London pre-open: Stocks seen up as investors eye Fed

(Sharecast News) - London stocks were set to rise at the open on Tuesday following a positive US close, as investors eyed the start of the latest Federal Reserve policy meeting. The FTSE 100 was called to open around 10 points higher.

Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said: "The Federal Reserve starts its two-day policy meeting today and deliver its latest policy verdict tomorrow.

"We are preparing to hear Jerome Powell ask for more patience and for more time to abate inflation. If that's the case, we could see a further meltdown in Fed rate cut expectations. The next stop is no rate cut in 2024, which would be a cold shower for the bulls."

On home shores, investors will be mulling the latest figures from the British Retail Consortium and NielsenIQ, which showed that the price increases at UK tills fell to their lowest since the end of 2021 in April as food inflation eased for the 12th straight month.

The annual rate of shop price inflation fell to just 0.8% in April, down from 1.3% in March, the BRC-NeilsenIQ Shop Price Index showed.

This was well below the three-month average rate of 1.4% and the lowest year-on-year increase since December 2021.

Non-food prices were 0.6% lower than where they were last year, with annual deflation accelerating from -0.2% the previous month. This was the sharpest decline since October 2021.

Meanwhile, food price increases fell to 3.4% from 3.7%, falling to its lowest since March 2022. Fresh food inflation slowed to 2.4% from 2.6%, hitting its lowest since November 2021, while ambient food inflation fell to 4.9% from 5.2%, its lowest since June 2022.

"One year on from the peak, shop price inflation levels are showing signs of normalising, providing relief to households," said Helen Dickinson, the chief executive of the BRC.

"While consumers will welcome the lower shop price inflation, geopolitical tensions and the knock-on impact on commodity prices, like oil, pose a threat to future price stability. Retailers will continue to do all they can to keep prices down, but Government has a role to play with pro-growth policies that allow businesses to invest in the customer offer."

In corporate news, HSBC group chief executive Noel Quinn said he was retiring after nearly five years in the job, in a shock announcement.

Quinn, 62, will remain in post until a new CEO is appointed. The news came as the lender posted a 1.8% drop in first-quarter profit to $12.7bn (£10bn), slightly higher than expectations, and unveiled a $3bn share buyback.

"After an intense five years, it is now the right time for me to get a better balance between my personal and business life," Quinn said.

Hospitality group Whitbread announced a £150m share buyback and beefed up its dividend after seeing its bottom line jump by more than a third in the year to 29 February.

The company, which owns Premier Inn, Beefeater and a number of other names in the pub, restaurant and hotels sector, said results were bolstered by a record annual profit from Premier Inn UK and an improvement in Germany where it continues to narrow losses. Adjusted pre-tax profit totalled £561m, up 36% on the year before, helping the company lift its total dividend by 31% to 97p per share.

Prudential reported an 11% increase in first-quarter new business profit to $810m in an update, excluding economic impacts, reflecting growth across geographical markets.

Adjusted for economic impacts, the profit remained stable at $726m. Additionally, first-quarter APE sales rose by 7% to $1,625m, indicating sustained momentum despite challenges in specific regions such as Vietnam.