London pre-open: Stocks set for muted start

Stocks in London were set for a muted start on Wednesday as investors continued to keep an eye on any developments at the OPEC meeting in Algeria.

The FTSE 100 was called to open two points higher than Tuesday’s close at 6,809.

Michael Hewson, chief market analyst at CMC Markets, said: “An agreement at today’s meeting was always an unlikely prospect in any case simply because for most of this year the Iranian line has been quite consistent in that they would only look at the prospect once oil production had got back to pre-sanction levels of 4m barrels a day. This was a view stated by Iranian oil minister Bijan Zanganeh as far back as March. With oil production in August at 3.6m barrels it is clear that Iran is still short of that and could well look to overshoot that number before considering the prospect again.”

There are no major UK data releases due. In the US, MBA mortgage applications are at 1200 BST and durable goods orders are at 1330 BST. Investors will also be eyeing a testimony by Federal Reserve Chair Janet Yellen to the financial services committee on Capitol Hill, particularly following last week’s rate announcement.

In corporate news, Royal Bank of Scotland agreed to pay $1.1bn (£846) to settle two legal claims that it allegedly mis-sold mortgage securities in the run-up to the 2008 financial crisis.

The settlements, involving its subsidiary RBS Securities, are with the National Credit Union Administration Board, which regulates credit unions, but does not include lawsuits with the US Department of Justice and the Federal Housing Finance agency.

Trading at TUI was in-line with the company´s expectations, the travel operator said in a pre-close trading update. For the year to 18 September, the tourism group reported a 1% year-on-year increase in total revenues, alongside flat average selling prices.

Management expressed confidence in its ability to deliver full-year underlying growth in earnings before interest, taxes, depreciation and amortisation of between 12% and 13%. Results for the full-year were scheduled to be released on 8 December.

Sainsbury blamed food deflation for a fall in like-for-like sales in the second quarter, masking the growth in transactions and volumes in the period.

Total retail sales fell 0.4% in the 16 weeks to 24 September, including the completion of the Argos acquisition on the second of the month, with like-for-like retail sales down 1.1%.

Smiths Group reported a drop in profits for the year to the end of July as its John Crane division suffered on the back of tough conditions in the global energy market.

The company said it expects a broad continuation of the trends experienced in 2016, with ongoing challenges in John Crane’s end markets offset by moderate underlying revenue growth in its other divisions.