London pre-open: Stocks seen little changed ahead of US election

Stocks in London were set to open broadly flat on Tuesday, with investors likely to err on the side of caution ahead of the US presidential election, amid cautious optimism that Clinton will win.

The FTSE 100 was called to open five points higher than Monday’s close at 6,812.

CMC Markets’ Michael Hewson said: “Whichever way the result goes there is one inescapable fact that investors surely cannot ignore. Even if Donald Trump loses, the political narrative in the US has changed irrevocably and probably not for the better, as any new President will have to preside over a nation more divided than ever, and that could make any new government policies, whoever is elected, much less business and free trade friendly.

“Of more importance of who becomes President will be the makeup of the respective houses and if the Republicans maintain their blocking majorities then Mrs Clinton could well find out that her ability to do anything will be constrained in the same way President Obama’s has been over the past few years.”

Although the election is the main focus, Chinese data released earlier may also garner some attention. Exports fell 7.3% in October from a year earlier, according to the General Administration of Customs, following a 10% drop in September. Meanwhile, imports were down 1.4% compared to a 1.9% drop in September. Analysts had been expecting a 6% fall in exports and a 1% decline in imports.

On the UK data calendar, industrial and manufacturing production figures are due at 0930 GMT.

In corporate news, Marks & Spencer held its interim dividend as first-half profits fell almost 19%, with new chief executive Steve Rowe announcing a £350m investment plan to close 113 stores in the UK and overseas markets to try and return the retailer to profitable growth.

Revenue in the 26 weeks to 1 October of £4.99bn was down 0.9% on the equivalent period last year, but underlying pre-tax profit was down 18.6% to £231.3m due to lower Clothing & Home sales.

Direct Line Group posted a trading update for the nine months to 30 September on Tuesday, with gross written premium for ongoing operations 4.2% higher, and the company claiming continued growth in Motor own brands, up 9.7%.

The FTSE 100 firm said motor and home own brands in-force policies were up 4.3% year-on-year, with strong customer retention and continued growth in Green Flag direct and Direct Line for Business.

Its total costs of £669.5m were £16.1m higher than the first nine months of 2015, after absorbing £24m of Flood Re costs in Q2 2016.

Associated British Foods reported a rise in full year revenue as it expanded the selling space of discount clothing retailer Primark, while it was affected by the weak value of sterling.

Revenue grew 5% for the year ended 17 September to £13.4bn, compared to last year, or 4% on a constant currency basis.