London pre-open: Stocks to edge up ahead of US inflation

London stocks were set to edge up at the open on Wednesday as investors eye the latest US inflation reading.

The FTSE 100 was called to open nine points higher at 7,170.

CMC Markets analyst Michael Hewson said: "While the Nasdaq finished lower the Dow and S&P500 both closed at new record highs, in the aftermath of the passing of the new infrastructure bill through the Senate, with Asia markets continuing the resilient tone with a similarly positive session.

"As we look towards today’s European open there is an expectation of a similarly positive bias as we look towards this afternoon’s US CPI numbers.

"The temperature in the US economy went up a notch in the most recent June CPI numbers, as headline inflation saw another big increase, rising to 5.4%, with core prices rising to 4.5%, the highest level since 1991, largely driven by another 10.5% rise in used car prices, which have remained resilient over the last couple of months.

"We also saw a 1.5% increase in energy prices while food and rent inflation also rose more than expected. PPI prices also saw a big increase in June, which if recent trends are any guide could trickle up into today’s July CPI numbers, even though expectations are for a slight decline."

In corporate news, Admiral Insurance shareholders are set to cash in as the company on Wednesday paid an increased interim dividend and extra payouts after the sale of its Penguin Portals business.

The board has declared an interim dividend of 115p a share, made up of a normal dividend of 87.9p and special dividend of 27.1p, up 63% year on year. It also declared a further special dividend of 46p as part of the phased return of proceeds from the Penguin Portals comparison businesses.

Group profits surged by 76% to £482.2m as the company paid out less in motor claims due to fewer people driving during the Covid-19 pandemic. The insurer was able to release reserves set aside for payouts to customers.

Results were also out from the likes of Spirax-Sarco, Phoenix Group, Avast and Quilter, among others.