London pre-open: Stocks seen higher on positive US and Asian cues

Wed 15 May 2019

LONDON (SHARECAST) - (Sharecast News) - London stocks were set to gain at the open on Wednesday, taking their cue from positive sessions in the US and Asia as traders welcomed signs of a softening stance in trade relations between the US and China.
The FTSE 100 was called to open 15 points higher at 7,256.

London Capital Group analyst Jasper Lawler noted that Asian markets followed Wall Street higher overnight as trade war fears eased, rebounding from three-and-a-half month lows on a softening of stance from US President Trump and amid growing expectations of further stimulus from the Chinese government.

"Despite the advance, volumes have remained light suggesting that the bounce lacks conviction, which is hardly surprising given that Trump is preparing to slap tariffs on a further $300 billion of Chinese imports. A move that will not only hit the Chinese economy hard but also the US economy.

"Still, sentiment has picked up after a tough week as President Trump laid off the threats and appears to be in search of compromise. His comments that talks with China have not collapsed have been taken onboard by traders and helped stocks on Wall Street bounce overnight."

In corporate news, DIY chain owner Kingfisher maintained full year guidance as it reported a 0.8% rise in first quarter sales on a like-for-like basis.

In the UK and Ireland, sales at B&Q rose 2.8% reflecting a stronger weather-related performance, partly offset by a 2% impact from discontinuation of showroom installation services. Screwfix sales were up 4.5%.

Total group sales were 2.8bn.

Compass Group's first-half profit rose more than 5% as the catering company gained new business in North America and added UK defence contracts.

Underlying operating profit for the six months to the end of March rose 5.8% to 951m from a year earlier as revenue increased 6.6% to 12.5bn. Pre-tax profit rose to 852m from 793m.

Hargreaves Lansdown updated the market on its trading for the four month period ended 30 April, reporting net new business of 2.9bn, taking year-to-date net new business to 5.4bn.

The financial services provider said its assets under administration stood at 97.8bn at the end of the period, with active clients totalling 1,188,000 after adding net new clients of 53,000.
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