London pre-open: Stocks seen higher as investors welcome Fed hike

London stocks are set to open higher, taking their cue from positive sessions in the US and Asia as investors welcome the Federal Reserve’s interest rate hike and reassurance that the tightening path will be gradual.

The FTSE 100 is expected to open 67 points higher than Wednesday’s close at 6,128.

“Early signs look positive and a Santa rally now looks on the cards, although as always I remain cautious as this could easily take a significant turn for the worse,” said Craig Erlam, senior market analyst at Oanda.

“I think Fed Chair Janet Yellen handled the situation very well which was reflected in how the market took everything into its stride in a relatively calm manner. The hike was communicated very effectively and the Fed acted in line with the expectations it had created, while ensuring that it got the message across that futures hikes will be gradual, thereby reassuring investors everywhere that there is no reason to panic. In other words, the Fed retained its credibility, something many have failed to do in what has been a year of central bank blunders.”

On the data front, UK retail sales at 0930 GMT will be eyed, while in the US, the Philadelphia Fed survey is at 1330 GMT along with the current account balance and initial jobless claims. US leading indicators are due at 1500 GMT.

AstraZeneca buys majority stake in Acerta

AstraZeneca has announced it will acquire a 55% stake in Acerta Pharma – a deal valued at $4bn (£2.7bn).

The deal will give the FTSE 100 pharmaceutical company access to the privately-owned US and Netherlands based biopharmaceutical company’s acalabrutinib inhibitor, which is in trials to treat B-cell blood cancers and multiple solid tumours.

London Stock Exchange Group (LSE) said equity capital raisings were down 2% to £40bn in “more challenging market conditions”. New issues were down to 161 new issues from 193 last year.

In a trading statement, LSE said secondary markets saw average daily UK equity value traded up 9%; Italian average daily volumes up 7%; derivatives contracts traded on IDEM in Italy rose 14%; MTS money markets (repo) value traded increased 21% and fixed income cash markets value traded declined 4%.

FTSE 250-listed retail real estate investment firm Tritax Big Box updated the market on its investment activity, portfolio performance and market conditions on Thursday morning.

It revealed it had invested £1.26bn in 25 big box assets - net of acquisition costs - and had let these to 21 tenants. 20 of these investments were standing assets, and five were pre-let developments.

The company made 11 new investments in 2015.

Tritax Big Box said its portfolio remained 100% let, with a contracted annual rental income of £68.2m as of December 16, 2015.