London pre-open: Stocks seen higher on strong US cues; GDP eyed
Stocks in London were set for a firmer open on Wednesday, taking their cue from a positive session in the US, where indices closed at fresh highs, as investors await the release of UK economic growth figures.
The FTSE 100 was called to open 11 points higher than Tuesday’s close at 7,285.
On the corporate front, gross domestic product data for the fourth quarter is at 0930 GMT. In the US, existing home sales are at 1500 GMT while FOMC minutes are at 1900 GMT.
CMC Markets’ Michael Hewson said: “The pound continues to find a degree of resilience that has been surprising given concerns about some of the direction of recent economic data. Yesterday’s comments by Bank of England policymakers about confidence in their forecasts almost came across as an admission that their forecasting models weren’t fit for purpose.
“The admission by MPC member Gertjan Vlieghe that most economic models can never be perfectly accurate regardless of how much data and analysis is put into an excel spreadsheet, won’t have been a surprise to most of us who have sat and watched as the UK economy confounded predictions of disaster in the aftermath of the Brexit vote. That is because no spreadsheet can factor in that one big variable which has no clearly defined value, that of emotion, sentiment, psychology, whatever you want to call it, the human factor and how different people react to a variety of different stimuli.
“This effect is expected to be illustrated by today’s second iteration of Q4 GDP which is expected to be reconfirmed at 0.6%, and an annualised 2.2%.”
In corporate news, Lloyds Bank more than doubled full year pre-tax profits to £4.2bn from £1.6bn in 2015 as it announced a special 0.5p-a-share dividend.
Underlying profits came in at £7.9bn, slightly lower than £8.1bn in the previous year. Total income was £17.5bn compared with £17.6 bn in 2016.
A final ordinary dividend of 1.7p a share was declared making a total ordinary dividend of 2.55p a share, up 13% on 2015.
Medical technology company ConvaTec has launched GentleCath Glide, an intermittent catheter developed to provide more options for hydrophilic catheterisation, and has extended the Me+ direct to consumer programme in the US.
GentleCath Glide is a low friction hydrophilic intermittent catheter made with ConvaTec's FeelClean technology that activates when in contact with water and was developed for markets such as the US where healthcare insurance may limit users to certain categories of intermittent catheters and reduce their hydrophilic choices.
Housebuilder Barratt Developments posted its half-year results for the six months to 31 December on Wednesday, reporting completions outside London were at their highest level for nine years.
The company said London completions were in line with its planned build programme, with a significant uplift expected on wholly owned sites in the second half.
Half-year profit before tax for the period was £321.0m, an improvement of 8.8%.