London pre-open: Stocks seen down amid China Covid woes

(Sharecast News) - London stocks were set to fall at the open on Monday following a mostly downbeat session in Asia, amid growing Covid cases. The FTSE 100 was called to open 12 points lower at 7,373.

CMC Markets analyst Michael Hewson said: "Last week saw another positive session for European markets with the DAX closing higher for the 7th week in a row and its highest levels since the beginning of June, and a 5-month high.

"The FTSE 100 also managed to finish the week higher, posting a 2-month high in the process, although it has continued to struggle to get much beyond the 7,400 level.

"Since the October lows, markets in Europe have been rallying on an expectation that eventual interest rate hikes might not be as high as was thought to be the baseline case a few weeks ago, although we can expect to see a lower open today, as rising Covid infections in China prompt tighter controls, and weakness in Asia markets."

In corporate news, Virgin Money reported a strong rise in full-year profits driven by higher interest rates.

The bank said pre-tax profit surged 43% to £595m. It also posted impairment losses of £52m, compared with a £131m credit a year ago.

Catering company Compass posted a rise in full-year underlying operating profit and revenues, as it hailed record net new business.

In the year to 30 September, underlying operating profit grew 87.5% to £1.59bn, on revenue of £25.8bn, up 37.5% on the previous year.

For 2023, constant currency underlying operating profit growth is expected to be above 20%, with organic revenue growth of around 15%, and an underlying operating margin above 6.5%.