London pre-open: Stocks seen higher as focus remains on EU referendum

London stocks were seen opening in the black on Wednesday as investors continued to keep a close eye on EU referendum developments a day ahead of the vote.

The FTSE 100 was expected to open 30 points higher than Tuesday’s close at 6,256.

CMC Markets’ Michael Hewson said: “While the opinion polls continue to remain mixed with respect to the UK referendum, equity markets appear to be sailing on serenely as we lead up to tomorrow’s vote, and we mercifully enter the final day of campaigning.

“While stock markets continue look to another positive open the pound also managed to make a new multi month high against the US dollar, before slipping back a touch as some of the recent exuberance started to give way to a little bit of caution, and profit taking.”

There are no major UK data due, but in the US, existing home sales and consumer confidence are at 1500 BST.

On the corporate front, specialty chemicals company Elementis issued a profit warning ahead of its interim results on Wednesday, with sales in the chromium division failing to fire.

The FTSE 250 firm said that, as previously indicated, sales and contribution margins from the division in North America for the first six months of the year are expected to be similar to the prior year.

However, market conditions outside of North America were still challenging, its board said, with currency weakness against the US dollar - particularly in Eastern Europe.

“As a result, sales and margins outside of North America for the year as a whole are expected to be materially lower than the previous year,” Elementis said in a statement.

“Consequently, earnings per share for the year as a whole is expected to be below the range of market expectations.”

Department store group Debenhams saw like-for-like sales shrink in recent weeks and, while it warned that gross profit margins may be flatter than previously thought, full year profit is still on track to hit its target range.

Group like-for-like sales for the third quarter ending 11 June fell 0.2% and at constant currencies declined 1.6%.

Safestore said it had now satisfied conditions needed to buy fellow storage outfit Space Maker Stores Limited and completion of the acquisition is expected by 29 July 2016.

“The acquisition is expected to be immediately accretive to group earnings per share from completion and will support the group's future dividend capacity,” Safestore said.

An initial payment of £43m less certain downward adjustments to the enterprise value will be payable in cash on completion of the acquisition. Up to £1.4m of deferred consideration may become payable in cash between six months and three years from the date of completion, subject to the SMS business achieving certain performance targets during that period.