London pre-open: Stocks seen flat as investors continue to mull US inflation

(Sharecast News) - London stocks were set for a steady open on Friday following a downbeat close on Wall Street, after another hotter-than-expected US inflation reading.

Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said: "Yesterday's mix of economic data - which pointed at higher-than-expected inflation and lower-than-expected spending in the US - finally broke the Federal Reserve (Fed) doves' and the equity bulls' back for at least a day.

"US producer price inflation jumped to 0.6% on a monthly basis in February, and to 1.6% on a yearly basis. Higher fuel and food prices were to blame. But even taking the volatile energy and food prices out, the core metric showed higher-than-expected price pressures last month, core PPI remained steady at the 2% y-o-y.

"Retail sales, on the other hand, improved less than expected. The data forced the market to reconsider the Fed expectations. The probability of a June rate cut fell to 60%. The 2-year yield jumped to 4.70%, the 10-year yield spiked to 4.30%, the dollar index sharply rose and equities fell - though losses reversed toward the end of the session. The S&P500 closed the session 0.29% down and Nasdaq fell 0.30%."

In corporate news, Vodafone and Swisscom confirmed that the Swiss telecom group will take over Vodafone Italy for €8bn, creating the country's second-largest broadband provider.

The news follows a statement released on 28 February by the two companies that confirmed media speculation regarding a potential sale.

The deal is subject to regulatory approval and customary requirements, but is not expected to close until the first quarter of 2025.

Heat treatment and thermal processing services specialist Bodycote delivered a rise in annual profits, driven by a strong performance at its aerospace and defence division.

The company posted an operating profit of £127m, up 14%, with revenues increasing 8% to £802m and said it was on track to deliver medium-term margin growth of more than 20%.

WH Smith announced that its chief financial and operating officer Robert Moorhead would retire after more than 20 years with the company.

Max Izzard, currently senior vice-president of group and corporate finance at Burberry, would succeed him from 1 September, with Moorhead stepping down from the board on 30 November.

It said Izzard would bring extensive experience in multi-site international consumer businesses, having held senior roles at Burberry and IHG.