London pre-open: Stocks seen lower as focus turns to May
London stocks were expected to open lower on Wednesday despite positive Asian and US sessions, as Theresa May was set to become Prime Minister.
The FTSE 100 was expected to open 25 points lower than Tuesday’s close at 6,655.
CMC Markets’ Michael Hewson pointed out that the pound had it best day in weeks on Tuesday as markets cheered the prospect of some form of certainty at the top of government.
“This new found stability may also have tempered some of the prospect of an imminent rate cut at tomorrow’s Bank of England rate meeting, given that credit conditions are significantly easier than they were three weeks ago, due to the relaxing of banks capital buffer requirements and the up to £250bn of available extra liquidity that can be called upon if required at the various liquidity auctions.”
On the data front, the Bank of England credit conditions survey is at 0930 BST, eurozone industrial production is at 1000 BST and the US import price index is at 1330 BST.
House builder Barratt said full year profit before tax was to increase by around 20% to £680m, in line with market expectations.Total completions, including joint ventures, increased by 5.3% to 17,319, as a result of strong consumer demand during the financial year
It added that was too early to say what the impact of the uncertainty facing the UK economy will be post the Brexit vote.
Declines across all three of Burberry's regions led to a 3% like-for-like drop in retail sales in the first quarter, the luxury retailer said, warning that its markets remain challenging and that its wholesale outlook has become more cautious for both the first and second halves.
Burberry said it still expected low single-digit percentage growth in total retail revenue for the full year, but said it expects first-half wholesale revenue to be down by over 10%. Directors also calculated that there would be a £90m benefit from currency rates if they remain at current levels.
Pharmaceutical giant AstraZeneca announced on Wednesday that it has entered into an agreement with Sandoz and its affiliates to resolve litigation relating to Faslodex (fulvestrant).
The FTSE 100 firm said the litigation related to Sandoz’s generic fulvestrant product, for which it is seeking FDA approval.
“The US Faslodex patents in question are due to expire in January 2021, with paediatric exclusivity continuing until July 2021,” AstraZeneca’s board said in a statement.
“On 12 July 2016, the United States District Court for the District of New Jersey entered a consent judgment filed by AstraZeneca and Sandoz, which includes an injunction preventing Sandoz from launching a generic fulvestrant product until 25 March 2019, or earlier in some circumstances.”