London pre-open: Stocks seen higher on positive Wall St cues, US inflation eyed

London stocks were set for a firmer open on Wednesday following another positive close on Wall Street, as investors looked ahead to key US inflation figures.

The FTSE 100 was called to open 32 points higher at 7,200.

CMC Markets analyst Michael Hewson said: "If investors were concerned about the rapid return of inflation yesterday’s market price action certainly didn’t reflect that, as European investors adopted a fairly low risk approach after two day days of gains with some modest profit taking.

"US markets also opened on the back foot but gained confidence in the afternoon session on the back of comments from new Fed chair Jerome Powell who stated that the central bank would remain alert to any financial stability risks. This helped US markets finish the day in positive territory for the third day in succession though the gains were fairly modest in comparison to the previous few days."

There are no major UK data releases due, but eyes will be on the US, where the consumer price index for January is out at 1330 GMT, along with retail sales.

Hewson said: "Today’s US CPI inflation report has taken on an importance all of its own in the wake of the recently strong wages numbers, never mind the fact that the Fed doesn’t even use CPI to target inflation.

"Nonetheless this renewed focus on inflation, not only in the US but more globally has raised concerns that central banks may well be behind the curve when it comes to assessing the outlook for the next few months."

In corporate news, Coca Cola HBC reported full year earnings before interest and tax (EBIT) of €621m, a rise of 20% on net sales revenue of £6.5bn, up 4.9%.

“Strong in-market execution, supported by an improving economic environment, resulted in excellent top-line growth and margin expansion in 2017. We are particularly pleased to have achieved revenue growth through a balanced delivery of both volume and price/mix,” the company said.

Galliford Try has announced it will go cap in hand to investors to cover the impact on the group from the wind-down of Carillion through its joint-venture with the firm and Balfour Beatty on the Aberdeen Western Peripheral Route contract. That is expected to boost the group's total cash commitment for that project by over £150m.

However, the raising had already been fully underwritten by HSBC and Peel Hunt. The announcement came alongside the firm's latest interims and a decision to pay out a dividend of 28p for the six months to 31 December, versus 32p in the first half of 2017.

Serco Group updated the market on its planned acquisition of a portfolio of selected UK health facilities management contracts from certain subsidiaries of Carillion, reporting that a revised business purchase agreement had now been signed with the special managers and provisional liquidators acting on behalf of the relevant Carillion divisions.

The FTSE 250 company said the agreement covered “substantially” all of the assets that were the subject of the previous agreement. Upon the receipt by the special managers and provisional liquidators of the requisite third-party consents, each individual contract will be transferred to Serco on a cash-free, debt free basis, with the consideration to be paid in instalments and to be satisfied using Serco's existing financing facilities.

Sirius Minerals has entered into a design and build contract with shaft sinking and mining contractor DMC Mining Services for the construction of the four shafts required for its polyhalite project in North Yorkshire.

Managing director and chief executive officer Chris Fraser said: "Sirius continually seeks opportunities to use innovations and a commercial approach to accelerate development and unlock value. DMC has proven, world leading experience using Herrenknecht SBR technology on deep shafts and represents a strong partner, commercially aligned to our success."