London stocks were set to fall at the open on Thursday following downbeat US and Asian sessions, as investors eye the latest policy announcement from the European Central Bank.
The FTSE 100 was called to open 35 points lower at 7,060.
CMC Markets analyst Michael Hewson said: “Today’s European open looks set to be a negative one, on the back of yesterday’s weaker US close and weakness in Asia markets this morning.
“This leads us to today’s European Central Bank rate meeting amidst speculation that the bank will be the first of the major central banks to announce the start of tapering to its asset purchase program.
“Given the current environment this seems highly optimistic and begs the question as to whether its remotely credible for the European Central Bank to be even considering tapering its asset purchase program at a time when economic growth in the global economy, and Europe is starting to show signs of slowing?
“From the price action of the last couple of days in bond and equity markets there are some who clearly think so, and while in the case of the Federal Reserve, one can make a case for easing back on the accelerator by the end of the year, it’s hard to make a similar case in Europe.”
In corporate news, Morrisons stuck to its full-year guidance as the supermarket chain reported a 37% drop in first-half profit before exceptional items.
Pre-tax profit before tax and exceptionals fell to £105m from £167m in the six months to the end of August from a year earlier as revenue excluding fuel increased 3.7% to £9.05bn.
Statutory pre-tax profit fell 43.4% to £82m. Morrisons declared no dividend because it is the subject of a bidding auction that is likely to result in the company’s sale. The company said it expected annual pre-tax profit before exceptionals including rates paid to be higher than the £431m a year earlier excluding £230m waived rates relief.
Gambling company 888 Holdings said it had agreed to buy the non-US international business of William Hill from Caesars Entertainment for £2.2bn.
The combination is expected to deliver “significant operating efficiencies” including pre-tax cost synergies of at least £100m a year, leading to improved profit margins, 888 said in a statement.
