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28 Jan 2021 | 07:36

London pre-open: Stocks seen lower after Wall St losses

(Sharecast News) - London stocks were set to fall at the open on Thursday following heavy losses on Wall Street. The FTSE 100 was called to open 50 points lower at 6,517.

CMC Markets analyst Michael Hewson said: "Last night's Federal Reserve rate decision was somewhat overshadowed by the big surges in the so-called Reddit stocks, and the sharp slide in US and European equity markets yesterday, which prompted large swings in pricing and volatility.

"While European markets came under pressure, US markets also fell sharply, with the Dow posting its biggest one day fall since October, a fall that is likely to see European markets open lower this morning.

"Not even a record busting quarter for Apple, who posted a record $111.4bn in revenues appears to have been enough to stem the current weakness.

"If investors were hoping that the Fed were going to come to the rescue last night their hopes were quickly dashed simply because last night's sell-off may well have simply a case of cause and effect."

In corporate news, Diageo increased its interim dividend as the drinks company reported first-half operating profit down 8.3% to £2.2bn.

Net sales for the six months to the end of December fell 4.5% to £6.9bn as a 1% increase in organic sales was more than offset by currency movements. Diageo increased the dividend by 2% to 27.96p a share.

Budget airline easyJet said it expected to fly no more than 10% of 2019 capacity in the second quarter as the coronavirus pandemic almost wiped out revenue for the three months to December 31.

The company, hammered by the slump in passenger numbers due to Covid-19, said first quarter group revenue slumped 88% to £165m, while passenger numbers plummeted 87% to 2.9 million.

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