London pre-open: Further gains expected after FTSE 100 closes at record high

UK stocks are expected to test new highs on Tuesday after surging to a new record the previous session, as a tumbling pound gave markets a big lift.

The FTSE 100 is being called to open around 45 points (or 0.57%) higher than Monday's new all-time closing high of 8,023.87, after four straight days of gains.

"With the easing of tensions in the Middle East, safe-haven demand reversed course; global stock markets experienced a modicum of relief," said Stephen Innes, managing partner at SPI Asset Management.

Sterling was down a further 0.1% at 1.2337 against the dollar on Tuesday, extending its one-month decline to 2.1%, on rising hopes that the Bank of England will soon start to cut interest rates as inflation begins to drop sharply.

While projections for the number of rate cuts by the BoE have been scaled back slightly in recent months, expectations around monetary easing by the Federal Reserve have been pushed back much further, supporting the dollar,

Manufacturing purchasing managers' surveys (PMIs) from across the globe will be released on Tuesday, including figures from France, Germany and the wider eurozone, along with stats from the UK and US. We'll also have speeches from Bank of England members Jonathan Haskel and Huw Pill.

Later on, Wall Street will be waiting on the latest quarterly earnings results from blue chips Alphabet, GE Aerospace, General Motors, Tesla, UPS, Spotify, Visa and Lockheed Martin.

"The nature of the soft rebound, whether it's a dead cat bounce, a short-covering rally, or the beginning of a more promising trend, hinges largely on how investors interpret the earnings landscape and in which direction US economic data unfolds in the coming days," Innes said.

In UK corporate news, Primark owner Associated British Foods posted a jump in interim profit and revenue on Tuesday as it lifted its full-year profit outlook. In the 24 weeks to 2 March, adjusted pre-tax profit rose 37% to £911m, on revenue of £9.7bn, up 2% at actual rates and 5% at constant currency. The company said revenue growth was driven by continued good momentum in retail and food businesses. Adjusted operating profit was up 39% at £951m. Looking ahead, AB Foods said it was on track to deliver “significant” growth in both profitability and cash generation ahead of expectations at the start of this financial year.

JD Sports Fashion said it was buying US sports fashion retailer Hibbett for $1.08bn (£878m). Headquartered in Birmingham, Alabama, Hibbett has 1,169 stores in 36 states across the US trading under the Hibbett and City Gear fascias.

Anglo American reported an 11% increase in copper production in its first quarter, driven by higher throughput at Quellaveco despite planned lower grades, along with improved grades and throughput at Collahuasi and El Soldado. The mining giant said steelmaking coal production rose 7%, while iron ore production remained steady. However, rough diamond production fell 23% due to market inventory adjustments, prompting a downward revision of the full-year 2024 production guidance to 26 million to 29 million carats with adjusted unit costs of about $90 per carat.