London pre-open: Stocks seen lower as Trump takes office

London stocks looked set for a weaker open on the first day of trading since Donald Trump took office.

The FTSE 100 was expected to open 28 points lower than Friday’s close at 7,170.

CMC Markets’ Michael Hewson said: “While President Donald Trump’s inauguration speech received a lot of attention due to its introspective and protectionist nature, the reaction of US stock markets was pretty sanguine in spite of all the criticism of the tone of the speech.

“Whether that remains the case remains to be seen, as markets get a better feel of what type of President he intends on being. It could be argued that Friday’s speech may well have been aimed at a more domestic audience, while economic realities further down the line might dictate a more nuanced approach to policy, however that remains to be seen, and trying to second guess it would be a mistake.

“Weekend pronouncements on renegotiating the North American Free Trade Agreement (NAFTA), the withdrawal from the Trans Pacific Partnership (TPP) are likely to be the first of many policy announcements with more set to come if Friday’s speech is any guide.”

In corporate news, Paddy Power Betfair said it would not hit its top-end targets after Donald Trump's unexpected US election win and several other punter-friendly sporting results at the end of the year cost it around £40m.

However, the FTSE 100 group said it still expected to make underlying earnings before interest, tax, depreciation and amortisation around the mid-point of its November guidance of £390-405m.

Essentra, a maker of cigarette filters and plastic packaging, warned that it expects profit will be below expectations to a due to a more challenging than previously anticipated Health & Personal Care Packaging unit, which has been experiencing operational issues

The FTSE 250 company said that due to continuing operational issues in the Health & Personal Care Packaging unit, there was a further “significant” decline in revenue and profitability during the last two months of 2016, and there is no expectation of a near-term improvement in 2017.

Petra Diamonds posted its unaudited trading update for the six months to 31 December on Monday reporting a production increase of 24% to 2,015,087 carats.

The FTSE 250 company put the improvement down to an increased contribution from undiluted return-of-mine ore leading to improved return-of-mine grades, and additional tailings production from Kimberley Ekapa Mining;

It said it remains on track to deliver full year production of between 4.4 and 4.6 million carats.

There are no major UK data releases due.