London pre-open: Stocks seen higher on upbeat US, Asian cues
London stocks were set to rise at the open on Tuesday following solid sessions in the US and Asia.
The FTSE 100 was called to open 48 points higher at 6,514.
CMC Markets analyst David Madden said: "While the regulators might have been a little nervous yesterday, the mood in stock markets was upbeat. Equity traders were fearful last week as there were brief worries that losses incurred by certain hedge funds because of GameStop’s monster rally might cause disruption to the markets as a whole.
"Concerns circulated that investment firms might rush to liquidate positions as a way of freeing up cash to cover margin requirements. Even though silver was targeted by the Reddit brigade, the overall sentiment was positive. A number of hedge funds admitted they endured large losses on account of the GameStop situation but some confidence was restored to the markets seeing as they are soldiering on. Indices in Europe and the US rallied yesterday.
"Silver has handed back some of its recent gains as futures exchanges have raised margin requirements - it is a common move when volatility is high.
"Equity markets in Asia are up thanks to the bullish move seen in the US, European indices are called higher."
In corporate news, fourth-quarter profits at oil giant BP fell to a worse-than-expected $115m as the coronavirus epidemic battered energy demand.
The company reported a full year loss of $5.7bn after writing down the value of oil and gas assets by $6.5bn in response to lower long-term energy prices forecasts.
Support services company DCC said group operating profit for its third quarter was “strongly ahead” of the prior year.
The company said that, notwithstanding the disruption and uncertainty caused by the global pandemic, it recorded strong organic operating profit growth for the three months ended 31 December, while also benefiting from acquisitions completed in the prior year.
It said that, assuming normal weather conditions for the rest of the financial year, it expected that the year ending 31 March would see good growth in operating profit, ahead of current market consensus expectations.