London stocks were set to rise at the open on Thursday, building on the gains from the previous session, which saw the top-flight index hit another record high after a weaker-than-expected US ADP report cemented rate cut expectations.
The FTSE 100 was called to open around 35 points higher.
Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said: "The US government remains shut, which means the BLS will likely not release the September jobs report this Friday. Yesterday's ADP numbers, however, injected a strong dose of dovishness to keep investors going for a few days longer. The data showed the US economy didn't add jobs in September, but instead lost 32'000. Part of this was due to an adjustment tied to government-sourced figures, but taken together with other data, the trend is clear: the US labour market is weakening. And that's before factoring in the political noise - Donald Trump is already threatening to fire thousands of federal employees if Washington fails to break the shutdown impasse.
"But voila, the picture is gloomy for workers, but not for investors. Markets cheered the sight of 32,000 job losses, as it gave solid support to dovish Federal Reserve (Fed) expectations. The US 2-year yield - the best gauge of Fed bets - fell sharply, while the 10-year yield slipped to 4.10%, helped by safe-haven inflows into Treasuries.
"Risk appetite, though, showed no sign of being hit by the shutdown drama. On the contrary - the S&P 500 and Nasdaq both closed at fresh record highs. Big Tech led again, with AI still the dominant narrative. Reports of new deals in the AI cloud space kept enthusiasm alive, while Google and Apple unveiled new smart home devices."
In corporate news, Tesco lifted its full-year guidance after a strong first half fuelled by the warm summer weather.
Group sales excluding VAT and fuel rose 5.1% in the 26 weeks to 23 August, to £33.05bn, while group adjusted operating profits sparked 1.5% to £1.67bn.
Water utility firm Pennon announced the appointment of Keith Haslett as chief executive officer, succeeding Susan Davy, who has served as CEO since 2020. Haslett
Has been the CEO of Affinity Water since January 2023 and is expected to join Pennon in 2026, following his notice period.
Iconic bootmaker Dr Martens said that it has entered the UAE for the first time through a distribution partnership agreement with Beside Group, and expanded its presence in Latin America by partnering with Crosby.