London pre-open: Stocks to fall after Powell strikes hawkish tone

(Sharecast News) - London stocks were set to fall at the open on Thursday as investors mulled a more hawkish tone from US Federal Reserve chair Jerome Powell overnight.

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

The Fed cut interest rates by 25 basis points on Wednesday, as widely expected, and announced the end of quantitative tightening.

However, Powell dented the mood after he said a further reduction of the policy rate at the December meeting was "not a foregone conclusion".

Danske Bank said: "This led to a repricing of front-end rate expectations, with the implied probability of a December cut declining from above 90% to around 60%."

It added: "Ahead of the meeting, we expected Powell to avoid pre-committing to a December rate cut, but his clear pushback against the market pricing was more hawkish than even we anticipated.

"Powell emphasised that 'another cut in December is far from assured' amid the committee's 'strongly differing views' about the future, and that 'there is a growing chorus of feeling we should maybe wait a cycle'. He highlighted that despite the shutdown, available data does not signal significant further cooling in labour markets."

In corporate news, Standard Chartered said it expected income to be towards the upper end of its 5% to 7% growth range after reporting a rise in third-quarter earnings driven by its wealth division.

Pre-tax profit grew 3% to $1.77bn. Chief executive Bill Withers said the Asia-focused lender now expected to hit its 13% target for underlying return on tangible equity in 2025 - a year earlier than planned.

Precision instruments supplier Spectris said that sales had grown by double digits in the three months ended 30 September, continuing the improvement experienced in the second quarter.

Spectris said third-quarter sales were 11% higher at £302.7m on an overall basis, while like-for-like sales improved 4%.

On a divisional basis, Spectris Scientific sales were 12% higher on a reported basis and Spectris Dynamics sales rose 10%.