London pre-open: Stocks seen flat ahead of inflation data; Fed eyed

Stocks in London were set to open little changed on Tuesday ahead of UK inflation data and as the Federal Reserve kicks off its two-day policy meeting.

The FTSE 100 was called to open just two points higher than Monday’s close at 6,892.

On the data front, the UK consumer price index, retail price index and producer price index are at 0930 GMT.

CMC Markets’ Michael Hewson said: “UK gilt markets have already sold off sharply on the basis of higher inflation expectations with the 10 year yield hitting its highest level since April this year at 1.509% yesterday, over 100 basis points above its recent low at 0.501% in August.

“Today’s inflation numbers could well complicate that narrative further, if as expected the numbers come in hotter than expected. In October we saw a surprising dip back in CPI to 0.9%, however that is expected to be temporary as the effects of lower oil prices continue to drop out of the annual numbers. An increase to 1.1% is expected in today’s CPI November numbers, which would be the highest level since October 2014, and a big jump from the -0.1% that we saw just over a year.”

As far as the Fed is concerned, markets are largely pricing in a 25 basis points hike to interest rates.

In a short trading statement, infrastructure construction group Balfour Beatty said it expected to finish the year with a positive cash balance as it completes the first phase of chief executive Leo Quinn's two-year turnaround process.

By year end, the FTSE 250 group said it would complete the target of bringing £200m cash in and taking £100m of costs out, while managing the process of unprofitable legacy contracts was "proceeding to timetable".

UBM has agreed to buy privately-owned Asian exhibitions company Allworld Exhibitions for a cash consideration that values the business at $485m on a debt and cash free basis.

In the 12 months to the end of June, Allworld – which operates 51 tradeshows in 11 countries across nine sectors – generated revenues of $97.2m and earnings before interest, taxes, depreciation and amortisation of $37.6m.

Georgia-focused investment company BGEO Group announced on Tuesday that its banking subsidiary, JSC Bank of Georgia, has agreed to acquire a micro and small business portfolio from JSC ProCredit Bank Georgia for cash.

The FTSE 250 firm said ProCredit Bank is currently the third largest bank in Georgia by total assets and market share of gross loans.

It said the transaction will add around 2,400 micro and small business clients and a net value of GEL 120m to BOG's retail banking loan portfolio.

Old Mutual’s asset management business is to float on the London Stock Exchange with an offering of 13m shares and the equity raised will be used for “general corporate purposes”.

On Monday, the asset management business also agreed to repurchase 6m shares from Old Mutual Group.