London pre-open: Stocks seen higher on positive Wall Street cues

Tue 07 Jan 2020

LONDON (SHARECAST) - (Sharecast News) - London stocks were set for a firmer open on Tuesday despite ongoing tensions between the US and Iran, taking their cue from a positive session on Wall Street.
The FTSE 100 was called to open 35 points higher at 7,610.

CMC Markets analyst Michael Hewson said: "Even before US markets engineered their turnaround yesterday to finish the day higher, there had been signs that the sharp declines that had spilled over from Friday last week may well have started to run their course, with European markets closing well off their lows of the day, despite still finishing the day lower.

"The lack of any haven buying in US treasuries suggested that while investors were a little spooked by the rising tensions in the Middle East, as seen by the sharp rise in the gold price, the inability of both oil prices and gold prices to consolidate their new peaks encouraged investors to start buying back into stocks.

"Putting to one side the heat and noise of the events of the last few days, and in the absence of further violence and escalations the reality is that very little has changed. We already know that Iran and the US don't like each other very much, and this is unlikely to improve any time soon, with the rhetoric likely to remain heightened. As such unless an all-out shooting war breaks out, any likely next steps are unlikely to be anything that isn't already priced in, with oil prices only modestly higher, and now slipping back again in Asia."

Sentiment was likely to be boosted a little after the US Secretary of Defence denied claims that the US was planning to pull out of Iraq. He also said no Iranian cultural sites would be targeted by the US despite President Trump's threats.

In corporate news, supermarket group Morrisons reported a fall in like-for-like sales for the first 22 weeks of the second half in challenging conditions as the company said full year results would remain in the range of forecasts.

Like-for-like sales in the 22 weeks to January 5, group like-for-like sales excluding fuel were down 1.7%, with retail down 1.7% and wholesale of flat.

Group like-for-like sales including fuel fell 2.8%. Total sales were 1.8% lower excluding fuel and down 2.9% including fuel.

Premier Oil reported 2019 production of 78,400 barrels of oil equivalent per day in a trading update, which was at the upper end of its full-year guidance, said to have been underpinned by high operating efficiency and continued high rates from the Premier-operated Catcher Area.

The company also announced the proposed acquisitions of the Andrew Area and Shearwater assets from BP for $625m (475.05m), and an additional 25% interest in the Tolmount Area from Dana for $191m plus contingent payments of up to $55m.

It said it would release its full-year results for 2019 on 5 March.

Online gaming and entertainment solutions provider 888 Holdings updated the market on the year ended 31 December, reporting that as a result of its continued progress during the second half culminating in an all-time monthly revenue record in December, it remained confident in achieving an adjusted EBITDA outcome for the period in-line with its expectations.

The FTSE 250 firm said its performance was underpinned by the continued success of its 'Orbit' casino platform across a number of regulated markets, as well as further good revenue growth in its sport operations.

It did note that poker had remained a "challenging market", but said it was pleased with the progress made in the first-phase roll out of its new poker platform, 'Poker 8', which took place during the second half of the year.
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