London pre-open: Stocks to nudge higher after last week's tech selloff

(Sharecast News) - London stocks were set to nudge a touch higher on Monday following last week's tech-fuelled losses and as oil prices eased.

The FTSE 100 was called to open around five points higher. At 0720 GMT, Brent crude was down 1.1% at $97.23 a barrel and West Texas Intermediate was off 0.6% at $90.27 after Donald Trump said new attacks on Iran were unlikely while talks to end the conflict progress.

Speaking to CNN, the US president said: "It depends on whether or not they sign a very strong agreement.

"The answer is, highly unlikely it's going to be necessary."

Investors will also be mulling news over the weekend that US chip giant Nvidia has launched an investigation after founder Jensen Huang admitted having an affair with a woman suspected by US officials of being a Chinese spy.

In a memo sent to employees on Sunday, Huang - who has led the business for more than 30 years - admitted he had been unfaithful to his wife, writing: "I owe my family and all of you an apology."

Separately, Nvidia confirmed the board would open an independent investigation "in light of recent reporting that...Huang has been the target of a foreign intelligence effort".

As far as the AI trade is concerned, Ipek Ozkardeskaya, senior analyst at Swissquote, said strong earnings from key players, including hyperscalers and chipmakers, have failed to revive appetite so far this earnings season.

"Investors have focused on relentless spending and falling free cash flow rather than strong growth numbers, judging that the cost of growth has become too high," she said. "At some point, investors got their hopes up that Democrats could slow spending, helping hyperscaler shares rebound and making the outlook somewhat mixed.

"But the implications for AI enablers - chipmakers and data centres- are negative: whatever the reason, if AI spending slows, demand growth for their businesses will slow. And given that these stocks were priced to perfection, valuations would need to readjust.

"Again, upcoming AI earnings could- and most probably will- show that orders remain healthy and that existing projects continue to support revenue growth. But investors are increasingly questioning how quickly the next wave of projects will move forward if a Democratic-controlled Congress pushes for greater scrutiny of data-centre construction, energy consumption and the broader consequences of AI."

As a result, she said, company guidance will matter more than a strong quarterly beat going forward, and investors will look for signs of delayed projects, greater caution around customer commitments or weaker visibility beyond existing orders.

In UK corporate news, Kainos said it delivered a strong first half, with adjusted pre-tax profit rising 30% to £41.7m on revenue growth of 37% to £268.8m.

The IT group also reported higher bookings and a larger contracted backlog, supporting confidence in future earnings as it held guidance for the full year.

The profit increase was driven by strong growth in Digital Services, particularly UK public sector and healthcare work, alongside continued expansion of its Workday business, where recurring revenue continued to grow strongly.