London pre-open: Stocks seen lower on downbeat US cues

London stocks were set to fall at the open on Wednesday following heavy losses on Wall Street on the back of a hawkish testimony from Federal Reserve chair Jerome Powell.

The FTSE 100 was called to open 19 points lower at 7,900.

CMC Markets analyst Michael Hewson said: "Any prospect that we might see a dovish Powell yesterday was quickly dashed as the Federal Reserve chairman struck quite a different tone to the one he used at the last FOMC press conference.

"While markets focussed on his comments about disinflation at the beginning of February, there was only one mention of that word in his statement, in his remarks to US lawmakers yesterday, and that was to say there was little sign of it.

"As for today’s European session, we look set to see a lower open on the back of yesterday’s sharp US selloff, with the focus in Europe on German retail sales for January and the final iteration of EU Q4 GDP which is expected to see be revised lower from 0.1% to 0%"

In corporate news, Tullow Oil annual profits almost doubled as the company cashed in on higher oil and gas prices sparked by the war in Ukraine.

Gross profit for 2022 almost doubled to $1.08bn, on a 40% rise in revenue to £1.78bn with group production in line with guidance.

Free cash flow rose to $267m from $245m and net debt fell to $1.9bn from $2.1bn.

Elsewhere, insurer Admiral cut its full-year dividend as it posted a decline in profits in a "challenging" market.

Pre-tax profit fell 39% from 2021 to £469m, with group net revenue down 4% to £1.49bn.

The board proposed a final dividend of 52p a share, down from 72p a share a year earlier and taking the dividend for the year to 112p, down from 187p.