London pre-open: Stocks seen higher as investors cheer OPEC deal

Stocks in London were set for a positive start on Thursday after OPEC ministers announced a deal to cut production for the first time since 2008.

The FTSE 100 was called to open 61 points higher than Wednesday’s close at 6,910.

CMC Markets’ Michael Hewson said: “It has been agreed that production will fall into a range between 32.5m and 33m barrels a day, however given that production in August was 33.3m barrels the cut doesn’t equate to a significant reduction, at a time when the market is already oversupplied.

“That being said oil prices rallied strongly given the low expectations of any form of deal, however it remains likely that further upside may be difficult, if for all the talk, the detail is found wanting.”

On the data front, UK money supply, net consumer credit and mortgage approvals are at 0930 BST. In the US, the third release of second-quarter GDP, initial jobless claims and wholesale inventories are at 1330 BST. Pending home sales are at 1500 BST.

In corporate news, Capita warned that full year profits will be some way short of current forecasts after its third quarter was hit by a slowdown in some areas, one-off costs and recent hesitation among clients.

The FTSE 100 business process outsourcing group said revenues would grow 4-5% in the calendar year and that underlying profit before tax would be between £535m and £555m, around 13% short of current City forecasts.

Tobacco maker Imperial Brands is on track to meet full year expectations at constant currency and exchange rates as it reports growth from its US acquisitions.

The company said it remained in a “strong” position to generate returns for shareholders as it delivers against its strategic agenda.

Leisure operator Merlin Entertainments posted a trading update on Thursday, outlining its performance over the key summer period.

The firm saw 10.7% total revenue growth across the group, or 3.7% at constant exchange rates.

Of that, Midway Attractions and Legoland Parks both grew 3.7%, and Resort Theme Parks saw a 4.5% rise in revenue, all at constant exchange rates.