London pre-open: FTSE seen flat as Brent hovers above $100 a barrel; ECB eyed

(Sharecast News) - London stocks were set for a flat open on Thursday as Brent crude remained above $100 a barrel and as investors eyed the latest policy announcement from the European Central Bank.

The FTSE 100 was called to open around five points lower.

Kathleen Brooks, research director at XTB, said: "This is an interesting backdrop for today's ECB meeting, where interest rates are expected to rise 0.25%. The sharp increase in European bond yields, which includes a 10bp jump in Spanish and Italian 10-year yields on Wednesday, suggests that the bond market is tightening European monetary policy, without the need for too much signalling about future rate hikes.

"Could Christine Lagarde surprise the market and talk down the prospect of back to back rate hikes for the ECB? It would be difficult for her to signal a long-term monetary policy tightening cycle when bond market volatility is already this elevated.

"If she is less hawkish than expected, the euro could be in trouble."

In UK corporate news, Associated British Foods said it expected full-year like-for-like sales at its Primark division to fall by 2.6% amid a tough consumer environment, adding that it also planned to introduce home delivery at the clothing retailer.

Primarks's total sales growth was expected to come in at 2% for both the fourth quarter and full year thanks to new stores and franchises.

The company, which also owns food and ingredients operations, maintained full-year guidance.

Electrical products retailer Currys said it remains comfortable with market consensus forecasts after a strong start to the new financial year.

Group like-for-like revenues were up 7% year-on-year over the 17 weeks to 29 August, with the larger UK and Ireland division growing by 6% and the Nordics growing by 9%.

"Across the group we saw growth in both stores and online, with new categories, B2B and Services all growing strongly," said chief executive Fredrik Tønnesen, who was appointed in August.

Drugmaker GSK said that Japan's Ministry of Health, Labour and Welfare has approved a prefilled syringe version of its shingles vaccine Shingrix, offering a simpler, readytouse presentation for healthcare professionals.

GSK said the vaccine was previously supplied in two separate vials that required manual mixing before administration, with the new format removing that step, streamlining use in clinical settings.