London pre-open: Stocks seen flat as investors continue to digest Italy vote

Stocks in London were set to open broadly flat on Tuesday as investors continue to mull over the implications of the Italian referendum and Prime Minister Renzi’s resignation.

The FTSE 100 was called to open four points lower than Monday’s close at 6,742.

Michael Hewson, chief market analyst at CMC Markets, said that while the outcome of the Italian referendum vote wasn’t too much of a surprise it does still tap into a familiar theme of rising dissatisfaction among voters towards politicians who appear detached from the people they are supposed to serve.

“In any event Italy’s problems are no more or less serious with Renzi’s departure than they were beforehand, in fact they won’t make the difficult decisions that need taking any easier to take in the context of sorting out Italy’s sclerotic banking sector.

“Any new government technocratic or otherwise is still faced with the unenviable task of either bailing in the Italian banking sector and wiping out a wave of Italian pensioners and savers, or defying Brussels and trying to bail the banks out with taxpayer’s money in contravention of new rules to protect taxpayers.”

There are no major UK data releases due, but in the US, trade balance and non-farm productivity are at 1330 GMT, while factory orders and durable goods orders are at 1500 GMT.

In corporate news, Wolseley, a distributor of plumbing and heating products, reported a rise in first quarter revenue, including increased revenue from the US, but markets in the UK and the Nordic region were “challenging”.

During the quarter ended 31 October, the company generated revenue of £4.36bn, 5.2% ahead of last year at constant exchange rates and 1.8% higher on a like-for-like basis, including 1.3% price deflation.

As growth at both of Ashtead's UK and US divisions has been humming along as fast as could be expected and after the pound's collapse, the plant hire group said it now expects full year results will exceed its original targets.

Rental revenue in the six months to 31 October grew 13% on last year to £1.45bn, pre-tax profit by 9% to £425.9m and the interim dividend was hoisted 19% to 4.75p per share.

Low-cost carrier easyJet posted its passenger statistics for November on Tuesday, with total passengers for the month improving 2.9% to 4,947,060 year-on-year, although load factor dropped 0.6 percentage points to 89.7%.

The FTSE 100 airline carried a total of 73,720,867 passengers in the rolling 12 months to the end of November, a 5.9% improvement, though load factor also dropped over the same period, by 0.5 percentage points to 91.3%.