London pre-open: Stocks seen weaker as investors eye US inflation print

London stocks were set to fall at the open on Monday following a mostly downbeat Asian session, as investors eyed the release of the latest US inflation reading this week.

The FTSE 100 was called to open 17 points lower at 7,674.

CMC Markets analyst Michael Hewson said: "After several weeks of gains and having finished 2023 on a high note it was inevitable that at some point markets would probably take a step back, having been given a lift into year-end by a belief that rate cuts were coming in early 2024.

"This week attention shifts to the December CPI numbers which does have the potential to put the speculation about a March cut firmly back in its box. The sharp rebound in yields last week does suggest that markets are paring back pricing of a March cut with the US dollar also rebounding, as stocks in the US declined for the first time in 9 weeks.

"European markets also slid back with the DAX posting its biggest weekly loss since October, while the FTSE100 posted its biggest loss since November as a rebound in inflation and better than expected economic numbers saw traders pare back rate cut bets.

"This week’s main excitement looks set to be generated towards the back end of the week with the US CPI report, followed by China inflation and trade numbers for December."

A survey out earlier from Make UK and PwC showed that UK manufacturers are more bullish about the sector's prospects than they were 12 months ago.

The survey, which featured responses from over 200 senior manufacturing executives, found that 44.4% of companies see a moderate to significant improvement in industry conditions in 2024, compared with just 20.5% that expect conditions to worsen.

However, executives weren't so rosy about economic conditions at home and abroad: 41% expect UK conditions to deteriorate, while 38% foresee a worsening of the landscape overseas.

Nevertheless, 53% said they see opportunities in new products in 2024, while 27% are expanding into new markets.

Manufacturers are also confident about the impact that digital technologies will have on productivity and operational efficiency, with 23% of leaders citing opportunities in net zero, digital tech, cloud and artificial intelligence.

"The last few years have been a rollercoaster of emotions for manufacturers, yet they have more than demonstrated their resilience time after time. We are now seeing some hope that conditions may be improving, amid a more supportive and stable policy environment, but this must be cemented within a long term industrial strategy," said Stephen Phipson, chief executive of Make UK.

"While undoubted challenges remain, the accelerating use of digital technologies, our strength in innovation and expansion into new markets sets the scene for manufacturing to be at the heart of efforts to boost growth.”

In corporate news, Plus500 said that for the year ended 31 December 2023, it generated revenue of about $725m and EBITDA of $340m, both of which are "significantly" ahead of current market expectations.

"Plus500 made excellent operational and strategic progress during FY 2023. This included the expansion of the group's US futures businesses, the launch of a localised retail trading platform in Japan and further progress in the significant UAE market following the grant of a regulatory licence earlier in the year," it said.

"Additionally, the group added a regulatory licence in the Bahamas, which means it now holds 13 regulatory licences globally, representing a key competitive advantage for Plus500."

Elsewhere, LondonMetric Property said it had bought a warehouse in Doncaster for £21.2m which will be let to fashion retailer Next for 13 years.

The deal represents a net initial yield of 6.3%. Next will pay annual rent of £1.42m with fixed rental uplifts of 2.5%, increasing the purchase NIY to 7.1% within three years.

Separately, LondonMetric has sold an 18,000 sq ft office investment in Chiswick for £7.4m.