London pre-open: Stocks to start the day little changed, US dollar in the headlines

(Sharecast News) - Stocks in London were set for a slightly higher start on Monday with investors' attention on weakness in the US dollar. It was against that backdrop that analysts in the City were mulling the outlook for financial markets on either side of the Pond.

"While there may be some logic in the argument that we may have seen the peaks in US markets, given how they have performed in the last few months, there is less of an argument when you look at markets in Europe, which look set to open higher later this morning," said Michael Hewson, chief market analyst at CMC Markets UK.

"Valuations in Europe are lower to begin with, and on an income/dividend basis much more compelling, compared to the US, with the FTSE100 and DAX both trading on forward dividend yields of 3.77% and 3.36% respectively."

As at 0744 GMT, futures on the FTSE 100 were trading up by two points at 7,753.50 while Sterling was edging higher by 0.07% to 1.2406.

In the background, the US dollar index was drifting lower by 0.21% to 101.80, having hit an intra-session low of 101.60 overnight.

Dragging on the Greenback, last Friday, Federal Reserve Governor, Christopher Waller, joined the ranks of top officials arguing for a downshift in the pace of rate hikes to 25 basis points per meeting.

Most markets in Asia remained closed on Monday, in observance of the Lunar New Year holiday across the region, although those that remained open were generally higher.

Later in the day, at 1500 GMT, the US Conference Board would publish its index of leading economic indicators for the month of December. In parallel, Eurostat will publish its preliminary reading for consumer confidence in the single currency bloc for the month of January.

After the close of markets in London, at 1745 GMT, European Central Bank chief, Christine Lagarde, was to speak at Deutsche Boerse's annual reception.

Saga confirms reports of possible asset sale

Saga, the specialist provider of products and services to those over 50, confirmed that it was in talks to potentially sell Acromas Insurance Company Limited with a view to reducing its debt pile. Its board has "concluded that a potential disposal of its Underwriting business is consistent with Group strategy and would crystalise value and enhance long-term returns for shareholders." Saga also said that it had reviewed the options available to optimise its operational and strategic position in the insurance space as it transitions to a capital-light business and looked to cut debt. "Discussions are ongoing and there can be no certainty that any transaction will occur," it added. "Any disposal of AICL would require regulatory and shareholder approvals. A further announcement will be made in due course."

Primary Health Properties has bought Irish property management business Axis Technical Services and signed a long-term agreement providing access to a strong pipeline of future primary care projects in Ireland, the company said on Monday. Axis manages a portfolio of more than 30 properties, including the majority of PHP's Irish portfolio, it added. No financial details were disclosed. "The acquisition gives the group a permanent presence on the ground, further strengthening its position in the country and relationship with the Health Service Executive, Ireland's national health service provider," PHP said.

Infrastructure group Balfour Beatty said it had been awarded a £1.2bn contract by Britain's National Highways to deliver a package of works for the proposed Lower Thames Crossing. The company on Monday said it would be responsible for the design and delivery of more than 10 miles of new highway as part of the project to build a new tunnel under the River Thames aimed at easing traffic congestion in the south of England.