London pre-open: Stocks seen higher after China stimulus
By Michele Maatouk
Date: Tuesday 24 Sep 2024
(Sharecast News) - London stocks were set to rise at the open on Tuesday, taking their cue from solid sessions in the US and Asia, after China unveiled new stimulus measures.
The FTSE 100 was called to open around 30 points higher.
Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said: "Support from the world's major central banks, and the dovish expectations continue to rise this week. After lowering its 14-day reverse repo rate yesterday, the People's Bank of China (PBoC) announced today that it will lower its 7-day reverse repo rate from 1.7% to 1.5% and its reserve rate - the amount of money that the banks should keep aside - by 50bp to unlock 1 trillion yuan in hope to boost growth.
"They also announced a package to support the housing market. That's a lot measures announced all at the same time. Good news is that investors reacted positively to the stimulus measures, sending the CSI 300 and the Hang Seng index nearly 4% higher at the time of writing. Bad news is that the rebound in Chinese assets will likely remain fragile until the stimulus measures lead to concrete amelioration of the economic data."
In UK corporate news, low-cost computer maker Raspberry Pi posted better than-expected interim profit in its maiden results as a listed company.
Adjusted core earnings rose 55% to $21m, beating internal expectations. Raspberry Pi held full-year guidance, adding that volumes should normalise towards the end of the 12-month period.
"The first half of 2024 was characterised by a return to availability of components and in turn our products to our reseller partners and customers. Whilst volumes were marginally lower than expected, sales were skewed towards higher margin variants, yielding stronger unit economics and higher gross profits," said chief executive Eben Upton.
Engineering solutions business Smiths Group reported solid revenue growth against a record comparator in the year ended 31 July, as the company announced a group-wide "acceleration plan" designed to boost profitability and productivity.
Smiths also unveiled the acquisitions of two North American companies to bolt on to its HVAC and Flex-Tek businesses for a combined £110m.
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