London pre-open: Stocks to fall after weak Asian session
London stocks were set to fall sharply at the open on Monday, taking their cue from a weak session in Asia, which saw Japan’s Nikkei tumble more than 3%.
The FTSE 100 was called to open 50 points lower at 6,967.
Sentiment took a knock at the end of last week after the US Federal Reserve brought forward the timing of tighter monetary policy and after St Louis Fed president James Bullard said on Friday that a rate hike was coming as early as 2022.
CMC Markets analyst Michael Hewson said: "Given Bullard’s Friday comments, tomorrow’s testimony to Congress from Fed chair Jay Powell, coming so soon after last week’s press conference will be much more closely analysed for how he sees the US economy, as he briefs US lawmakers on how he and the Federal Reserve see the US economy, along with the timing of a tapering of bond purchases."
In corporate news, supermarket chain Morrisons said it had rebuffed an unsolicited £5.5bn bid over the weekend from the US private equity firm Clayton, Dubilier & Rice, which had offered to pay 230p a share in cash.
Morrisons’ share price closed at 178.45p on Friday, valuing the company at £4.3bn.
Hewson said: "The surprise bid could well give the entire sector a boost when the market opens later this morning given the surprising underperformance seen so far this year, despite the resilience shown by all, in their stepping up to the challenges of the pandemic."