London pre-open: Stocks seen higher on dovish Brainard

London stocks were set to open higher on Tuesday, rebounding from the previous session’s losses and taking their cue from a positive close on Wall Street following dovish comments from Federal Reserve governor Lael Brainard.

The FTSE 100 was expected to open 31 points higher at 6,732.

CMC Markets’ Michael Hewson said: “Despite all the recent softness in both stock and bond markets in recent days over concern about a more hawkish Federal Reserve the fact remains that a Fed rate rise this month still remains a fairly low 22% probability.

“Though yesterday’s decline in European markets may have been a direct result of Friday’s sharp US selloff, today’s higher European open is set to come about as a result of last night’s sharp rebound in US markets after permanent Fed member Lael Brainard reinforced earlier comments from non-voting member, and Minneapolis Fed President Neal Kashkari that there was no rush to move ahead on raising rates, pulling US stocks sharply off their intraday lows.

“Inflationary pressure that continues to remain benign, set against a backdrop of slowing ISM data and continued global uncertainty ‘counsels prudence in the removal of policy accommodation’ she warned, as the central bank went into its black out period ahead of next week’s policy meeting.”

On the data front, UK CPI, RPI and PPI are all due at 0930 BST.

In corporate news, internet and telephone based insurer Esure plans to demerge financial services comparison website Gocompare.com from the company.

The FTSE 250 company said the demerger has the potential to enhance business growth, performance and shareholder value for the website, after a strategic review.

Ocado claimed its best quarterly volume growth in four years, although a slight acceleration in group revenue growth in the third quarter thanks to the Morrisons deal masked a sight slowdown in own-brand sales.

Average order size also continued its decline and there remained "sustained and continuing margin pressure", said chief executive Tim Steiner.

Sports, fashion and outdoor brand retailer JD Sports Fashion posted its interim results for the 26 weeks to 30 July on Tuesday, with revenue up 20% to £970.57m compared to the first half of last year.

The firm reported a gross profit margin of 48.1%, ahead of the 47.4% margin last year, with operating profit before exceptional items improving 63% to £77.65m.

Profit before tax rose 73% to £77.41m, with basic earnings per ordinary share 69% higher than a year ago at 29.83p.

JD’s board declared an interim dividend of 1.25p per share, just ahead of the 1.2p payout announced at the 2015 interim results.