London pre-open: Stocks seen up despite Evergrande worries

London stocks were set to rise at the open on Thursday following losses in the previous session.

The FTSE 100 was called to open 17 points higher at 7,610.

CMC Markets analyst Michael Hewson said: "Today’s European open looks set to see a modest rebound largely due to position adjustment as we head towards the end of the week, month, and quarter tomorrow."

The positive opening call came despite growing concerns about Chinese property firm Evergrande, whose shares were suspended from the Hong Kong Stock Exchange earlier.

No explanation was given, but on Wednesday, Bloomberg reported that the company’s chair was under police surveillance.

In corporate news, pub and restaurant chain Mitchells & Butlers said it expected full-year earnings would be at the top end of expectations after a strong rise in sales and easing of cost headwinds.

The company said strong trading had continued through the fourth quarter, bringing year to date like-for-like sales growth to 9.1%, with total sales growth now of 10.5%.

"Cost headwinds are abating and remain at the bottom end of the range previously identified. We remain mindful of the challenging macroeconomic environment and pressures on the consumer however, as trading continues to be strong, we have confidence that the current year outturn will be at the top end of consensus expectations, with momentum into FY 2024," M&B said in a trading update.

Elsewhere, Babcock reaffirmed its full-year expectations as it said trading since the start of the financial year has been "encouraging".

In an update for the first five months of the year ahead of its annual meeting, the defence contractor hailed good organic revenue growth, an improved operational performance and higher cash flow compared to the same period a year earlier.

"New programme wins, contract renewals and progress on the group's opportunity pipeline remain strong, supporting the board's unchanged expectations for another year of organic revenue growth, further underlying margin expansion, improved free cash flow and progress towards the group's medium-term guidance," it said.

Gambling operator 888 Holdings reported a 10% decline in third-quarter revenue in a trading update to around £400m due to compliance changes, "customer-friendly" sports outcomes, and other factors.

The company said it now expected fourth-quarter revenues to be sequentially higher than the third quarter but lower year-on-year by mid-single digits, before returning to growth in 2024. Its adjusted EBITDA margin for 2024 was projected to be 18% to 19%, with the company maintaining its 2025 targets.