London pre-open: Stocks seen higher with pound in focus

London stocks were set for a firmer open on Thursday, with the focus still very much on the pound as investors grow nervous ahead of the 8 June election.

The FTSE 100 was expected to open 12 points higher at 7,532.

Oanda analyst Craig Erlam said: "Sterling is likely to remain volatile over the next week as we approach the election on 8 June. Recent polls have shown that Theresa May’s lead has narrowed, in some cases quite considerably, which has sent the pound into a bit of a tailspin at times. The polls can be inconsistent at times though, as seen yesterday with the YouGov and Panelbase polls predicting very different outcomes, but the trend does appear to be one of May’s lead shortening. It may be worth remembering though that these same polls also underestimated the Conservative lead only two years ago."

Oil is also expected to be watched ahead of the EIA crude oil stocks data at 1600 BST. "The release comes as oil continues to trade under pressure, despite last week’s agreement to extend the cuts by another nine months, and after API reported a substantial drawdown on Wednesday," said Erlam.

Investors will also be digesting the latest survey from Nationwide, which showed UK house prices fell for the third month in a row in May, the first time this has happened since 2009.

As month-on-month prices fell 0.2% this dragged annual house price growth down to 2.1% in May from 2.6% in April.

The average price of a home slipped to £208,711 in May from £207,699 a month ago.

“It is still early days, but this provides further evidence that the housing market is losing momentum," said Robert Gardner, Nationwide's chief economist.

"Moreover, this may be indicative of a wider slowdown in the household sector, though data continues to send mixed signals in this regard."

Still to come, Markit's manufacturing PMI is at 0930 BST.

On the corporate front, Johnson Matthey posted solid growth in sales and profits for the year to 31 March, with revenue up 12% and profit before tax up 19%, helped by a big currency benefit.

The chemicals group recommended a final dividend per share of 54.5p, that lifted the full year payout to 75p, a 5% annual increase that the company said reflected confidence in its medium term prospects.

Passenger transport operator FirstGroup published its preliminary results for the year to 31 March, with revenue rising 8.3% to £5.65bn and operating profit up 12.7% at £339m.

The FTSE 250 company’s profit before tax was 23% higher at £207m, while earnings per share improved 20.4% to 12.4p.

Its debt pile shrunk during the year as well, with net debt reducing 8.5% to £1.29bn at year end.

Polymetal increased its stake in the Dolinnoye gold property, acquiring another 25% interest for $1.6m. The transaction is designed to further strengthen the company's Varvara hub concept. Located in the Aktogay district of Kazhakstan, the Dolinnoye deposit was expected to become another source of high-grade free-milling feedstock for the Varvara processing plant.