London pre-open: Stocks seen flat as election polls narrow

London stocks were set for a subdued open on Tuesday as investors looked ahead to a busy week that includes the general election on Thursday.

The FTSE 100 was expected to open unchanged at 7,525 as the latest poll from Survation for ITV out on Monday showed the Tories just one point ahead of Labour.

Oanda analyst Craig Erlam said: "The Conservative lead over Labour has collapsed, if the polls are to be believed, and it seems that the only thing that Theresa May currently has on her side now is time, with Labour still having a lot to do and only two days in which to achieve it. As it is, a working majority is now in doubt with another poll released overnight from Survation showing the lead at only a single point.

"The pound has not been too shaken by the polls in recent days though, having shown a certain vulnerability to them prior to that. Despite the lead closing and May’s majority looking under threat, the pound has continued to grind higher against the dollar and remain just below 1.30, and has held its own against both the euro and the yen. Whether this reflects a lack of faith in the polls or just those that point to a much tighter race isn’t clear but there doesn’t appear to be much election risk being priced in which in itself concerns me given what’s happened previously."

Investors will be digesting the latest figures from the British Retail Consortium and KPMG, which showed UK retail sales fell slightly in May, as a six-year low in non-food sales offset a strong month for supermarkets.

Sales increased by 0.4% on a like-for-like basis compared to the May last year, while total sales, which includes the effect of new shop openings, rose 0.2%, which was the lowest since January, excluding Easter distortions.

Non-food retailers endured their worst three months since May 2011, while sales decreased 0.3% on a like-for-like basis and were up 0.1% on a total basis.

On the upside, food sales were up 3.2% on a like-for-like basis and 4.3% on a total basis over the three months to May, which was the strongest since February 2012.

In corporate news, full year revenues at online electrical retailer AO World increased 17% to £701m as its UK and Continental European businesses grew sales.

Group adjusted losses before interest, tax, depreciation and amortisation were cut 46.2% to £2.1m.

Having spoken to other shareholders after private equity groups Pollen Street Capital and BC Partners improved their takeover offer by 10p, Shawbrook's board of directors has again rejected the deal.

The challenger bank's independent directors believe that the offer continued to undervalue Shawbrook and its prospects "and therefore advise that shareholders take no action".

Temporary power specialist Aggreko announced that after 13 years with the FTSE 250 business - three of which as chief financial officer - Carole Cran had tendered her to enable her to take up a new role as CFO of Forth Ports, an infrastructure funds-owned company headquartered in Scotland.