London pre-open: Stocks seen up ahead of BoE announcement
London stocks were set to rally at the open on Thursday following an upbeat close in the US, after the Federal Reserve delivered on taper expectations, with all eyes on the latest policy announcement from the Bank of England.
The FTSE 100 was called to open 80 points higher at 7,250.
CMC Markets analyst Michael Hewson said: "Last night’s Fed meeting saw the central bank accelerate its tapering program to $30bn a month, from January as expected, while adopting a slightly more hawkish outlook when it comes to tackling the risks of rising inflation.
"Fed officials also brought forward their expectations of rate hikes to three in 2022 and three in 2023, however the tone of the statement, as well as the press conference suggested that they still believed that current levels of inflation were likely to be transitory, even if the word wasn’t used in the statement. The reference to supply and demand imbalances and the reopening of the economy was just a roundabout way of saying the same thing. Nonetheless the change of tone does suggest that the Fed is alive to the risk of higher prices and will act if they deem it necessary.
"As a result, the initial spike in 2 and 5 year yields along with the US dollar, gave way to a fading of the move, while US stocks rallied to their highs of the day.
"As such today’s European market session looks set to be a strong one, and with the Fed meeting now in the rear-view mirror, all attention now turns to today’s Bank of England and ECB decisions, where the inflation problem is just as real, especially for the Bank of England after yesterday’s big jump in headline CPI in November."
In corporate news, Aviva has increased its share buyback programme to as much as £1bn and extended the time period for the repurchases to be made. The insurer announced a £750m buyback in August due to end on 17 February. It has extended the deadline to 31 March.
UK fund manager Schroders confirmed it was in talks with renewable energy investor Greencoat Capital about taking a "significant" stake in the company.
"There is no certainty these talks will lead to any final agreement," Schroders said in a statement, adding that it continues to "evaluate potential acquisition opportunities in line with its strategy to build a comprehensive private assets platform and enhance its leadership position in sustainability".
Sky News reported Schroders was set to splash out £360m to buy a 75% stake in Greencoat.
Commercial property investor LXI REIT has acquired a 16-acre long-let property in Middlesbrough valued at £58.9m from Knight Frank.
LXI REIT said that it would satisfy the acquisition of the asset, currently let to Sainsbury's, via the issue of 35.71m new ordinary shares at an issue price of 145.p each, a 9.4% premium to the company's ex-dividend EPRA NTA on 30 September, and a further £7.0m in cash.