London pre-open: Stocks expected to slip early on

UK stocks are expected to open in negative territory on Wednesday, as markets continued to pull back after recent gains.

Pre-market futures are showing the FTSE 100 down 0.3% or 25 points from Tuesday's close of 7,410, as the index struggles for upside momentum – it has traded within a tight range of 50 points or so for the past three sessions.

"The last two days have seen European markets struggle to build on the gains of last week, with some modest profit taking starting to kick in, even as investors start to price in the prospect of rate cuts as soon as next year," said analyst Michael Hewson from CMC Markets.

"In the space of a week, we’ve gone from higher for longer back to rate cuts in 2024, and this time the push back from central bankers isn’t anywhere near as aggressive."

In economic news on Wednesday, German consumer prices stalled over the month of October, meaning the annual rate of inflation held steady at 3.8%, as expected by the market. Eurozone retail sales, due out at 1000 GMT, are forecast to show a 0.2% decline in September after a 1.2% drop in August.

However, the focus of the session is likely to be on speeches from central bank heads in the UK and US, Bank of England governor Andrew Bailey and Federal Reserve chair Jerome Powell, as markets look for any indication of how future monetary policy will pan out.

In company news, mining giant Anglo American saw another big slide in diamond sales at its latest tender of De Beers, blaming continuing macroeconomic "challenges". De Beers sold just $80m of rough diamonds through Sightholder sales and auctions in its ninth sales cycle of the year, down from $200m at the previous tender and $454m in the ninth tender of 2022.

Pub operator JD Wetherspoon updated the market on the 14 weeks ended 5 November on Wednesday, showing strong performance with a 9.5% increase in like-for-like sales compared to the same period last year, driven by growth in bar, food, and fruit machine sales. Total sales for the year-to-date had grown by 8.1%. Additionally, the company made financial moves to optimise its financing and expanded its property portfolio by opening one pub at Heathrow Airport while selling four pubs and surrendering six leasehold pubs, maintaining a trading estate of 816 pubs.

Hiscox reported a 6.8% increase in group insurance contract written premiums (ICWP) in the first nine months of the year on Wednesday, to $3.76bn, driven by strategic capital deployment in London Market and Re & ILS. Net group ICWP rose by 11%, with significant growth in Re & ILS and London Market, and Hiscox Retail ICWP increased by 4.7%. Despite challenges in the US cyber market, the company said it expected a pickup in growth in the fourth quarter.