London pre-open: Stocks seen up as investors eyed ECB

(Sharecast News) - London stocks were set to rise on Thursday ahead of the latest policy announcement from the European Central Bank and PPI reading in the US, as investors continued to mull the impact of a hotter-than-expected US inflation print a day earlier.

The FTSE 100 was called to open around 25 points higher.

The US producer price index for March is due at 1330 BST. Before that, the ECB policy decision is at 1315 BST.

Danske Bank said: "Today's focus will be the ECB meeting where we expect no change in the policy rate. We anticipate that the primary insight from the meeting will be a confirmation of the current ECB narrative, thereby indicating that the ECB is on track to deliver a rate cut in June.

"While this meeting may be considered an interim meeting and lead to limited market reaction, we expect ECB to deliver a clear commitment for a June rate cut, in the form of an explicit guidance of an 'intention to cut by 25bp in June'.

"No guidance will be offered beyond that point on the pace of rate cuts or the end level of the tightening cycle. We still like our baseline scenario of three cuts of 25bp this year, but see risks skewed for ECB delivering less than that this year, due to the sticky underlying inflation."

On home shores, an industry survey out earlier showed the housing market continued to strengthen last month as prices stabilised and buyer demand improved.

According to the latest RICS UK Residential Survey, buyer demand had a net balance of 8 in March, the most positive result since February 2022.

New instructions also strengthened, with a balance of 13.

House price trends, meanwhile, became less negative for the seventh consecutive month. The house price balance was -4, an improvement on February's -10 and well above September's low of -67.

RICS noted: "This suggests a stable picture is now in place for house prices across the UK."

As a result, respondents were increasingly optimistic about the coming months, with a net balance of 13 expecting sales volumes to rise over the next three months. In February, the balance was 6.

Tarrant Parsons, senior economist at the Royal Institution of Chartered Surveyors, said: "Demand continues to recover gradually across the UK housing market, with new buyer enquiries rising for a third month in succession.

"With the inflation backdrop turning a little less difficult of late, this has led to expectations that the Bank of England will be able to start lowering interest rates later in the year. This should continue to support the market to a certain degree going forward."

In corporate news, AstraZeneca announced that it will increase its annual dividend by 7%, which the board said demonstrates its confidence in the company's performance and cash generation.

The company said it would raise the annualised payout for 2024 by 20cents to $3.10 per share.

"This uplift is in line with our progressive dividend policy, which remains unchanged, and reflects the continuing strength of AstraZeneca's investment proposition for shareholders," said chair Michel Demaré.

Cybersecurity specialist Darktrace lifted its guidance for the year after a strong third quarter saw annualised recurring revenue grow 23.5% year-on-year to $731.1m.

The FTSE 250 company experienced revenue growth of 26.5% to $176.1m. It said it now expected its adjusted EBITDA margin for the quarter to surpass its full-year guidance of at least 21%, as it raised its expectations for year-over-year revenue growth and adjusted EBITDA margin.