London pre-open: Stocks to pause after two days of gains

London stocks were set for a muted open on Wednesday after two days of solid gains.

The FTSE 100 was called to open five points lower at 7,335.

CMC Markets analyst Michael Hewson said: "This week’s price action so far has been a complete contrast to last week’s schizophrenic back and forth. The last two days have been ones of unbridled optimism that for all the concerns about Omicron, there is a growing hope that for all the concerns about its greater transmissibility, that any fallout is likely to be mild, and that when it comes to hospitalisations and deaths, the outcomes are likely to be better than Delta.

"The gains in equity markets we are seeing are all the more surprising given that they are coming against a backdrop of rising inflationary risk, and central banks that are likely to start withdrawing some of their monetary policy support in the weeks and months ahead.

"Today’s European open could well see a modest pause on a day that is fairly data light, and where the keynote number this week is on Friday with US CPI for November, which could see a big jump from the 6.2% in October to a number close to 7%."

In corporate news, miniature wargames manufacturer Games Workshop said pre-tax profits had slipped in the six months ended 28 November despite seeing sales moderately improve.

Games Workshop now anticipates interim sales to be no less than £190.0m, up from £186.8m at the same time a year ago as a result of growth in both its retail and trade channels, while pre-tax profits were pegged to be approximately £86.0m, down from £91.6m.

Travel company TUI lowered winter capacity plans due to the emergence of the Omicron coronavirus variant as it reported its first quarterly profit since the start of the pandemic.

The company said capacity would "likely" be modified towards the lower end of winter plans of between 60% - 80%. Core earnings for the final quarter came in at €160m.

Berkeley increased its guidance for the current year and beyond as the housebuilder reported a 26% increase in first-half profit fuelled by its investment in London and surrounding areas.

Pre-tax profit for the six months to the end of October rose to £290.7m from £230.8m a year earlier as revenue increased 36.3% to £1. 22bn.The FTSE 100 group raised its guidance for the year by 5% from an earlier forecast for profit little changed at about £518m.

Berkeley said it expected profit to increase by 5% over the next three years, resulting in pre-tax profit of about £625m for the year to the end of April 2025.