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London pre-open: Stocks seen higher as inflation remains in focus

Thu, 14th Oct 2021 07:36

(Sharecast News) - London stocks were set to rise at the open on Thursday following a mostly positive session on Wall Street.
The FTSE 100 was called to open 35 points higher at 7,176.

CMC Markets analyst Michael Hewson said: "It's still proving to be extremely difficult to define a direction, however due to last night's resilient US performance markets here in Europe look set to open slightly higher, with the FTSE 100 looking to open at its highest levels in over a month.

"Inflation risk remains a clear and present concern after China PPI in September moved above 10% to its highest level in over 25 years at 10.7%, although CPI was more subdued at 0.7%.

"Yesterday's US CPI numbers, which came in more or less in line with expectations, prompted a bit of a selloff in the US dollar, as well as a flattening of the yield curve as US 10-year yields fell back, and an US 2-year yields popped higher.

"With yesterday's Fed minutes now out in the open, the nature of the discussions appears to suggest that tapering will begin before the end of this year, with the only debate as to whether it will start in mid-November, or mid-December. There was some disagreement about how quickly the taper should be implemented, however the most likely outcome would be something along the lines of $5bn a month in mortgage-backed securities and $10bn a month in US treasuries."

In corporate news, private property rental company Grainger reported a rebound in performance in the second half of its fiscal year, with lettings at 94% as Covid restrictions were lifted.

The company, which has a 7,000-home portfolio, said it expected to hit 95% occupancy "shortly", in a trading update for the 12 months to September 30. It also unveiled the purchase of a build-to-rent development scheme in London, on a forward funding basis for £141m.

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