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London pre-open: Stocks seen lower; Parliament to vote on snap election

Market Reports

London pre-open: Stocks seen lower; Parliament to vote on snap election

Wed, 19 April 2017
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London pre-open: Stocks seen lower; Parliament to vote on snap election

(ShareCast News) - London stocks were set for more losses on Wednesday, having suffered their worst day since the Brexit vote a day earlier after Prime Minister Theresa May announced plans for a snap general election on 8 June.
The FTSE 100 was expected to open down 27 points at 7,120.

The House of Commons is due to vote on May's plan for an early election later on Wednesday, with a two-thirds majority approval needed.

CMC Markets analyst Michael Hewson said: "Yesterday's surprise move by UK Prime Minister Theresa May has invited criticism in some parts, however given the narrowness of the Conservative majority and the refusal of a number of politicians to accept last year's referendum vote, the likelihood of further Brexit related flash points between now and April 2019 were always likely to be a clear and present danger to the success of the upcoming negotiations, as well as her room for manoeuvre.

"In calling a swift election between the French and German elections she will be hoping to take advantage of the weakness of her political opponents who are in disarray, as well as diluting the influence of the more extreme elements of her own party on the Brexit process."

On the corporate front, profits surged at Associated British Foods in the first half of the year as the sugar business benefited from higher prices and Primark opened 16 new clothes stores around the world.

On revenue up 7% to £7.3bn in the 24 weeks to 4 March, underlying profit before tax increased 35% to £652m - with statutory PBT mushrooming 92% thanks to the sale of its US herbs and spices and south China cane sugar operations for a profit of £255m.

Outsourcing company Bunzl reported a rise in first quarter revenue following new business wins and acquisitions.

Revenue increased 18% at actual exchange rates and rose 4% at constant exchange rates, compared to the same period last year, due to a 2% improvement in underlying growth and a 3% impact from acquisitions, which also partly offset the effect of fewer trading days in the quarter.

Pest control and hygiene group Rentokil Initial posted its first quarter trading update, with ongoing revenue up 23.8% - or 10% at constant exchange rates - to £579m.

The FTSE 100 firm's total revenue was up 22.9%, or 9.2% at constant currencies, to £580m.

There are no major UK data releases due.