London stocks were set to fall at the open on Thursday following weak US and Asian sessions.
The FTSE 100 was called to open 44 points lower at 7,394.
CMC Markets analyst Michael Hewson said: “Having seen some decent gains in the early part of the week, yesterday saw European markets slide back after Fed chair Jay Powell reiterated the determination of the Federal Reserve to regain the initiative when it comes to reining in inflation.
“The weakness in Europe rippled into the US market session, after big profits miss from US retailer Target, which following on from Walmart the day before, saw losses accelerate, with the S&P 500 and Nasdaq 100 both closing over 4% lower. Asia markets haven’t been able to shake off this negative mindset, with a similarly weak session primarily led by Chinese tech stocks after Tencent also missed on profits.
“This weakness in US and Asia markets is set to translate into a sharply lower open for European markets, as we look ahead to the latest US weekly jobless claims numbers which in recent weeks have started to edge higher again, above 200k. The latest Philadelphia Fed business survey for May will also be closely monitored after the recent huge miss on the Empire manufacturing survey from earlier this week.”
In corporate news, budget airline easyJet said it expected third-quarter capacity to be 90% of pre-pandemic levels as it narrowed half-year loses.
The company reported a pre-tax loss of £557m compared with £645m a year earlier. Revenue surged to £1.5bn from £240m as Covid restrictions were eased.
Engineering company Smiths Group reported its fourth consecutive quarter of growth, leading the firm to maintain its full-year guidance of 3% organic revenue growth.
Smiths, which said organic revenues were up 4.2% year-to-date, stated its solid third-quarter performance comes amid ongoing sales momentum, with three divisions in growth. However, the group did acknowledge impacts associated with ongoing macroeconomic uncertainty, supply chain challenges, and an upcoming stronger comparator in the fourth-quarter.
