European markets open higher this morning."

Investors will be eyeing a key inflation reading in the US, with personal consumption expenditure figures for January due at 1330 GMT.

On home shores, meanwhile, the latest survey from GfK showed that consumer confidence rebounded from historic lows in February.

GfK's long-running consumer confidence index rose seven points to -38, with all five confidence measures up. Analysts had been expecting a reading of -43.

Joe Staton, client strategy director at GfK, said: "Despite widely reported headwinds of inflation continuing to outstrip wage rises, and the ongoing household challenge from the cost-of-living crisis, consumers have suddenly shown more optimism about the state of their personal finances and the general economic situation, especially for the coming year.

"While it's too early to talk about 'green shoots of recovery', the uptick across all measures should be welcomed. But what's happening? Are people simply fed up with hearing bad news? Do they see a milder recession than the pundits predicted? Do they sense the most worrying phase of the energy crisis is over? The headline consumer confidence score is still severely depressed and the mood as well as the economy remain a long way off pre-lockdown levels, but a little consumer resilience might be what we need to soften any downturn in 2023.

"However, many challenges remain and this may be nothing more than a bubble of hope - and bubbles always burst."

In corporate news, British Airways owner IAG swung to a full year profit as international travel recovered from the Covid pandemic and said it had agreed to buy out the 80% of Air Europa it does not own for €400m in a move to turn Madrid into a major airport hub.

The group, which also owns Iberia and Aer Lingus, reported an operating profit of €1.25bn in 2022 as Covid travel restrictions were lifted, compared with a loss of €2.7bn a year earlier.

"Further recovery in profits expected in 2023, with full year operating profit before exceptional items expected to be in the range of €1.8-2.3bn, based on current foreign exchange rates and jet fuel forward prices. However, we are mindful of uncertainty in the macro environment and fuel and non-fuel cost inflation," the company said.