London pre-open: Stocks seen down on weak US, Asian cues
London stocks were set for more losses on Tuesday following weak US and Asian sessions, amid growing fears of a recession.
The FTSE 100 was called to open 90 points lower at 6,869.
CMC Markets analyst Michael Hewson said: "US markets saw more big falls yesterday with the S&P500 posting its worst daily loss since October 2020, and its weakest close since June last year. The Nasdaq 100 also got clobbered with a similarly negative day, although both remain above their January lows.
"The negative sentiment from yesterday looks set to translate into further weakness for markets in Europe later this morning, as crude oil and natural gas prices continue to move higher, as Russia hints it may limit energy flows through Nordstream One.
"Elsewhere Nickel prices have been going parabolic in Asia, rising from $80k to $100k a tonne in less than an hour to new record highs this morning. Nickel, which is used in the production of electric vehicle batteries, rose 90% yesterday, and has doubled again today, with the volatility being seen in commodity markets continuing to exert downward pressure on equity markets in the process, as Asia markets once again fall to new multi month lows."
In corporate news, high street bakery Greggs swung to a full-year profit beyond pre-pandemic levels as its stores reopened from lockdowns, but warned of significant cost headwinds in 2022 from inflation and higher commodity prices.
The chain, famous for its sausage rolls, reported a pre-tax profit of £145.6m in the 12 months to January 1, compared with a £13.7m loss last year and £108.3m profit in 2019.
In first nine weeks of 2022, like-for-like sales in company-managed shops rose 3.7% compared to 2020 and 44.2% against lockdown-affected period in 2021.
M&G announced a £500m share buyback as the investment manager posted reduced annual operating profit resulting partly from changes to the expected death rate.
Adjusted operating pre-tax profit fell to £721m in the year to the end of December from £788m a year earlier as assets under management rose to £370m from £367.2m. Profit fell partly because of lower benefits from changes to longevity assumptions. M&G said it would buy back £500m of shares after generating £2.8bn of capital over two years, beating its £2.2bn target.
The FTSE 100 group set a new target of £2.5bn capital generation by the end of 2024. The company proposed an unchanged second interim dividend of 12.2p a share, taking the annual payout to 18.3p a share - up from 18.2p in 2020.