London pre-open: Stocks called higher but trade seen quiet due to US holiday

Stocks in London were expected to open a little higher on Monday, taking their cue from a positive session in Asia.

London’s FTSE 100 was set to open 23 points higher than Friday’s close at 6,600.

Michael Hewson, chief market analyst at CMC Markets, said; “With US markets closed today for the 4th July Independence Day holiday European markets may well be quieter than usual, though they will be no less driven by the expectations of lower for longer interest rates in light of the events of recent days.

“The main focus this week away from Brexit concerns given that the triggering of article 50 seems some way off is likely to be on the latest US economic data towards the end of the week, the latest FOMC minutes and the latest US payrolls report, given the shocker of a report we saw in May.”

Stocks got a boost at the end of last week after Bank of England governor Mark Carney said the central bank was likely to cut interest rates over the summer.

On the macroeconomic front on Monday, UK construction PMI for June is at 0930 BST. Hewson expects to see a decline to 50.6 from 51.2 mainly on the back of pre-Brexit uncertainty. “The recent weakness in this sector in recent months could also account for why investors sold off the housebuilders so aggressively in the wake of last month’s Brexit vote,” he said.

In corporate news, HSBC confirmed the completion of the sale of its Brazil business on Monday, after announcing on 8 June that it had received all necessary regulatory approvals for the transaction.

The bank had put HSBC Brazil on the market as part of its efforts to streamline the global business, accepting an offer from Banco Bradesco.

“The sale of HSBC Brazil represents a significant step in HSBC's stated goal to optimise its global network and reduce complexity,” the board said in the announcement.

HSBC previously confirmed the deal was worth $5.2bn in an all-cash transaction.

Capita announced the appointment of Ian Powell as a non-executive director and chairman designate on Monday, taking effect from 1 September.

The FTSE 100 firm said Powell would officially succeed Martin Bolland as non-executive chairman on 1 January 2017.

Until the end of June, Ian Powell was chairman and senior partner of PricewaterhouseCoopers UK.

Conditions in the offshore industry remain depressed, reflecting global economic uncertainty, which will see profits for 2016 come in "materially lower" than in the full-year 2015, Clarkson said in a trading update.

However, overall transaction volumes within the broking division continued to grow, albeit alongside declining activity in the financial division. The shipbroker referenced the sharp fall seen in the Baltic Dry Index to all-time during the first quarter of the year.

Property investment company Kennedy Wilson Europe said it has achieved a major milestone at its Baggot Plaza, Dublin project, reaching practical completion and handing the building over to the governor and company of the Bank of Ireland.

The FTSE 250 firm entered into an agreement for lease with the Bank of Ireland in May 2015, for a 25-year lease of the entire building at a headline rent of €47.50 per square foot.