London pre-open: Stocks seen higher as Johnson heads to Brussels

London stocks were set to rise on Wednesday as Prime Minister Boris Johnson heads to Brussels for Brexit talks with European Commission President Ursula Von Der Leyen.

The FTSE 100 was called to open 30 points higher at 6,588.

CMC Markets analyst Michael Hewson said: "This evening Prime Minister Boris Johnson is due to have dinner with EU Commission President Ursula Von Der Leyen, to try and put the talks back on track, after they suddenly came off the rails at the end of last week.

"The hope is that the two of them can push back against the more hawkish voices amongst some in the EU who mistakenly think that somehow a no deal outcome is even an option to be contemplated.

"Even without the coronavirus pandemic a ‘no deal’ outcome would have been a risky strategy on the part of EU leaders, particularly given the current fiscal impasse on the aid package already under consideration. The EU can ill afford another economic dislocation caused by a no deal Brexit, on top of the economic devastation being wrought by Covid-19, despite all their bluster.

"Perhaps the calculation is that the UK will back down and fold, however if the PM were to do that there is no guarantee he would be able to sell the sort of compromise that would be acceptable to the EU to the more recalcitrant parts of his party. If a deal is to be struck then it is more than likely that no one will be happy.

"What is required in the next few hours is less pig headedness and more pragmatism on the part of all parties. There will be no winners from a no deal outcome, whatever either side might tell you. If anything a no deal would be a kind of mutually assured destruction."

In corporate news, security firm G4S rejected an increased offer from Canada’s GardaWorld, just hours after accepting a rival higher bid from US firm Allied Universal.

GardaWorld last week increased its offer to 235p a share from 190p. G4S on Tuesday night said it agreed to recommend a 245p-a-share bid from Allied that values the company at around £3.8bn.