London pre-open: Stocks to start higher, tracking gain in yuan, Nikkei-225

The Footsie was being called to start the session sharply higher, with sentiment buoyed by gains in stocks overnight in Tokyo and last Friday, on Wall Street.

To many investors' relief, the People's Bank of China set today's fixing for the country's currency, the yuan, 0.3% higher at 6.5118 - its loftiest level since November.

Britain's top flight index was expected to start the session up to 77 points up from the previous session's close of 5,707.60.

However, the Shanghai Stock Exchange's Composite Index closed 0.63% lower to 2,746.

Japan's Nikkei-225 on the other hand rocketed 7.16% to 16,022.

US equity markets were scheduled to remain closed on Monday in observance of Presidents' Day.

Chinese exports and imports weakened substantially in January, with exports 11.2% weaker year-on-year in US dollar terms (consensus: -1.8%) and imports off by 18.8% (consensus: -3.6%).

However, economists cautioned the data had likely been distorted by the impact of the Lunar New Year holidays.

"It is arguably too early to jump to conclusions and we’ll have to wait until we get the February data and can iron out
some of the seasonal volatility before we can get a clearer idea of how trade is performing," Capital Economics wrote in a research note sent to clients on Monday morning.

Japanese gross domestic product sharnk by 0.4% quarter-on-quarter in the first three months of the year (consensus: -0.2%).

All eyes will now turn to European Central Bank president Mario Draghi's quarterly testimony before the European Parliament, at 14:00GMT.

Citing conversations with policymakers, Reuters reported on 12 February there was "firm support" within the governing council for a deposit rate cut at the ECB's next meeting, in March.

Nonetheless, "appetite for more radical action is still limited" the newswire said.

HSBC to stay put in London

Banking giant HSBC said it had decided to retain its headquarters in the UK, adding that it was dropping its three-yearly review of where it is based.

The bank said the board decision was unanimous and comes after HSBC had threatened to move to Hong Kong in retaliation for stricter UK regulation.

In a statement, HSBC said the UK was "an important and globally connected economy".

"It has an internationally respected regulatory framework and legal system, and immense experience in handling complex international affairs," HSBC said.

"London is one of the world's leading international financial centres and home to a large pool of highly skilled, international talent. It remains therefore ideally positioned to be the home base for a global financial institution such as HSBC."

Reckitt Benckiser saw broad growth in the year to 31 December, despite a year of mixed market conditions, with the company reporting its full year results on Monday.

The FTSE 100 consumer goods giant saw total net revenue grow 5% on a constant currency basis to £8.87bn, and like-for-like revenue grow 6%, which exceeded company targets.

Reckitt's gross margin expanded during the year by 140 basis points to 59.1%, which the company's board said was driven by mix, commodity costs and cost optimisation initiatives.

Its adjusted operating margin was up 210 basis points to 26.8%. Reported earnings per share were up 6% to 240.9p, and diluted earnings per share were up 12% to 258.6p.

"RB delivered excellent growth and margin expansion in 2015 as a result of our continued focus on our Health, Hygiene and Home Powerbrand portfolio and supported by our culture of innovation and agility," said chief executive officer Rakesh Kapoor.

Defence group BAE Systems has appointed Charles Woodburn to the newly-created role of chief operating officer.

Woodburn will report to chief executive Ian King, and will be appointed to the BAE Systems board as an executive director in the second quarter of this year.

King said: "As a highly qualified engineer with considerable international business experience, Charles will strengthen and broaden the strategic and operational capabilities of the business as a welcome and valuable addition to the leadership team."