London pre-open: Stocks seen up on positive Asian cues
By Michele Maatouk
Date: Tuesday 24 Mar 2020
(Sharecast News) - London stocks were set to rise at the open on Tuesday, taking their cue from a positive session in Asia, which was boosted by the Federal Reserve's latest stimulus announcement.
The FTSE 100 was called to open 116 points higher at 5,110.
Ipek Ozkardeskaya, senior analyst at Swisquote Bank, said: "Another surprise Federal Reserve intervention yesterday helped curb losses in New York, but the S&P500 and the Dow closed the day circa 3% lower, and Nasdaq was flat.
"That's what the Fed is there for. The Fed pulled out the heavy artillery even before the Congress failed to find a midway and announced a second wave of massive monetary support on Monday, including unlimited Treasury and mortgage-backed securities purchases to set the market's mind at rest.
"The Fed announcement couldn't ease the selling pressure across equities, corporate and mortgage bonds at first, but the US equity futures were better bid in the overnight trading session as leading Asian indices applauded the Fed's efforts. Nikkei and ASX 200 jumped past 5%, as WTI crude tested the $25 offers."
In corporate news, Rio Tinto will curtail operations in South Africa and Canada to comply with measures imposed by the countries' governments in response to the Covid-19 crisis.
The FTSE 100 miner said all mining at its Richards Bay Minerals operation in South Africa would cease by midnight on 26 March for three weeks. In Canada the company is working with the authorities to reduce its business activity to a minimum after an order from the premier of Quebec.
JD Sports Fashion said it was pulling guidance and delaying publication of full year results after the UK government ordered non-essential shops to close down in response to the Covid-19 pandemic.
Dunelm Group updated the market given the "rapidly changing developments" around the Covid-19 coronavirus outbreak, confirming it had now closed its stores entirely, having previously planned to offer click and collect and deliveries for the vulnerable.
The FTSE 250 home furnishings retailer said it had access to ?175m of financing facilities through a committed revolving credit facility of ?165m and a ?10m overdraft, was in contact with suppliers and landlords, and intended to make use of the government's job retention scheme.
It said that in the past two weeks, it had seen an 8.8% reduction in like-for-like sales as the pandemic led to a drop in footfall.
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