London pre-open: Stocks seen higher after Tuesday's losses; jobs data eyed

Stocks in London were set for a firmer open on Wednesday following heavy losses in the previous session on the back of Prime Minister Theresa May’s Brexit speech, with the pound likely to be in focus again.

The FTSE 100 was called to open 22 points higher than Tuesday’s close at 7,242.

CMC Markets’ Michael Hewson said: “Yesterday’s speech by UK Prime Minister Theresa May may not have pleased everybody, indeed it didn’t take too long before it was receiving criticism for being a “theft of democracy” but it certainly had an unexpected effect on the currency markets, sending the pound up sharply, as it posted its biggest one day rise since 2008.

“Having been told ad nauseam for months that the prospect of a so called hard Brexit/clean Brexit would send the pound even further down, this reaction was an unexpected outcome, however given that immigration was always likely to be a red line, this was realistically the only option open to the Prime Minister, something that markets have had more than enough time to price in.”

On the data front, investors will turn their attention to the UK claimant count, unemployment rate and average earnings at 0930 GMT. In the US, the consumer price index is at 1330 GMT and the NAHB housing market index is at 1500 GMT.

In corporate news, Pearson expects to report full year profit and earnings in line with forecasts, but also expects a reduction in revenue due to a decline in the North American higher education market as it aims to accelerate its digital transition in order to manage a fall in print.

Adjusted operating profit and adjusted earnings per share for the year ended 31 December 2016, are expected to be about £630m and 57p, respectively, with revenues down about 8% primarily due to the weakness in North American higher education courseware.

Boosted by a return to growth for the Asia Pacific region but with the Americas still in decline, Burberry's underlying retail sales grew 4% in the third quarter.

In the three months ending December, the fashion retailer made revenues of £735m that were 22% higher than the same period last year thanks to the significant currency shifts, with like-for-like sales up 3%.

Vodafone announced that it and TDC Group have agreed to renew their strategic partnership for Denmark and Norway, building on a successful fifteen-year relationship that began in 2001.

The FTSE 100 mobile network operator said under the renewal, which commenced on 1 January, TDC's mobile customers will continue to benefit from mobile voice and data roaming, including high-speed data on Vodafone's 4G networks.