London pre-open: Stocks to gain as NatWest, BP report

(Sharecast News) - London stocks were set to rise at the open on Friday as investors digested the latest policy announcement from the Bank of Japan, with results from BP and NatWest in focus.

The FTSE 100 was called to open around 23 points higher.

The BoJ left its benchmark interest rate on hold at 1.25%, as expected, following a 25 basis point hike in September. The decision was taken with an 8-1 vote, with board member Takata voting for a hike.

Danske Bank said: "The meeting marks a landmark, as the BoJ now judges underlying inflation to be 'generally consistent' with its 2% target. The efforts initiated in 2013, when the 2% target and heavy QE were introduced, have thus finally paid off, and Japan is officially free of deflation.

"The core inflation forecasts for 2027 and 2028 were lifted by 0.1pp to 2.7% and 2.3%, respectively. At the same time, BoJ highlighted the risk of future inflation overshooting, clearly signalling that more rate hike will come, and we expect the next one in December. The bank also decided to increase its pace of ETF selling, and it will now take about 43 years to unwind its holdings, versus the previously estimated 112 years."

On Thursday, the European Central Bank - which has lifted rates twice since June - left the deposit rate at 2.50%, while the interest rates on the main refinancing operations and the marginal lending facility were held at 2.65% and 2.90%, respectively. The decision was in line with expectations.

Market participants will also be mulling quarterly earnings from Amazon released overnight. Shares in the company tanked after hours as third-quarter sales and profit missed expectations.

On home shores, the latest data from Nationwide showed that house price growth was the slowest in October since 2024.

House prices rose 0.5% on the year, down from 0.8% growth in September. On the month, there was no change in October following a 0.3% decline the month before.

The average price of a house stood at £273,566 this month, down from £274,251 in September.

Nationwide chief economist Robert Gardner said October's annual house price growth marked the weakest since January 2024.

"Market activity and house price growth have slowed in recent months, in part reflecting the uncertain economic backdrop," he said. "Geopolitical tensions remain high, with the conflict in the Middle East exerting upward pressure on energy prices, fanning inflation concerns.

"This in turn has led to mounting financial market expectations of Bank Rate increases, which have maintained upward pressure on the market interest rates which underpin mortgage pricing."

In corporate news, NatWest reported attributable profit of £1.5bn for the third quarter, down from £1.6bn a year earlier, while return on tangible equity slipped to 21.6% from 22.3% and earnings per share fell to 19.3p from 19.8p.

However, the lender's cost-to-income ratio improved to 45.7% over the year to date, from 47.8% a year earlier, helped by gross cost savings of around £420m.

"Based on our latest expectations for interest rates and economic conditions, we reaffirm the outlook provided in our H1 2026 results," NatWest said.

BP posted a surge in third-quarter profit amid rising refining margins.

Third-quarter underlying replacement cost profit - BP's core measure of income - rose to $8.46bn from $2.21bn in the same period a year earlier, beating expectations of $7.33bn. The oil giant said the jump is due mainly to significantly higher realised refining margins and a significantly higher gas and marketing trading result.

Drugmaker AstraZeneca posted another solid earnings beat, with year-to-date revenue and profits both rising and core earnings per share up 14%, alongside a further stepup in latestage pipeline momentum.

Total revenue for the nine months ended 30 September increased 7% to $46.88bn, driven by $43.96bn of product sales and a 33% jump in alliance revenues, while reported EPS climbed 10% to $5.62. Operating profits advanced 10% to $11.80bn, and underlying earnings grew 11% to $16.70bn. Third-quarter revenues rose 7% to $16.21bn, with core EPS up 17% to $2.79.