London pre-open: Stocks to rise on positive Asian, US cues

London stocks were set to rise at the open on Tuesday following positive sessions in the US and Asia.

The FTSE 100 was called to open 12 points higher at 7,244.

CMC Markets analyst Michael Hewson said: "Unlike last week, US markets carried on the gains from markets in Europe, led by the Russell 2000, with the Nasdaq lagging, while yields which fell sharply on Friday, recovered most of their lost ground.

"The positive tone carried through into Asia this morning, as investors reacted to the 0.5% cut in Chinese reserve requirements yesterday, as well as this morning’s November trade numbers from China, which showed that domestic demand was bouncing back.

"In recent months Chinese exports have held up well due to businesses ordering early so that they can build up their pre-Christmas inventory levels, with machines and electrical goods seeing strong demand. This recovery trend has continued for the fourth month in a row as exports climbed by 22%, beating expectations of 20.3%.

"Imports also picked up, helped by inventory rebuilding as well as decent demand around “Singles Day” rising 31.7%, against an expectation of 21.5%. A rebound in coal imports to deal with an energy shortfall as well a higher demand for copper also helped boost the data."

In UK corporate news, defence engineering firm Babcock reported a rise in underlying interim profit, but expressed caution over the Omicron coronavirus variant and ongoing inflation and supply chain constraints.

Underlying pre-tax profit for the six months to September 30 came in at £98.7m compared with £58.2m a year ago. Revenue rose to £2.2bn from £2.05bn.

Ferguson said its expectations for annual results had increased after the plumbing and heating distributor reported a surge in first-quarter profit.

Operating profit for the three months to the end of October rose 64.2% to $739m as reported revenue increased 26.6% to $5.37bn. On an adjusted basis, operating profit rose 58.5% to $767m. Revenue growth in the second quarter has been similar to the first, Ferguson said in a trading update.

Growth is likely to ease in the second half but the company said its full-year expectations had increased. It did not publish guidance.