London pre-open: Stocks seen muted as investors mull rate decisions

(Sharecast News) - London stocks looked set for a muted open on Monday despite solid gains in Asia, as investors continue to digest interest rate announcements from the Federal Reserve and the Bank of England last week. The FTSE 100 was called to open down five points at 7,412.

CMC Markets analyst Michael Hewson said: "Asia markets have continued the positive theme from Friday, while European stocks look set to open mixed as they look to consolidate last week's gains."

He added: "Having come off the back of 3 successive monthly declines, there was always the possibility that we might see a bit of a rebound at some point.

"The surprise was that it came in the last three days of last week at a time when the war between Israel and Hamas shows little sign of being dialled back.

"There were a number of catalysts, with the Federal Reserve being at the heart of them, while the US bond market also saw a big rebound after the US treasury outlined lower than expected bond issuance for the quarter. Throw in a goldilocks non-farm payrolls report and a couple of disappointing US ISM reports, and US 10-year yields saw their biggest weekly decline since March, as markets started to price in the prospect of rate cuts sometime in the summer of next year."

In corporate news, FTSE 100 aerospace group Melrose said it has signed a new $5bn aftermarket services agreement with engines giant GE Aerospace.

Melrose's GKN Aerospace division is widening its current risk and revenue sharing partnership (RRSP) surrounding GE Aerospace's high-thrust GEnx engine.

The new deal, estimated at $5bn over the full 30-year-plus life of the GEnx engine, will now cover new technology insertion, aftermarket repair of high-volume engines structures, and production of fan cases for a range of GE engines.

Elsewhere, Ryanair said it will pay its first ever dividend, as it posted a jump in first-half profit thanks to record summer traffic and higher fares.

In the six months to the end of September, profit after tax rose 59% to €2.18bn, with revenues up 30% to €8.58bn. Customer numbers jumped 11% to 105.4m and the budget airline declared a maiden dividend of €400m, or €0.35 a share.