London pre-open: Stocks seen lower after Nvidia selloff

(Sharecast News) - London stocks were set to fall at the open on Monday following a selloff in Nvidia shares in the US on Friday. The FTSE 100 was called to open around 10 points lower.

Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said: "The week kicks off on a weak note following a moody trading session across Europe and the US on Friday. One of the most significant moves of last two trading days of the US was a 10% selloff in Nvidia sales for ... no reason other than the fact that it was the end of the month, the end of the quarter and the end of H1, and investors preferred taking profits while they repositioned for the new half than buying more Nvidia shares at peak levels, and at a very high valuation with little certainty regarding how to value a stock that's price-to-projected sales hit the highest of the S&P 500.

"But still, Nvidia is expected to deliver around $28bn in the Q2, more than double the same time last year, while Microsoft is expected to announce 15% sales and Apple just 3%. It's just that, no one really knows at this point, if Nvidia deserves a higher price tag.

"This week, the US will reveal its latest GDP update on Thursday. US growth is expected to be revised slightly higher from 1.3% to 1.4% down, but that's down from 3.4% printed a quarter earlier."

In UK equity markets, Prudential said it would return $2bn to investors via a share buyback to be completed by mid-2026.

"Progress towards our financial objectives will increase the potential for further cash returns to shareholders. Our dividend policy remains unchanged, with the board continuing to expect the 2024 annual dividend to grow in the range of 7-9%," the company said.

Insulation and building products group SIG delivered a profit warning after a challenging first half, as ongoing softness in the building and construction sector across Europe resulted in subdued demand across the majority of its end-markets.

The company said it now has a "more cautious view of the timing of any potential market improvements during H2", and expects full-year underlying operating profit be in the range of £20-30m, below the current consensus range of £36.7-43m and the £53.1m reported last year.

Elsewhere, Mike Ashley's Frasers Group said it has entered into a multi-year partnership with THG that will "mutually enhance retail operations at both groups, aligning with Frasers Group's Elevation Strategy".

The partnership includes the integration of the customer credit and loyalty proposition, Frasers Plus, into THG's Ingenuity platform. It marks the first Frasers Plus partnership with an external partner.

Frasers Group will also benefit from THG's courier management services to drive the efficiency and performance of its Australian fulfilment and logistics operations, supporting the international expansion.

In addition, Frasers will buy THG's luxury brand portfolio including Coggles and Flannels.