London pre-open: Stocks seen up after last week's losses

London stocks were set to rise at the open on Monday following heavy losses last week.

The FTSE 100 was called to open 32 points higher at 7,910.

CMC Markets analyst Michael Hewson noted that on Friday, the S&P 500 fell sharply but managed to hold above and rebound off its 200-day SMA, even as it fell to a one-month low, with the Nasdaq 100 also rebounding off its 200-day SMA.

"This recovery off key technical supports should offer European markets a modest rebound when they open later this morning, after last week’s sharp falls," he said.

"As we look towards a new week, and the end of the month tomorrow, last week’s falls have called into question whether markets in Europe can hold onto their February gains, while US markets have already slipped into negative territory for the month, after last week’s sharp falls."

In corporate news, Primark owner Associated British Foods lifted full-year guidance as consumer spending proved to be more resilient in the first half and inflationary volatility had eased.

The group said it now expected adjusted operating profit to be broadly in line with the previous financial year after previously forecasting adjusted operating profit below the €1.44bn made in 2021-22.

AB Foods, which also owns sugar, grocery, agriculture and ingredients businesses, said Primark traded “very well” for the half year, with total sales expected to be £4.2bn, up 19% on the same period last year at actual exchange rates. Adjusted operating profit margin for the half was forecast to be above 8%.

International distribution group Bunzl reported a rise in annual earnings, driven by product cost inflation, volume recovery in the first half and growth from acquisitions.

Pre-tax profit for 2022 rose 11.6% to £634.6m, as revenue grew 9.8% at constant exchange rates to £12bn. Shareholders were rewarded with a 10% rise in the total dividend to 62.7p a share.

Bunzl also revealed it had bought a business in Germany and completed the acquisition of another in Canada.

The company said it had signed a deal to buy Arbeitsschutz-Express, an online distributor of workwear and PPE in Germany, which generated €41m (£35m) of revenue last year. It also completed the acquisition of Capital Paper, a Canadian distributor of foodservice packaging and consumables, cleaning & hygiene supplies, and industrial packaging products.