London pre-open: Stocks seen muted as investors mull election, eye Fed

London stocks were set for a muted open on Wednesday as investors mulled the prospect of a general election before Christmas and looked ahead to a policy announcement by the Federal Reserve.

The FTSE 100 was called to open six points lower at 7,300.

CMC Markets analyst David Madden said: "Last night it was announced that a general election will be held on 12 December. The Conservative Party are polling well but Jeremy Corbyn’s Labour Party performed better than many expected in 2017, hence why some dealers are cautious.

"Politics has become so polarised in the UK in the last few years, there are concerns in some quarters that no clear majority could be returned to Westminster."

Away from Brexit, the focus will shift across the pond amid expectations of a rate cut from the Fed.

Ipek Ozkardeskaya, senior market analyst at London Capital Group, said the US central bank is widely expected to lower the interest rates for the third consecutive meeting.

"But a 25-basis-point cut is already reflected up to 95% in the asset prices. There is only a little upside potential left to be explored on the interest rate front.

"Hence, the accompanying statement is what matters the most to investors at today’s decision announcement. The sweet blend of better-than-expected third-quarter earnings and the progress in trade negotiations with China suggests an increased likelihood of a hawkish Fed statement."

In UK corporate news, Smurfit Kappa said its key metrics were in line with, or ahead of, its stated targets as it reported revenue growth of 3% to €6.85bn and an 11% increase in EBITDA to €1.26bn for the nine month period ended 30 September.

The paper-based packaging manufacturer said that, while it had faced "obvious macro-economic and political challenges", the company had been ideally positioned to take advantage of increased demand for sustainable packaging solutions.

AstraZeneca has agreed the sale and licence of the commercial rights to ‘Seroquel’ - quetiapine fumarate immediate release - and ‘Seroquel XR’ - quetiapine fumarate extended release - in Europe and Russia, to Cheplapharm Arzneimittel.

The pharmaceutical giant said Seroquel and Seroquel XR, used primarily to treat schizophrenia and bipolar disorder, had lost their compound patent protection in Europe and Russia. It said Cheplapharm will make an upfront payment of $178m to AstraZeneca and may also make future sales-contingent payments of up to $61m.

Severn Trent announced that Christine Hodgson has been appointed as the next chair of the company.

The FTSE 100 water utility said she would join the board as an independent non-executive director with effect from 1 January, and would succeed Andrew Duff in April. It said Hodgson would bring “extensive” board and governance experience, as well as a “deep understanding” of business, finance and technology leadership, as she currently serves as executive chair of Capgemini UK and senior independent director of Standard Chartered, and was previously an independent non-executive director of Ladbrokes Coral Group until 2017.