London pre-open: Stocks seen a little higher as referendum gets underway
London stocks were seen opening a little firmer on Thursday as Britons start heading out to the polling stations to vote on the UK’s EU membership.
The FTSE 100 was expected to open 19 points higher than Wednesday’s close at 6,280.
“The general consensus is that traders are likely to press the sell button if the UK makes the mistake of leaving the EU,” said Naeem Aslam, chief market analyst at Think Forex. “So far, the Remain side is in the lead and the bookies are showing that there is a 70% chance that the UK will remain in the EU. These odds have seen the British pound performing well and surging over the last few days. The target of 1.50 against the dollar is easily approachable if they vote to remain in the EU.”
On the data front, there are no major UK releases, but US initial jobless claims are at 1330 BST, US Markit PMI manufacturing is at 1445 BST and leading indicators and new home sales are at 1500 BST.
In corporate news, pharmaceutical giant AstraZeneca confirmed disappointing news to investors on Thursday, with updated guidance from US regulators recommending against its FluMist Quadrivalent influenza vaccine.
The FTSE 100 firm said the updated guidance from the Advisory Committee on Immunization Practices at the Centers for Disease Control and Prevention has recommended against FluMist for the 2016-2017 flu season.
It was based on CDC vaccine effectiveness data from the last three flu seasons in the US, which indicated FluMist did not demonstrate statistically significant effectiveness in children aged between two and 17.
Meggitt said its safety systems unit has won a five-year indefinite-delivery/indefinite-quantity contract worth up to $21m for the two-place seat canopy actuator on the F16 fighter jet from the US Defense Logistics Agency.
Some 550 dual seat F-16 aircraft are in line for canopy actuator replacements over the next five years, Meggitt said, adding that all but the initial contract worth $2.1m will be available for procurement by the US Air Force and Foreign Military Sales.
First-quarter results from Tesco confirmed sales growth continued for the second successive period, while chief executive Dave Lewis revealed plans to sell the Harris + Hoole coffee shop chain to Caffè Nero.
Tesco recorded like-for-like sales growth of 0.9% in the 13 weeks to 28 May, with LFL sales up 0.3% in the UK and 3% for the international business. The market was expecting UK LFLs growth of 0.2% after the 0.9% growth in the fourth quarter of the last financial year.
Including a small contribution from new store openings, total sales grew by 1.1% at constant rates.