London pre-open: Stocks to edge up as investors eye US inflation data

(Sharecast News) - London stocks were set to edge up at the open on Thursday as investors eyed a slew of UK earnings releases and key US inflation data. The FTSE 100 was called to open around 15 points higher.

Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said: "All eyes are on the PCE prints today. The Federal Reserve's (Fed) favourite gauge of inflation, the core PCE, is expected to print the biggest jump in a year, both 3 and 6-year figures are expected to rise back above 2% after having eased below this level by the end of last year.

"That would back the uptick that the CPI figures also printed at the beginning of this month and further spoil the dovish Fed expectations. The Fed will probably cut the rates this year, yet a cut before summer won't be on the agenda if inflation doesn't continue to ease. Three Fed members repeated yesterday that the timing and the pace of policy easing will depend on data. Activity on Fed funds futures gives around 64% chance for a June cut before the data.

"Bets could go either way. A figure in line or ideally softer than expected should keep the Fed doves betting for the first rate cut to happen in June, whereas a stronger-than-expected figure could strengthen the hawks' hand and push the expectation of the first cut to... July."

In corporate news, British Airways owner IAG said it more than doubled annual profit as demand continued to rebound from the effects of the Covid pandemic.

Operating profit before exceptional items for the year to December 31 came in at €3.5bn compared with 2022's €1.24bn and the pre-pandemic figure of €3.25bn.

"Demand continues to be robust, with particular strength in leisure travel. We are currently 92% booked for Q1 2024 and 62% booked for H1 2024, ahead of our position last year," IAG said.

GSK announced that it has reached a confidential settlement in another lawsuit over its discontinued heartburn drug Zantac, concluding the case filed in a California state court that was scheduled for trial on 2 April.

The pharmaceuticals giant said the settlement aimed to mitigate the distractions associated with prolonged litigation. GSK maintained its position of not admitting liability in this settlement, committing to vigorously defending itself in other Zantac cases.

Weir Group delivered an 18% increase in adjusted profits in 2023 after beefing up margins more than expected as it pointed to further growth across the board this year.

Full-year adjusted pre-tax profit totalled £411m last year, up from £348m in 2022, with the adjusted operating margin rising 140 basis points to 17.4%, ahead of the 17.0% target. It said this was down to operational efficiency, the initial benefits from its Performance Excellence cost-savings programme and a year-on-year reduction in adverse transactional FX movements.