London pre-open: Stocks to gain on Fed rate cut hopes

(Sharecast News) - London stocks were set to jump at the open on Monday amid growing expectations of a rate cut by the Federal Reserve next month.

The FTSE 100 was called to open around 50 points higher.

Sentiment got a boost late on Friday after the head of the Federal Reserve Bank of New York said he sees scope for shortly reducing interest rates due to weakness in the labour market.

In a speech about inflation-targeting at a conference in Santiago, Chile, John Williams refrained from predicting when a rate cut would be appropriate, but said that he would support the move "in the near term".

"I still see room for a further adjustment in the near term to the target range for the federal-funds rate to move the stance of policy closer to the range of neutral," Williams said.

Ipek Ozkardeskaya, senior analyst at Swissquote, said: "Everyone heard that as a December rate cut, of course. The US 2-year yield fell back to 3.50% and the probability of a December cut jumped to 70% 0 from below 29% earlier in the same week. Holy!

"Other Fed members kept repeating that it would be better to wait before doing anything more, just in case the inflation monster wakes up and throws fireballs everywhere. But no - one man, one dove - outweighed all the other members who sounded worried about inflation, which is still near 3% in the US and well above the Federal Reserve's (Fed) official target."

In corporate news, mining titan BHP Billiton confirmed it is no longer pursuing a takeover of Anglo American that had threatened to wreck the latter's $57bn merger with Teck Resources.

BHP said a potential tie-up with Anglo, which would have created the world's largest copper producer, still had "strong strategic merits", but it is confident in its own organic growth strategy.

BHP had walked away from a previous approach in May 2024 after Anglo's board rejected three proposals from the larger group.

AstraZeneca said it will invest $2bn ramping up manufacturing facilities in Maryland, America.

The firm intends to both expand its existing flagship biologics plant in Frederick, and to build a new facility in Gaithersburg, which will develop innovative molecules to be used in clinical trials.

Both are expected to operational by 2029.

The investment is part of a $50bn US spending plan first announced by Cambridge-based AstraZeneca in July.

said it has signed a deal to sell its Truflo Marine business to Fairbanks Morse Defense for an enterprise value of �225m.

The sale of Truflo Marine, which provides valves and actuators to naval submarine programmes worldwide, "reflects our role as active managers of the business and further aligns IMI to three powerful growth trends - energy, automation and healthcare," the company said.