London pre-open: FTSE seen higher as Trump remains in focus

London stocks were set for a firmer open on Monday, taking their cue from a mostly positive session in Asia, with investors keeping an eye on the US as Donald Trump’s inaugural trip abroad gets underway.

The FTSE 100 was expected to open 22 points higher at 7,492.

CMC Markets analyst Michael Hewson said: “Since Donald Trump won the US Presidency in November, equity markets have made significant gains on the premise that his presidency would deliver a bonfire of red tape, significant tax reform and infrastructure spending. While we’ve certainly had a bonfire, it’s been one of negative headlines, own goals and political controversies, as the new President has lurched from one controversy to another.

“President Trump may well be out of the Washington firing line as he continues his nine-day tour which includes Saudi Arabia and Israel, before heading off to the EU, and meetings in Rome, Sicily and Brussels, but that doesn’t mean that events back in the US won’t affect investor sentiment while he’s away. Reports that he had told the Russian officials that the former FBI chief was a “nut-job”, and that dismissing him had relieved pressure on him, are being used as another example of the President’s propensity for questionable decision making.”

Meanwhile, oil prices were on the rise ahead of an OPEC meeting in Vienna on Thursday during which members will discuss the possible extension of their agreement to cut production by 1.8m barrels a day until mid-2017. West Texas Intermediate was up 0.8% to $51.09 a barrel and Brent crude was 0.7% higher at $54.01.

In corporate news, AstraZeneca has sold the European rights to a hypertension and angina treatment for a sum of $300m plus royalties and a percentage of sales.

The FTSE 100 drug group will manufacture and supply the medicines to Italian cardiovascular drugs specialist Recordati under a supply agreement, which will see Astra receive an initial double-digit percentage of sales.

Wood Group said it had signed a technical support services contract with Sakhalin Energy Investment Company, an operator of Sakhalin-2, one of the world’s largest integrated oil and gas projects, for an undisclosed sum.

The new contract adds brownfield drilling upgrade services to operations Wood Group already supplies.

Listed infrastructure investment firm HICL Infrastructure Company announced on Monday that it has completed the acquisition of a 36.6% equity interest in the various entities that comprise the Affinity Water Group, including the regulated entity, Affinity Water Limited.

The company had initially announced the details of the transaction on 2 May.

HICL also revealed it was in “advanced discussions” to sell down a £25m portion of the investment to a “small group of co-investors”, comprising UK local authority pension funds.

FTSE 250 inhaler maker Vectura is due to present positive outcomes of its Phase I clinical study on its VR942 inhaled asthma treatment at the American Thoracic Society’s annual conference later on Monday.

This follows the group's announcement in June last year that the study met its primary objective of evaluating the safety and tolerability of once-daily VR942 single or repeat doses, administered as a dry powder via inhalation, in healthy volunteers and mild asthmatics respectively.

There are no major UK data releases due.