London pre-open: Stocks seen up; HSBC, Pearson results in focus

(Sharecast News) - London stocks were set to rise at the open on Monday as investors continued to keep an eye on developments in the Middle East.

The FTSE 100 was called to open 20 points higher at 7,311.

CMC Markets analyst Michael Hewson said: "Despite the fact the Gaza incursions occurred after European markets had closed on Friday markets in Europe look set to open slightly firmer, given the limited nature of the military action so far.

"It's easy to blame last week's declines in equity markets on the unpredictable nature of events unfolding in the Middle East, and while that is part of it, we also saw disappointment on several fronts over poor company updates, and downgrades to guidance which saw some outsized moves lower.

"This trend of outsized moves for companies that don't meet expectations on their forecasts is likely to continue this week, with more important company updates set to attract attention from the likes of HSBC today, as well as BP, Shell and Apple later this week."

In corporate news, HSBC posted a smaller-than-expected jump in third-quarter profits as it announced a $3bn share buyback.

In the three months to the end of September, pre-tax profit rose to $7.7bn from $3.2bn in the same period a year earlier, falling short of consensus expectations of $8.1bn.

Chief executive Noel Quinn said: "We have had three consecutive quarters of strong financial performance and are on track to achieve our mid-teens return on tangible equity target for 2023.

"There was good broad-based growth across all businesses and geographies, supported by the interest rate environment. Our wealth business also gained further traction, attracting $34bn of net new invested assets in the quarter and growing wealth balances by 12% compared with last year."

Retail conglomerate Frasers Group has sold the Missguided fast-fashion brand to Shein, as it hinted at further potential collaborations with the Chinese ecommerce giant.

The divestment, made for an undisclosed sum, was in line with Frasers' "disciplined approach to managing its portfolio of brands", the company said.

Under the terms of the deal, Shein is acquiring the intellectual property and trademarks of Missguided, but the real estate and employees will be retained by Frasers, as these have already been integrated into its wider fashion division.

Elsewhere, GSK reported positive results from the first part of a phase three trial for 'Jemperli', or dostarlimab, with standard chemotherapy for primary advanced or recurrent endometrial cancer patients.

The pharmaceutical group said the trial achieved its primary endpoint of overall survival, showing a significant benefit across the patient population. Additionally, the combination showed clinical benefits in specific patient subgroups with a tolerable safety profile. Jemperli has received US FDA approval for certain endometrial cancer patients and is under review in several other countries.