London pre-open: Stocks seen higher after huge Wall Street gains

London stocks were set for a firm start on Thursday as equity markets reopen after the Christmas break, following huge gains on Wall Street.

The FTSE 100 was called to open 41 points higher at 6,727, after the Dow surged more than 1,000 points on Wednesday, racking up its biggest one-day points gain ever. This followed Wall Street’s worst-ever performance on Christmas Eve.

Stephen Innes, head of Oanda Asia Pacific trading, said: "It didn't take much to persuade the bargain hunters into action as early retailer reports are all pointing to a strong holiday season while investors took comfort in Kevin Hassett's, chairman of the White House Council of Economic Advisers, affirmation that Jerome Powell’s job is ‘100% safe’.

"And oil bulls finally had something to cheer about with WTI recovering north of 9 % reflecting gains in US equity markets but also supply discussions.

"The surge in online purchases over the holiday season should be a reminder for the markets never to underestimate the purchasing power of the US consumer, as Mastercard payments tracking between November 1 and Christmas Eve leapt 5.1% from a year ago.

"This data comes at the perfect time and will provide a huge relief for investors who had to watch with sheer horror the Christmas Eve plunge. There was a good buzz to buy the dip given the US underlying data suggested the latest rout was far too extreme and unwarranted. And indeed, for long-term investors who are more apt to weather the volatile times, which aren't about to leave the picture any time soon, post-Xmas equity market bargains were there for the taking."

Adding to the upbeat mood were reports that a US government delegation will travel to Beijing in the week of 7 January to hold trade talks with Chinese officials.

UK retailers could be in focus after data from Springboard showed that the number of people heading off to the Boxing Day sales has dropped for the third year running despite heavy discounting. According to Springboard, the number of shoppers to shopping centres, high streets and retail parks had fallen 3.1%year-on-year by 1600 GMT on Wednesday.

Elsewhere, a survey of company directors from the Institute of Directors revealed that business confidence in the British economy has declined to the lowest level since the EU referendum. About 57% of more than 700 company directors surveyed said they expected things to get worse, while less than 20% expected an improvement. This was the worst net score since the IoD started its confidence survey in 2016.

Unsurprisingly, there was little in the way of UK corporate news.

Evraz confirmed it was looking at a potential combination of coal assets with fellow producer Sibuglemet.

The company, responding to media speculation about a joint venture, said it was exploring ways to "increase the long-term security of supply of a wide range of coking coal grades required for Group's operations".

"The company notes however that such options have not been considered by the company's board of directors as at this point and accordingly no decisions have been made. The company will make further announcements in due course as and if may be appropriate," Evraz said.

Contracts for differences online service provider Plus500 said it expected full year performance to be ahead of expectations as "strong momentum" reported last month continued.

"The group has continued to perform well since the implementation in August of regulatory changes by the European Securities and Markets Authority," the company said in a trading statement.