London open: Stocks gain ahead of Eurozone CPI

UK stocks gained on Wednesday morning ahead of the release of Eurozone data which is expected to show an improvement in inflation.

The flash estimate of the Eurozone consumer price index for November is expected to show a 0.2% year-on-year increase, compared to 0.1% in October. Core inflation, which excludes volatile components such as energy, is projected to gain 1.1% last month, in line with October.

The European Central Bank has been under pressure to do more to address prolonged low inflation in the euro-area. In Thursday's policy announcement, ECB President Mario Draghi is widely expected to reveal a new set of measures including further asset purchases and a cut to the deposit rate.

“Expectations of action from Mario Draghi and co. have got the region’s investors in a tizzy in the past fortnight, even if the last few days have seen those same expectations tempered by decent data,” said Connor Campbell, financial analyst at Spreadex.

Across the Atlantic, Federal Reserve Governor Lael Brainard said the central bank should go slow in raising interest rates. Speaking at the Stanford Institute for Economic Policy Research, he said there may be confines to the Fed’s ability to tighten monetary policy.

Fed policymakers Dennis Lockhart and John Williams may elaborate on interest rates when they speak separately in Florida at 1310 GMT and Portland, Oregon at 2040 GMT, respectively.

On the economic data front, ADP releases its employment report which is forecast to reveal employers added 190,000 jobs in November. The figures come ahead of Friday’s all-important non-farm payrolls report.

Back on home soil, the British Retail Consortium revealed that a drop in British shop prices accelerated in November. Prices declined 2.1% over the 12 months to November, worse than October's 1.8% decrease.

On the company front, Morrison Supermarkets braced for a demotion from the FTSE 100 when the index updates its list on Wednesday. The London Stock Exchange said the group is likely to move into the FTSE 250 as it suffers from a supermarket price war. Shares were down 0.73% at 0903 GMT.

Moneysupermarket.com was also in the red after founder Simon Nixon sold a 5.8% stake in the comparison website, pocketing a gross £98m.

The Sage Group dropped after reporting a fall in statutory operating profits due to the impact of currency fluctuations in Sage's key markets of Europe, the US and Brazil.

Greene King rallied after posting a rise in first half pre-tax profit and revenue thanks in part to the integration of Spirit Pub Company.