London pre-open: Stocks seen rebounding from losses; Persimmon in focus
London stocks were set to open higher on Tuesday, recovering from the previous session’s losses as investors continue to eye Federal Reserve Chair Janet Yellen’s speech at Jackson Hole at the end of the week.
The FTSE 100 was set to open 24 points higher than Monday’s close at 6,852.
Oanda’s Craig Erlam said: “Yellen’s speech on Friday remains the headline event this week and I think we could continue to see an element of caution in the markets in the lead up to this. Investors are still not buying a 2016 rate hike, even following Stanley Fischer’s comments over the weekend regarding the economy – markets now marginally pricing in February - so the probability that Yellen says something that goes against what’s priced in seems quite high.
“The only question is whether she’ll strongly hint at a hike this year or indicate that holding off to early next year may be warranted, at which point markets would push the hike right back once again.”
On the data front, the UK CBI industrial trends survey is due at 0930 BST. In the US, Markit’s manufacturing PMI is at 1445 BST while new home sales are at 1500 BST.
On the corporate front, Persimmon reported a better-than-expected jump in first half pre-tax profit on Tuesday as the housebuilder shrugged off Brexit uncertainty.
Pre-tax profit rose 29% to £352.3m in the six months to 30 June on a 12% increase in revenue to £1.49bn. Analysts at Deutsche Bank had anticipated a 26% increase in pre-tax profits to £345m.
Rank Group, which operates Grosvenor Casinos and Mecca bingo halls, reported an increase in full-year pre-tax profit and revenues.
Adjusted pre-tax profit for the year to the end of June ticked up 4% to £77.4m while group revenue nudged up 2% to £753m.
Chief executive Henry Birch said: “I am pleased to report a solid set of results with group revenue up 2%, again recording like-for-like growth across all brands and channels in the year.
“This year we have focussed on delivering significant projects to ensure we have the right platform in place for future growth. This included the migration of our digital business onto a new platform, the rollout of an improved retail casino management system and investments into new generation machines in both our casino and bingo venues."
Hansteen Holdings posted a drop in earnings in the first half on Tuesday, blaming tough comparatives in the same period a year earlier.
The investor in UK and continental European industrial property said pre-tax profit fell to £54.8m in the six months to 30 June from £103.7m the previous year. The company said the decrease in profits was “largely due to the high property revaluation in the first half of 2015 that was not repeated in the first half of 2016”.