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11 Mar 2021 | 07:39

London pre-open: Stocks seen up as US stimulus boosts sentiment

(Sharecast News) - London stocks were set to rise at the open on Thursday as US stimulus boosts sentiment. The FTSE 100 was called to open 18 points higher at 6,743.

CMC Markets analyst David Madden said: "Several hours after the end of European trading, it was announced that Congress backed the $1.9 trillion stimulus plan so it will be passed over to President Biden to sign off. The Dow Jones hit another record high, it closed above 32,000, following the announcement of the relief package.

"The bullish sentiment from the US pushed up equity markets in the Far East, in addition to that, European stocks are poised for a positive start."

In corporate news, supermarket chain Morrisons saw annual profits halved as it was impacted by extra Covid-19 costs, but also declared a special dividend alongside a final payout.

Profit before tax and exceptionals fell 50.7% to £201m, including £290m in direct Covid-19 costs.

A special dividend of 4p a share deferred from the second half of the 2019/20 fiscal year was declared along with a final dividend of 5.11p.

Rolls-Royce said it expected to turn cash flow positive in the second half of 2021 as the engine maker reported a £4bn annual loss inflicted by the Covid-19 crisis.

The company swung to a £4bn underlying pre-tax loss in the year to the end of December from a £583m profit a year earlier as underlying revenue fell to £11.8bn from £15.5bn. The reported operating loss widened to £2.1bn from £852m.

Rolls-Royce burned through £4.2bn of cash in 2020. The company predicted it would take a further £2bn cash flow hit in 2021 but that free cash flow would turn positive in the second half and reach at least £750m as early as 2022.

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