London pre-open: Stocks to nudge down after Wednesday’s strong gains

by | Jul 20, 2023

(Sharecast News) – London stocks were set to nudge lower at the open on Thursday following strong gains in the previous session on the back of a softer-than-expected UK consumer price inflation print.
The FTSE 100 was called to open down around seven points, having risen 1.8% on Wednesday.

Investors will be mulling earnings overnight from Netflix and Tesla, as well as the People’s Bank of China’s latest policy announcement.

The PBoC said earlier that it was keeping the one-year loan prime rate unchanged at 3.5% and the five-year rate at 4.2%.

Pantheon Macroeconomics said: “This was in line with expectations, after the PBoC held the medium-term lending facility rate steady earlier this month, and the Bank has been fending off currency pressure.

“Policymakers are still gauging the effect of last month’s broad 10bp lending rate cuts. Both household and corporate net new loans were robust in June, after the lending rate cuts, but the economic impact looks modest, so far. Manufacturing and infrastructure fixed asset investment ticked up in June, though private sector investment cooled. This probably means that SOEs and local government financing vehicles drove the increase in corporate loans.”

In UK corporate news, budget airline easyJet said it swung to a pre-tax profit in the third quarter amid strong passenger demand.

For the quarter to the end of June, the company posted headline pre-tax profit of £203m, versus a loss of £114m in the same period a year earlier.

Chief executive Johan Lundgren said: “Our Q3 performance has been underpinned by strong passenger demand for easyJet’s network and services. We continue to provide great value to customers with around half of easyJet’s fares currently on sale still under £50.

“We are absolutely focused on mitigating the impact of the challenging external environment on our customers and flying them on their well-earned holidays.

“We continue to see good momentum as we move into Q4 where we will be operating over 160,000 flights and expect to deliver another record PBT performance. This winter we are adding more than 15% capacity and we see bookings ahead of the same period last year.”

Elsewhere, 3i Group reported a positive start to its new financial year, with a first-quarter increase in net asset value per share, and a total return of 4.1% for the period.

The FTSE 100 firm said its portfolio company, the Benelux discount retailer Action, showed significant net sales and operating EBITDA growth, driven by high customer footfall.

Additionally, the majority of its private equity portfolio performed well, while investment activity was focused on bolt-on transactions and the successful issue of a €500m euro bond.

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