London pre-open: Stocks to edge up ahead of ECB, US inflation

Sharecast
Pre-open Market Report
06:33, 10th June 2021

(Sharecast News) - London stocks were set to edge up at the open on Thursday, taking their cue from a positive Asian session, as investors eye the latest US inflation data and a policy announcement from the European Central Bank.
The FTSE 100 was called to open 15 points higher at 7,096.

CMC Markets analyst Michael Hewson said: "This week's price action in equity markets appears to have been more or less dictated by how big a rise we might see in today's US CPI report for May, as well as how the European Central Bank sees the current outlook for the economy in Europe over the next few months.

"US markets finished yesterday's session on the back foot across the board, as investors geared up for a big day data and central bank wise, with markets in Europe set to open slightly higher from where they left off yesterday evening.

"Up until recently the ECB was faced with the prospect of having to talk down the recent rise in long term bond yields across the bloc, however the declines seen in the past few days would appear to have bought the bank some time in that regard.

"With the decline in US yields and the success of central bankers in convincing investors that the recent sharp rise in prices is transitory, pressure for the ECB to look at the prospect of a possible timeline for the paring back of the PEPP program has diminished somewhat."

In corporate news, a dramatic shift to buying cars online during pandemic lockdowns helped Auto Trader limit full-year losses and reinstate its dividend.

The company reported a 37% fall in pre-tax profit to £157.4m as revenue fell 29% to £262.8m. A dividend of 5p a share was declared.

In the year ahead, Auto Trader said it expected to deliver high single digit growth on full-year 2020 average revenue per retailer and operating profit margins in line with 2020 levels.

Elsewhere, Patrick Drahi, a multibillionaire telecoms dealmaker, has bought a 12.1% stake in BT to capitalise on the company's involvement in the rollout of faster broadband in the UK.

Drahi has bought 1.2 billion BT shares through Altice UK, which he wholly owns. Altice is Drahi's telecoms group and Altice UK is separate from other companies in the group.

Based on Wednesday's closing share price, Drahi's stake in BT would be valued at about £2.2bn.

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The information, investment views and recommendations in this article are provided for general information purposes only. Nothing in this article should be construed as a solicitation to buy or sell any financial product relating to any companies under discussion or to engage in or refrain from doing so or engaging in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the writer but no responsibility is accepted for actions based on such opinions or comments. Vox Markets may receive payment from companies mentioned for enhanced profiling or publication presence. The writer may or may not hold investments in the companies under discussion.

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