London pre-open: Stocks to fall as sterling rallies

London stocks were set to fall at the open on Tuesday as sterling gains ground against the dollar after Prime Minister Boris Johnson said that the lifting of Covid restrictions will go ahead on 19 July.

The FTSE 100 was called to open down 12 points at 7,153.

At 0730 BST, the pound was up 0.3% versus the dollar at 1.3891. A firmer pound tends to dent the top-flight index, as around 70% of its constituents derive most of their earnings from overseas.

At a press conference on Monday, Johnson said England would go ahead with the lifting of coronavirus restrictions on 19 July, as planned, with face masks, social distancing and limits on gatherings set to be scrapped. Nightclubs will be able to reopen for the first time since pandemic restrictions kicked in, while table service and test and trace QR sign-ins will no longer be mandatory in bars and restaurants. In addition, there will no longer be limits on the number of visitors a care home resident can have.

"If we can't reopen our society in the next few weeks, when we will be helped by the arrival of summer and by the school holidays, then we must ask ourselves when will we be able to return to normal?" Johnson said.

"To those who say we should delay again - the alternative to that is to open up in winter when the virus will have an advantage, or not at all this year."

In corporate news, Sainsbury's said sales beat expectations in the first 16 weeks of 2021 as price cuts helped it outperform rivals in the grocery market.

Total sales rose 1.6% in the 16 weeks to 26 June as like-for-like sales excluding fuel also rose 1.6%. Sainsbury's said it expected annual underlying pre-tax profit of at least £660m with progress weighted towards the first half. Equivalent profit was £356m last year.