London pre-open: Stocks seen up as US Senate approves Covid relief bill

The FTSE 100 was called to open 42 points higher at 6,672.

The House is due to vote on and approve the package on Tuesday.

CMC Markets analyst Michael Hewson said: “The most striking part of the package is a means tested direct payment to most US individuals worth $1,400 per person, along with much more generous unemployment provisions.

“While all of this is welcome news for the prospects for a strong economic rebound, it also raises questions about how much further US long term yields can go, in terms of their current move higher. One thing seems certain, US long term yields look set to continue to rise with the 1.8% level on the US 10 year the next target, though we could see a pullback to 1.4% first.”

In UK corporate news, education publisher Pearson maintained its dividend as it delivered lower annual profits offset by a rise in online learning, reflecting school closures during the Covid-19 pandemic.

The company said adjusted operating profit fell to £313m from £581m, in line with expectations. A final unchanged dividend of 13.5p a share was declared.

Sales decreased 12% to £3.4bn, reflecting underlying performance, portfolio changes and currency movements, Pearson added.

Direct Line increased its dividend and announced a £100m share buyback as the insurer reported a 4.5% drop in annual profit.

Operating profit fell to £522.1m from £546.9m in the year to the end of December as gross written premiums dipped 0.7% to £3.18bn. Direct Line increased its final dividend by 2.8% to 14.7p a share and said it would buy back up to £100m of shares.