London pre-open: Stocks seen up after positive US close

London stocks were set to rise at the open on Thursday following a positive close on Wall Street, amid a deluge of corporate news.

The FTSE 100 was called to open 20 points higher.

Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said: "All’s well that ends well. US inflation came in line with expectations yesterday; core CPI fell for the first time in six months and the monthly CPI figure was a bit lower than expected.

"Cherry on top, retail sales stagnated in April and came to cement the idea that the US economy could be finally slowing along with the first insight from Home Depot, earlier this week, that missed revenue expectations and warned of slowing consumer demand due to the high-rate environment. Other big US retailers will be revealing their results in the coming hours and days, and they might reinforce the slowing demand narrative.

"The combination of slowing growth and softer inflation is a godsend for equity markets who needed this boost; there is nothing more appetizing for investors than the smell of lower future rates."

In UK corporate news, telecoms giant BT reported a 31% drop in annual profits after taking a £488m impairment of goodwill in the year to 31 March.

Reported pre-tax profit totalled £1.19bn, down from £1.73bn the year before, on revenues that were just 1% higher at £20.80bn. Normalised free cash flow was down 4% year-on-year at £1.3bn but ahead of guidance.

The company said it now expects to double normalised free cash flow over the next five years, rising to £1.5bn this year, £2.0bn in 2027 and £3.0bn by the end of the decade.

"Having passed peak capex on our full fibre broadband rollout and achieved our £3 billion cost and service transformation programme a year ahead of schedule, we've now reached the inflection point on our long-term strategy," said chief executive Allison Kirkby.

Sage Group reported a strong first half, with underlying total revenue increasing 10% to £1.15bn, and underlying operating profit ahead 18% year-on-year at £254m.

The FTSE 100 software firm recorded an 11% increase in underlying annualised recurring revenue, reaching £2.25bn, alongside progress in expanding its global cloud offer with the acquisition of Bridgetown Software and the introduction of its AI product, Sage Copilot.

Looking ahead, Sage anticipated organic total revenue growth for the 2024 financial year to align with the first half, and expected operating margins to continue trending upwards as it focussed on efficient scaling.