London pre-open: Stocks seen muted as attention turns to Trump

London stocks were set for a muted open on Wednesday as investors awaited an announcement on tax reform from US President Donald Trump.

The FTSE 100 was expected to open three points higher at 7,278.

London Capital Group analyst Ipek Ozkardeskaya said: "All eyes are on the White House today, which is due to make the ‘big announcement’ on Donald Trump’s major tax reforms.

"We already know that he plans to dampen the corporate tax rate to 15% from 35%, the top income tax rate to 15% from 39.6%, and propose 10% increase on offshore earnings.

"What could go wrong? An announcement highlighting the tax cuts without mentioning how to finance the multi-billion dollar deficit it would add to the government’s budget, could dampen the mood. Therefore, it is worth mentioning that the downside risks on the stock markets prevail due to an eventual lack of details, as it has often been the case over the first 100 days of Trump’s presidency."

There are no major UK data releases due.

In corporate news, London Stock Exchange Group has got over its merger-that-never-was and made a strong start to the year, with sales growth across the group apart from capital markets was hit by lower trading levels than last year.

Total income from continuing operations in the three months ended 31 March was up 19% to £458.7m.

High-performance ingredient and technology speciality chemical company Croda International updated the market on its trading during the first quarter to 31 March.

The group said the improving sales trend seen in the fourth quarter of 2016 continued in Q1, with constant currency sales increasing by 4.9%, driven by strong organic growth

Reported currency sales increased by 19.1% to £365.5m, which the board said reflected sterling's continued weakness.

GKN had a good first quarter with organic sales growth, but the engineer warned that its growth rate may not be sustained for the full year due to tough comparators.

During the quarter, the FTSE 100 company achieved “good” organic sales growth as it benefited from currency translation, while the automotive market performed better than expected although growth in aerospace was “slightly” slower than it planned.