London pre-open: Stocks seen lower ahead of ECB rate announcement
London stocks were expected to open in the red as investors awaited the latest rate announcement from the European Central Bank.
The FTSE 100 was set to open 19 points lower than Wednesday’s close at 6,709.
The ECB decision is due at 1245 BST, with the press conference at 1330 BST.
CMC Markets’ Jasper Lawler said: “There is no real expectation of the ECB adding to measures only recently implemented at its meeting on Thursday. The euro has fallen and the German DAX has recovered most of its post-Brexit losses so there is no financial tightening for the ECB to combat. The central bank is likely to remain in wait-and-see mode.
“The key, as is mostly the case, will be in the words of President Mario Draghi. Markets are looking for Mr Draghi to give some indication that the ECB is willing to act in case Brexit begins to weighs on the Eurozone economy. Any sort of vaguely specific timeframe for new stimulus could see EUR/USD finally crack the 1.10 handle, but given the likely inaction, a short squeeze appears more likely.”
On the UK data calendar, retail sales are at 0930 BST. In the US, initial jobless claims and the Philadelphia Fed survey are at 1330 BST, while existing home sales and leading indicators are at 1500 BST.
In corporate news, megabrewer SABMiller announced on Thursday that the US Department of Justice has given its clearance on the company’s proposed combination with AB InBev.
The FTSE 100 firm said that as part of the consent decree, AB InBev has agreed among other conditions to divest SABMiller’s US interest in MillerCoors to Molson Coors.
It said the divestiture, which was previously announced between AB InBev and Molson Coors, is conditional on the successful closing of the combination of AB InBev and SABMiller.
The merger has now received approval in 21 jurisdictions.
SSE said the external operating environment continues to have an impact on the company, calling recent reforms imposed by the regulator as “considerable” that had to be implemented into a “fast changing energy supply market”.
It added that the outcome of the UK's referendum to leave the European Union “could lead to aspects of the financial, regulatory and political environment becoming more uncertain in the years ahead”.
“Energy flows across geographical borders and SSE believes that the UK's focus should be on competitively and cost-effectively maintaining security of supply and decarbonising the economy, supported by progressive market harmonisation,” SSE said.
“In its representations to governments, SSE will therefore make the case in this period for stability, market harmonisation and effective carbon pricing.”
Unilever maintained its underlying rate of sales growth at 4.7% in the second quarter but first-half turnover fell and the company said it was preparing for tougher market conditions as it sees no sign of an improving global economy.
Group sales decreased by 2.6% at current exchange rates but increased by 5.4% at constant exchange rates, with core earnings per share up 1.3% at current exchange rates and 7.5% at constant rates.