London pre-open: Stocks seen down as investors mull Fed minutes
London stocks were set to fall at the open on Thursday as investors digest the latest minutes from the US Federal Reserve.
The FTSE 100 was called to open 20 points lower at 7,567.
CMC Markets analyst Michael Hewson said: "As suspected, the war in Ukraine did temper the Federal Reserve’s decision to hike rates at its meeting in March. Last night’s minutes showed that several participants would have been minded to go for a 50bps move, however an abundance of caution prompted them to stay their hand until events became clearer knowing that they had the option to go harder and faster later on.
"This now looks set to be the base case from here on in, with a 50bps move in May now pretty certain, especially if next week’s US CPI for March moves strongly through 8%.
"The minutes also showed that there was a serious discussion about balance sheet reduction, with the potential to also start next month, with a general agreement that we could see $95bn a month, $60bn of that being in treasuries, and $35bn in mortgage-backed securities.
"This appears to be a consensus view although some on the FOMC wanted to go further with no limits on how fast the runoff is done. Not surprisingly bond yields made new intraday highs, while US stocks hit their lows of the day before bouncing back, to close off their intraday lows, but still lower for the second day in a row. This weakness has translated into a weaker Asia session and as such looks set to see markets here in Europe also open lower later this morning."
In corporate news, real estate investment trust Workspace said that growth in like-for-like occupancy and a rise in rent per square foot had resulted in a higher fourth-quarter rent roll.
Workspace reported another quarter of strong growth in like-for-like occupancy, up 3.0% in the quarter to 89.6%, and up 7.8% over the year, to reach normalised pre-Covid levels with scope for further growth.
Gambling group Entain said first-quarter revenues rose by a third after a strong performance from its retail shops as Covid lockdown curbs were eased.
The company, which owns the Ladbrokes and Coral betting shop chains, on Thursday said online net gaming revenue fell 8% in the three months to March 31, in line with expectations versus strong 2021 comparators.