London pre-open: Stocks seen higher despite US, Asian declines
London stocks were set to rise at the open on Tuesday despite negative sessions on Wall Street and in Asia.
The FTSE 100 was called to open 20 points higher at 7,031.
Oanda market analyst Jeffrey Halley said: "A post-OPEC+ spike in oil prices, US fiscal fears, notably the debt ceiling, US political infighting, growth fears, inflation fears, rate fears; take your pick overnight as it sent Wall Street plummeting.
"Technology giants, in particular, took a beating, justified by their sensitivity to potentially higher US interest rates resulting from a Fed taper or a US government debt default. I am more in the camp that the introduction of more two-way pricing risks is a new reality for most investors after a rampant 18-month bull market pumped up unlimited free central bank money.
"Whatever it was shaking Wall Street, the session was ugly with the S&P 500 tumbling by 1.30%, the tech-heavy Nasdaq slumping by 2.14%, and the Dow Jones falling a comparatively modest 0.93%. Some short-covering has lifted Nasdaq futures 0.25% higher in Asia, suggesting a lot of the selling overnight was fast-money speculators, while S&P and Dow futures remain unchanged."
In corporate news, aerospace and motoring engineer Melrose said it expected the global shortage of semi-conductors to hit its automotive division after a rise in customer cancellations in the first quarter.
"At present the timing and duration of these constraints is uncertain, but recently the consensus view is that they have lengthened. There are a number of scenarios possible, but it is likely these are below previous expectations," the company said.
Strong demand in automotive was "being heavily constrained by customers due to their supply chain issues", it added.
However, Melrose said it was seeing improvement in aerospace end markets with revenue in the three months to September 30 up 16% from 2020 driven by restructuring and forecast "the pace of this to further pick up during the second half".
Elsewhere, bakery chain Greggs said the full-year outcome was set to be ahead of its previous expectations following a strong sales performance in the third quarter.
The company, famous for its sausage rolls, said two-year like-for-like sales were up 3.5% in the third quarter despite staffing and supply chain disruption.