London pre-open: Stocks seen lower after Renzi defeat
Stocks in London were set to open in the red on Monday as Italian Prime Minister Matteo Renzi resigned after he conceded defeat in a constitutional referendum, with investors concerned about the political and economic instability that might ensue.
The FTSE 100 was called to open 41 points lower than Friday’s close at 6,690.
Oanda’s Craig Erlam said: “Another bad night for the European project on Sunday saw Matteo Renzi’s constitutional reforms rejected by a large margin, a vote that will bring an end to his tenure as Prime Minister and open the door to populist anti-eurozone party, Five Star Movement.
“The loss itself won’t come as a massive surprise given the polling numbers prior to the vote, but the scale of the loss is certainly a concern. In making this a vote on himself, Renzi gambled his political future on the hope that his popularity would see the referendum through but instead, he just became the latest casualty in a series of votes that has paved the way for anti-establishment movements to come to the fore.”
The euro fell to a 20-month low against the dollar on the news, but Erlam said the moves were actually quite well contained considering what the vote could mean for the single currency.
On the data front, the UK services purchasing managers’ index is at 0930 GMT, while in the US, ISM non-manufacturing is at 1500 GMT.
In corporate news, AstraZeneca has completed the sale of rights to its nasal spray outside of the US with Swiss pharmaceutical Cilag for $330m.
The FTSE 100 company sold the rights for Rhinocort Aqua, a nasal spray to treat allergic and nonallergic rhinitis and polyps, for use outside of the US to a subsidiary of Johnson & Johnson.
Global specialist healthcare company BTG announced the inclusion of treatment with its PneumRx Coils product in guidelines for the management of chronic obstructive pulmonary disease on Monday, as published by the Global Initiative for Chronic Obstructive Lung Disease (GOLD).
The FTSE 250 firm also said that at the same time, the French Ministry of Health published its positive recommendations regarding PneumRx Coils on its website.
Royal Bank of Scotland said it had agreed payouts to some shareholders to settle allegations that it misled them ahead of a £12bn rescue rights issue in 2008 at the outbreak of the financial crisis.
RBS said it had concluded “a full and final settlement with three out of the five shareholder groups representing 77% of the claims by value”.
“In total, RBS is willing to make available settlement sums of up to £800m assuming settlement of all claims, to be split among all five shareholder groups, subject to agreement and claim validation,” RBS said in a statement.