London pre-open: Stocks seen down; French politics in focus

(Sharecast News) - London stocks were set for more losses at the open on Thursday as investors mulled political developments in France. The FTSE 100 was called to open down around 16 points.

Kathleen Brooks, research director at XTB, said: "France has been plunged into a political crisis, the question now is, will it trigger a crisis for financial markets? Late on Wednesday, the French government lost a no-confidence vote linked to its budget. This was widely expected, and it leaves France rudderless at the same time as its budget deficit has swelled to 6% of GDP.

"In the immediate term, the President will need to appoint a new PM, however, we could be in a situation where any new PM will face the same challenges as Barnier if they try to pass a budget that contains measures to bring down the budget deficit.

"The crisis is ostensibly over the Budget; however, it was precipitated by June's election, which resulted in no clear winner and a fractured parliament. France cannot hold another parliamentary election until next summer, however, Marine Le Pen has made it clear that she is the Kingmaker. After the vote she said that her party will work with the new government to pass a budget. However, that will likely mean far fewer tax hikes and spending cuts, which may not do much to dent the budget deficit."

On the UK macro front, the S&P Global construction PMI for November is due at 0930 GMT.

In corporate news, AJ Bell reported a record full-year financial performance, with revenue rising 23% to £269.4m and profit before tax up 29% to £113.3m, driven by higher revenue margins and operational efficiency.

The FTSE 250 company recorded strong operational growth, adding 66,000 platform customers, increasing assets under administration by 22% to £86.5bn, and boosting assets under management by 45% to £6.8bn.

Its board proposed a 16% increase in its total dividend and announced a £30m share buyback programme.

DS Smith posted a slide in half-year earnings, hit by "challenging" market conditions, including weaker prices and higher costs.

The paper and packaging firm said revenues in the six months to 31 October fell 4% to £3.4bn, while adjusted operating profits slumped 39% to £221m.

Like-for-like box volumes grew by 2%, however.

The blue chip said the figures, which were in line with expectations, had been hit by higher input costs, notably in fibre and paper. Packaging prices were also lower.

The Competition and Markets Authority said it has cleared the proposed merger between Vodafone and Three on the proviso that the companies promise to invest billions to roll out a combined 5G network across the UK.

The competition regulator also said that the telecoms companies, which first announced their tie-up 18 months ago, should cap certain mobile tariffs and data plans for three years, protecting customers from short-term price rises.

UK sportswear and fashion retailer Frasers Group lowered the upper end of full-year profit forecasts, citing weaker consumer confidence leading up to and after the government's recent Budget and a tougher trading environment.

The company now expects adjusted pre-tax profit for the 2024/25 fiscal year of £550m-600m compared to prior guidance of £575m-625m. Interim profits were down 1.5% to £299.2m on the same basis.